**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**Washington,      D.C. 20549 **

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**FORM      1O-QSB **

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

**For      the quarterly period ended September 30, 2007**

| o |   | **TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT**  |
|---|--------|------------------------------------------------------------------------------------------|

**For      the transition period from **
**                        **
**      to **
**                        **
** **

**Commission      file number: 000-17510 **

**MEGA      GROUP, INC. **

**(Exact      name of small business issuer as specified in its charter)**

| NEW                YORK                                                       |   | 14-1653446                                       |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) |   | (IRS                Employer Identification No.) |

**1730      Rhode Island Ave., N.W. Suite 415, Washington, DC 20036 **

**(Address      of principal executive offices) **

**(202)      296-9594 **

**(Issuer’s      telephone number) **

**N/A      **

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

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**Table      of Contents**

**Mega      Group, Inc. and Subsidiary**

**Index**

| **Part                I.**  | **Financial                Information**                                                                                                      |   |   |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                        |                                                                                                                                          |   |   |
| **Item                1.**  | Financial                Statements                                                                                                           |   |   |
|                        |                                                                                                                                          |   |   |
|                        | Consolidated                Balance Sheets- September 30, 2007 (Unaudited) and December 31,                2006                               |   | **1**  |
|                        |                                                                                                                                          |   |   |
|                        | Consolidated                Statements of Operations (Unaudited) Three Months ended September                30, 2007                and 2006 |   | **2**  |
|                        |                                                                                                                                          |   |   |
|                        | Consolidated                Statements of Operations (Unaudited) Nine Months ended September                30, 2007                and 2006  |   | **3**  |
|                        |                                                                                                                                          |   |   |
|                        | Consolidated                Statements of Cash Flows (Unaudited) Nine Months ended September                30, 2007                and 2006  |   | **4**  |
|                        |                                                                                                                                          |   |   |
|                        | Notes                to Unaudited Consolidated Financial Statements                                                                           |   | **5**  |
|                        |                                                                                                                                          |   |   |
| **Item                2.**  | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations                     |   | **8**  |
|                        |                                                                                                                                          |   |   |
| **Item                3.**  | Controls                and Procedures                                                                                                        |   | **9**  |
|                        |                                                                                                                                          |   |   |
| **Part                II.** | **Other                Information**                                                                                                          |   | **9**  |
|                        |                                                                                                                                          |   |   |
| **Signatures**              |                                                                                                                                          |   | **11** |

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**Mega        Group Inc. and Subsidiary**

**Consolidated        Balance Sheets**

**As        of September 30, 2007 and December 31, 2006**

|                                     |   | **September                30, 2007** |       |  **December                31, 2006** |   |
|------------------------------------------|--------|---------------------------------------|------------|--------------------------------------------|--------|
|                                          |   | **(Unaudited)**                       |       |                                  |   |
| **Assets**                               |   |                                  |       |                                       |   |
| Cash                and cash equivalents |   | $                                     | 3,753      |                                       | **$**  | 2,622 |   |
| Other                assets              |   |                                  | **3,399**  |                                       |   | 3,319 |   |
| Total                current assets      |   |                                  | **7,152**  |                                       |   | 6,021 |   |
| Loan                receivable           |   |                                  | **25,000** |                                       |   | 25,000 |   |
| **Total                assets**          |   | $                                     | 32,152     |                                       | **$**  | 31,021 |   |

| **Liabilities                and Stockholders’ Deficit**                                                                           |   |   |          |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------------|--------|
| **Liabilities**                                                                                                                          |   |   |          |    |   |
| Accounts                payable and accrued liabilities                                                                                  |   | $      | 2,191,088     |         | **$**  | 1,922,286 |   |
| Accrued                interest                                                                                                          |   |   | **733,780**   |         |   | 613,009 |   |
| Due                to shareholders and officers                                                                                          |   |   | **139,538**   |         |   | 139,538 |   |
| Notes                payable to shareholders and officers, including convertible notes                payable                of $146,602 |   |   | **348,520**   |         |   | 280,741 |   |
| Notes                payable, including convertible notes of $199,000                                                                    |   |   | **844,000**   |         |   | 844,000 |   |
| **Total                current liabilities**                                                                                             |   |   | **4,256,926** |         |   | 3,799,574 |   |

