UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 20 - F

(MARK  ONE)

[  ]     REGISTRATION  STATEMENT  PURSUANT  TO  SECTION  12(B)  OR  12(G) OF THE
SECURITIES  EXCHANGE  ACT  OF  1934
[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT  OF  1934
For  the  fiscal  year  ended  December  31,  2001
[  ]     TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE  ACT  OF  1934
For  the  transition  period  from  __________  or  __________


Commission  file  number:  0-32359

                               MERIDIAN CO., LTD.
             (Exact name of registrant as specified in its charter)

                              The Republic of Korea
                 (Jurisdiction of incorporation or organization)

         9FL., Seoil Bldg. 222, Jamsilbon-dong, songpa-Gu, Seoul, Korea
                     (Address of principal executive offices)

Securities  registered or to be registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>

                              NAME OF EACH EXCHANGE

TITLE OF EACH CLASS  ON WHICH REGISTERED
-------------------  -------------------
<S>                  <C>



</TABLE>


SECURITIES  REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:


SECURITIES  REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

Common  shares

                                (Title of Class)


                                (Title of Class)

                                        1
<PAGE>
Securities  for  which there is a reporting obligation pursuant to Section 15(d)
of  the  Act:



                                (Title of Class)


Indicate  the  number  of  outstanding shares of each of the issuer's classes of
capital  or  common  stock  as  of the close of the period covered by the annual
report.


Common  shares  outstanding  December  31,  2001:  15,899,875

_
_________
Indicate  by  check  mark  whether  the  registrant:  (1)  has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.
Yes  [X]    No  [_]
    ----
Indicate  by  check  mark  which  financial  statement  item  the registrant has
selected  to  follow.
Item  17  [  ]     Item  18  [X]

REFERENCES

All  references  to  "Korea" herein are references to The Republic of Korea. All
references  to "Meridian," "we," "us" or "our" herein are references to Meridian
Co., Ltd. All references to the "Government" are references to the government of
Korea.  All  references  to  the "shares" are references to the common shares of
15,899,875,  par  value  of  Won  200  (US$0.15  at  December  31,  2001).

CURRENCY  TRANSLATION

In  this  annual report, references to "Won" or "W" are to the currency of Korea
and  all references to "Dollars," "$" or "US$" are to the currency of the United
States of America. Our financial statements are prepared in Won, translated into
U.S.  dollars  and  presented in accordance with accounting principles generally
accepted in the United States for the fiscal years ended December 31, 1999, 2000
and  2001.  Solely  for  the  convenience  of the reader and to improve clarity,
certain Items in this annual report contains translations of certain Won amounts
into  Dollars  at  specified  rates  (see  also note 2c to the Company's audited
financial statements, included in Item 18, for the Company's accounting policies
with  regard  to  foreign  exchange  conversion).  All  translations from Won to
Dollars  were  made  (unless otherwise indicated) at the noon buying rate in The
City of New York for cable transfers in Won per US$1.00 as certified for customs
purposes by the Federal Reserve Bank of New York in effect on December 31, 2001,
which was Won 1,313.50 to US$1.00. No representation is made that the Won or US$
amounts  referred to in this annual report could have been or could be converted
into  US$ or Won, as the case may be, at any particular rate or at all. See also
Item  3,  Key Information, Exchange Rates Information, for information regarding
the rates of exchange between the Won and the Dollar.  On July 12, 2002 the noon
buying  rate  was  Won  1,177.0  to  US$1.00.

                                        2
<PAGE>
                                     PART I


ITEM  1.  IDENTITY  OF  DIRECTORS,  SENIORMANAGEMENT  AND  ADVISERS
-------------------------------------------------------------------

A.     DIRECTORS  AND  SENIOR  MANAGEMENT

See  Item  4.C.