| **Stockholders’                Deficit**                                                                                                                                                                                     |   |   |           |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------------|--------|
| Preferred                stock, cumulative 8%, $1 par value per share, 400,000 shares authorized,                10,000 shares issued and outstanding with a liquidation preference                of $1                per share. |   |   | **10,000**     |         |   | 10,000 |   |
| Common                stock, $0.016 par value per share, 25,000,000 shares authorized,                9,516,959                shares issued and outstanding                                                                       |   |   | **155,907**    |         |   | 155,907 |   |
| Additional                paid-in capital                                                                                                                                                                                          |   |   | **391,780**    |         |   | 391,780 |   |
| Accumulated                deficit                                                                                                                                                                                                 |   |   | **(4,782,461** | **)**        |   | (4,326,240 | ) |
| Total                stockholders’ deficit                                                                                                                                                                                   |   |   | **(4,224,774** | **)**        |   | (3,768,553 | ) |
| **Total                liabilities and stockholders’ deficit**                                                                                                                                                               |   | **$**  | **32,152**     |         | **$**  | 31,021 |   |

**The      accompanying notes are an integral part of      these consolidated balance sheets.**

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**Mega      Group Inc. and Subsidiary**

**Consolidated      Statements of Operations**

**For      the Three Month Periods ended September 30, 2007 and 2006**

|                                                            |   | **2007**        |          | **2006**        |   |
|-----------------------------------------------------------------|--------|-----------------|---------------|-----------------|--------|
|                                                            |   | **(Unaudited)** |          | **(Unaudited)** |   |
| **Revenue**                                                     |   | $               | -             |            | $      | - |   |
| **Operating                expenses**                           |   |            |          |            |   |   |   |
| Compensation                and benefits                        |   |            | **86,250**    |            |   | 86,250 |   |
| Other                selling, general and administrative        |   |            | **9,790**     |            |   | 24,069 |   |
| Depreciation                                                    |   |            | **-**         |            |   | 547 |   |
| **Total                operating expenses**                     |   |            | **96,040**    |            |   | 110,866 |   |
| **Loss                from operations**                         |   |            | **(96,040**   | **)**           |   | (110,866 | ) |
| **Interest                expense**                             |   |            |          |            |   |   |   |
| Interest                expense - stockholders and officers     |   |            | **10,643**    |            |   | 9,888 |   |
| Other                interest expense                           |   |            | **30,093**    |            |   | 24,450 |   |
| **Total                interest expense**                       |   |            | **40,736**    |            |   | 34,338 |   |
| **Loss                before provision for income taxes**       |   |            | **(136,776**  | **)**           |   | (145,204 | ) |
| **Provision                for income taxes**                   |   |            | **-**         |            |   | - |   |
| Net                loss                                         |   | $               | (136,776      | )               | $      | (145,204 | ) |
| **Basic                and diluted net loss per common share:** |   |            |          |            |   |   |   |
| Basic                and diluted net loss per common share      |   | $               | (0.01         | )               | $      | (0.01 | ) |
| Basic                and diluted weighted average common shares |   |            | **9,744,233** |            |   | 9,744,233 |   |

**The        accompanying notes are an integral part of these consolidated balance        sheets.**

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**Mega          Group Inc. and Subsidiary**

**Consolidated          Statements of Operations**

**For          the Nine Month Periods ended September 30, 2007 and          2006**

|                                                            |   | **2007**        |          |  **2006**        |   |
|-----------------------------------------------------------------|--------|-----------------|---------------|-----------------------|--------|
|                                                            |   | **(Unaudited)** |          |  **(Unaudited)** |   |
| **Revenue**                                                     |   | **$**           | **3,042**     |                  | $      | 5,175 |   |
| **Operating                expenses**                           |   |            |          |                  |   |   |   |
| Compensation                and benefits                        |   |            | **258,750**   |                  |   | 258,750 |   |
| Other                selling, general and administrative        |   |            | **77,754**    |                  |   | 90,325 |   |
| Depreciation                                                    |   |            | **-**         |                  |   | 1,641 |   |
| **Total                operating expenses**                     |   |            | **336,104**   |                  |   | 350,716 |   |
| **Loss                from operations**                         |   |            | **(333,062**  | **)**                 |   | (345,541 | ) |
| **Interest                expense**                             |   |            |          |                  |   |   |   |
| Interest                expense - stockholders and officers     |   |            | **32,878**    |                  |   | 31,135 |   |
| Other                interest expense                           |   |            | **90,281**    |                  |   | 83,998 |   |
| **Total                interest expense**                       |   |            | **123,159**   |                  |   | 115,133 |   |
| **Loss                before provision for income taxes**       |   |            | **(456,221**  | **)**                 |   | (460,674 | ) |
| **Provision                for income taxes**                   |   |            | **-**         |                  |   | - |   |
| Net                loss                                         |   | **$**           | **(456,221**  | **)**                 | $      | (460,674 | ) |
| **Basic                and diluted net loss per common share:** |   |            |          |                  |   |   |   |
| Basic                and diluted net loss per common share      |   | **$**           | **(0.03**     | **)**                 | $      | (0.03 | ) |
| Basic                and diluted weighted average common shares |   |            | **9,744,233** |                  |   | 9,516,959 |   |

**The        accompanying notes are an integral part of these consolidated balance        sheets.**

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**Mega        Group Inc. and Subsidiary**

**Consolidated        Statements of Cash Flows**

**For        the Nine Month Periods ended September 30, 2007 and        2006**

|                                                                                                                       |   | **2007**        |   |   | **2006**        |
|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|-----------------|
|                                                                                                                       |   | **(Unaudited)** |   |   | **(Unaudited)** |
| **Cash                flow from operating activities**                                                                     |   |            |   |   |            |
| Net                Loss                                                                                                    | **$**  | **(456,221)**   |   | $      | (460,674)       |
| **Adjustment                to reconcile changes in net assets to net cash flow from operating                activities** |   |            |   |   |            |
| Depreciation                                                                                                               |   | **-**           |   |   | 1,641           |
| **Effect                of changes in non-cash working capital balances**                                                  |   |            |   |   |            |
| Other                assets                                                                                                |   | **(80)**        |   |   | -               |
| Accounts                payable and accrued liabilities                                                                    |   | **268,802**     |   |   | 249,251         |
| Accrued                interest                                                                                            |   | **120,771**     |   |   | 118,181         |
| Net                cash flow used in operating activities                                                                  |   | **(66,728)**    |   |   | (91,601)        |
| **Cash                flow from financing activities**                                                                     |   |            |   |   |            |
| Debt                proceeds                                                                                               |   | **90,000**      |   |   | 9,720           |
| Payments                on debt to stockholders and officers                                                               |   | **(22,141)**    |   |   | (47,500)        |
| **Net                cash flow provided by financing activities**                                                          |   | **67,859**      |   |   | (37,780)        |
| Change                in cash and cash equivalents                                                                         |   | **1,131**       |   |   | (129,381)       |
| **Cash                and cash equivalents, beginning of period**                                                          |   | **2,622**       |   |   | 136,634         |
| **Cash                and cash equivalents, end period**                                                                   | **$**  | **3,753**       |   | $      | 7,253           |
| **Cash                Paid for Interest**                                                                                  | **$**  | **-**           |   | $      | -               |
| **Cash                Paid for Taxes**                                                                                     | **$**  | **-**           |   | $      | -               |
|                                                                                                                       |   |            |   |   |            |
| **Non                cash transactions**                                                                                   |   |            |   |   |            |
| **Common                stock issued for repayment of debt**                                                               | **$**  | **75,000**      |   | **$**  | 75,000          |

**The        accompanying notes are an integral part of these consolidated balance        sheets.**

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**Mega        Group Inc. and Subsidiary**

**Notes        to Unaudited Consolidated Financial Statements**

**For        the Three and Nine Months Ended September 30, 2007**

| **1.** **Nature                of Business**             |   | The                consolidated financial statements include the accounts of the Mega                Group,                Inc., a New York corporation and its wholly owned subsidiary, Small                Business Investment Corporation of America, Inc. (SBICOA), an Oregon                corporation (collectively, the Company). All significant inter-company                transactions and accounts have been eliminated in the consolidated                financial statements. The Company’s current business plan is to provide                diversified financial services to ethnic communities and faith-based                entities in the United States and to operate as a specialized financial                institution providing loans and investments for businesses in low                and                moderate income communities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **2.** **Interim                Financial Presentation** |   | The                accompanying unaudited consolidated financial statements of the Company                have been prepared in accordance with accounting principles generally                accepted in the United States of America for interim financial information                and with the instructions to Form 10-QSB. Accordingly, they do not                include                all the information required for complete financial statements. In                the                opinion of management, all adjustments and reclassifications considered                necessary for a fair presentation have been included. All such adjustments                are of a normal recurring nature. Operating results for the three                and nine                month periods ended September 30, 2007 are not necessarily indicative                of                the results that may be expected for the year ending December 31,                2007 or                any other period. The enclosed unaudited consolidated financial statements                should be read in conjunction with the consolidated financial statements                and footnotes thereto incorporated by reference in the Company’s Annual                Report on Form 10-KSB for the year ended December 31, 2006. |
|                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **Net                Loss per Common Share**        |   | Basic                net loss per common share is calculated by dividing the net loss                attributable to common stockholders by the weighted average number                of                common shares outstanding during the year. Diluted earnings per share                is                calculated using the weighted average number of common shares plus                dilutive common stocks equivalents outstanding during the period.                Anti-dilutive common stock equivalents which consists exclusively                of stock                options are excluded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **Stock                Option Accounting**                    |   | The                Company adopted the fair-value recognition provision of SFAS No.                123 (as                revised in 2004 and referred to as “SFAS No. 123R”) Accounting for                Stock-based Compensation. SFAS 123R generally eliminates variable                accounting and requires companies to recognize in the income statement                over the vesting period of the options an estimate of expense based                on the                fair value of those options, typically as of the date of                grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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**Mega      Group Inc. and Subsidiary**

**Notes      to Unaudited Consolidated Financial Statements**

**For      the Three and Nine Months Ended September 30, 2007**

| **3.** **Financial                Condition** |   | As                of September 30, 2007, the Company has a deficiency in stockholders’                equity and a working capital deficit of approximately $4,225,000.                The                Company has not been successful to date in executing its business                plan and                there are no guarantees that it will be successful in implementing                it in                the future. The Company has not generated significant revenue from                its                business plan and has primarily relied upon contributions and loans                from                shareholders to fund operations. The Company will require significant                new                capital funding to implement the business plan and to satisfy the                Company’s cash requirements for the next twelve months. There are no                guarantees the Company’s shareholders will continue to fund operations or                that there is a viable market for the Company to raise the required                capital. The Company is in default on the majority of its debt and                is                significantly delinquent on amounts owed to vendors and employees.                The                Company will require capital funding in order to fund the capital                deficit.                Although no income tax liability exists, the Company is delinquent                in all                required income tax filings for the years ending December 31, 2003,                2004,                2005, and 2006. The                intent of the Company’s management is to direct it into new business lines                providing financial services to currently underserved ethnic minorities                through alliances with churches and other organizations serving those                groups. The Company intends in the near term to obtain additional                equity                funding and to obtain additional debt financing to pursue these new                lines                of business and to provide the funds to satisfy its current obligations.                The extent to which the Company can raise additional equity and financing                and achieve profitable operations from new business activities will                determine if the Company can continue as a going concern. Management                believes it will be successful in obtaining additional equity and                debt                financing, but no assurances can be given in this                regard. |
|----------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.** **Related                Party Transactions** |   | The                Company owes certain of our stockholders $488,058 and $420,279 as                of                September 30, 2007 and December 31, 2006, respectively of which $348,520                and $280,741 are notes payable and $139,538 was for expenses paid                by the                stockholder on the Company’s behalf. The Company is in default on all                notes payable. The $139,538 has no specified terms for interest or                repayment. |
|-----------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Mega        Group Inc. and Subsidiary**

**Notes        to Unaudited Consolidated Financial Statements**

**For        the Three and Nine Months Ended September 30, 2007**

| **5****.                New Accounting Pronouncements** |   | In                June 2006, the Financial Accounting Standards Board, (“FASB”) issued FASB                Interpretation No. 48,”Accounting for Uncertainty in Income Taxes” (“FIN                48”). FIN 48 is an interpretation of FASB Statement No. 109, “Accounting                for Income Taxes,” and seeks to reduce the diversity in practice                associated with certain aspects of measurement and recognition in                accounting for income taxes. In addition, FIN 48 provides guidance                on                de-recognition, classification, interest and penalties, and accounting                in                interim periods and requires expanded disclosure with respect to                the                uncertainty in income taxes. The Company adopted the provision of                FIN 48                on January 1, 2007. There was no cumulative effect as a result of                applying                FIN 48. No adjustment was made to the opening balance of retained                earnings. In                September 2006, FASB issued Statements of Financial Accounting Standards                (“SFAS”) 157, “Fair Value Measurements.” SFAS 157 defines fair value,                establishes a framework for measuring fair value in generally accepted                accounting principles, and expands disclosures about fair value                measurements. SFAS 157 applies to existing accounting pronouncements                that                require or permit fair value measurements in which FASB had previously                concluded fair value is the most relevant measurement attribute.                Accordingly, SFAS 157 does not require any new fair value measurements.                SFAS 157 is effective for financial statements issued for fiscal                years                beginning after November 15, 2007, with early adoption encouraged.                The                Company does not believe that the adoption of this interpretation                will                have a significant impact on its financial condition and results                of                operations. |
|---------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                    |   | In                February 2007, FASB issued SFAS No. 159, “The Fair Value Option for                Financial Assets and Financial Liabilities-Including an amendment                of FASB                Statement No. 115.” SFAS 159 permits entities to choose to measure                eligible items at fair value at specified election dates. Unrealized                gains                and losses on items for which the fair value option has been elected                are                reported in earnings at each subsequent reporting date. The fair                value                option (i) may be applied instrument by instrument, with certain                exceptions, (ii) is irrevocable (unless a new election date occurs)                and                (iii) is applied only to entire instruments and not to portions of                instruments. SFAS 159 is effective for the Company on January 1,                2008 and                is not expected to have a significant impact on the Company’s financial                statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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

**General-      Nine Months Ended September 30, 2007 and 2006**

**Financial      Condition**

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**ITEM      3. CONTROLS AND PROCEDURES**

**PART      II. OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

**ITEM      2. CHANGES IN SECURITIES**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES**

| Unsecured                note payables to stockholders and officers bearing interest at rates                between 5% and 15% all of which are in default.                                                                                           |   | **$**  | **178,804**   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Unsecured                note payable to a stockholder and officer convertible into common                shares                at $0.33 per share, bearing interest at 15%, due December 2003. The                Company is in default on this note. |   |   | **56,602**    |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Total                amount payable to officers                                                                                                                                                                                                        |   |   | **235,406**   |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Note                payable, unsecured, bearing interest at 10%, due March 2007. The                Company                is in default on this note.                                                                                                 |   |   | **4,000**     |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Note                payable to stockholder for redemption of common stock, unsecured                bearing                interest at 6%, due June 2000. The Company is in default on this                note.                                       |   |   | **24,114**    |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Total                amount payable to stockholders and officers                                                                                                                                                                                       |   |   | **263,520**   |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Note                payable to an individual, unsecured bearing interest at 12%. The                Company                is in default on this note.                                                                                                 |   |   | **100,000**   |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Various                unsecured notes payable convertible into common stock at $0.33 per                share,                bearing interest at 10%, due January 2006. The Company is in default                on                these notes.      |   |   | **90,000**    |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Various                unsecured notes payable convertible into common stock at $0.33 per                share,                bearing interest at 10%, due in 2007. The Company is in default on                these                notes.           |   |   | **169,000**   |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| Working                capital notes payable to Matah Holdings, LLC bearing interest at                12% due                April 2003. The Company is in default on these notes.                                                                    |   |   | **485,000**   |   |
|                                                                                                                                                                                                                                                   |   |   |          |   |
| **Total**                                                                                                                                                                                                                                              |   | **$**  | **1,107,520** |   |

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

**ITEM      5. OTHER INFORMATION**

**ITEM      6. EXHIBITS**

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**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.**

| Date:                November 1, 2007 |                                       | MEGA                GROUP, INC.                  |
|---------------------------------------|--------------------------------------------|--------------------------------------------------|
|                             |                                  |                                        |
|                                       | By:                              | /s/ JOHN              H.              BROWN |
|                                  | **John              H. Brown**             |
|                                  | **Chief                Executive Officer** |

|                                       |                                                          |                              |
|--------------------------------------------|---------------------------------------------------------------|-----------------------------------|
| Date: November                1, 2007 | By:                                                 | /s/ JOYCE              BROWN |
|                                       | **Joyce              Brown**                                  |
|                                       | **Chief                  Financial                  Officer** |

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