B.     ADVISERS

Principal  bankers:     Chohung  Bank
                        72-3, Hongchun-Eup, Hongchun-Kun, Kangwon-Do, Korea
Legal  advisors:        J. Bennett  Grocock
                        455  S. Orange Avenue Suite 500, Orlando, Florida, USA

C.     AUDITORS

SamDuk  Accounting  Corporation

12/F  SeoHeung  Bldg.
68  Keonji-Dong,  Jongro-Ku
Seoul,  Korea


ITEM  2.  OFFER  STATISTICS  AND  EXPECTED  TIMETABLE
-----------------------------------------------------

Not  Applicable

ITEM  3.  KEY  INFORMATION
--------------------------

A.     SELECTED  FINANCIAL  DATA

The  selected  consolidated  financial  and other data set forth below should be
read  in conjunction with the consolidated financial statements of Meridian Co.,
Ltd.  as  of  December  31,  2001  and  2000  and  for  each of the years in the
three-year  period  ended  December  31,  2001, including the notes thereto, and
"Item  5Operating  and  Financial  Review and Prospects" included in this annual
report.  The selected consolidated financial data set forth below for the fiscal
years  ended  December  31,  2001,2000  and  1999  are  derived from the audited
consolidated financial statements of Meridian, which have been audited by SamDuk
Accounting Corporation, independent accountants. The report of SamDuk Accounting
Corp.  covering  the December 31, 2001 financial statements contains an emphasis
paragraph related to the adverse economic conditions in the Republic of Korea in
recent  years  and  in  the  Asia  Pacific  region  in  general. Especially, the
auditors' report also describes the uncertainty about our ability to continue as
a  going  concern,  based  on  negative  cash flows from operations, accumulated
deficit  and  negative  net  assets.  Our  consolidated financial statements are
expressed  in  US dollars and presented in accordance with accounting principles
generally  accepted  in  the  United  States.

                                        3
<PAGE>

<TABLE>
<CAPTION>

                                         MERIDIAN CO., LTD.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS  (in U.S. dollars)
                        For the years ended December 31, 2001, 2000 and 1999



                                                               2001          2000          1999
<S>                                                        <C>           <C>           <C>
Sales . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 5,289,561   $ 5,304,040   $ 5,367,091
Cost of sales . . . . . . . . . . . . . . . . . . . . . .    2,478,106     2,978,975     3,988,964
Gross profit. . . . . . . . . . . . . . . . . . . . . . .    2,811,455     2,325,065     1,378,127
                                                           ------------  ------------  ------------

Operating expenses. . . . . . . . . . . . . . . . . . . .    3,996,150     3,338,976     2,396,014

 Operating loss . . . . . . . . . . . . . . . . . . . . .   (1,184,695)   (1,013,911)   (1,017,887)
 Other income . . . . . . . . . . . . . . . . . . . . . .      188,925       400,473     1,216,384
 Other expenses . . . . . . . . . . . . . . . . .. . . .      (929,442)     (445,877)     (441,223)
 Minority interest in net loss of consolidated affiliates       19,302       367,789        14,074
 Income tax expense . . . . . . . . . . . . . . . . . . .            -       (11,551)     (130,037)
 Extraordinary items. . . . . . . . . . . . . . . . . . .      (10,212)        6,391       (13,918)
 Other comprehensive gain (loss). . . . . . . . . . . . .      (43,252)     (158,508)       81,290

 Comprehensive loss . . . . . . . . . . . . . . . . . . .  $(1,959,374)  $  (855,194)  $  (291,317)

 Weighted average number of common shares . . . . . . . .   15,703,850    14,071,325      8,371,325

 Basic and diluted loss per common share. . . . . . . .    $     (0.12)  $     (0.05)  $     (0.04)
</TABLE>
                                        4
<PAGE>

<TABLE>
<CAPTION>

                  CONSOLIDATED BALANCE SHEETS (in U.S. dollars)
                     As of December 31, 2001, 2000 and 1999


                                               2001         2000        1999
<S>                                         <C>          <C>         <C>
Cash and cash equivalents. . . . . . . . .  $  105,216   $  398,625  $1,428,090
Accounts receivable.- trade. . . . . . . .   1,759,821    2,708,607   1,895,453
Inventories. . . . . . . . . . . . . . . .   1,187,989    1,093,137     509,633
Other. . . . . . . . . . . . . . . . . . .   1,074,919      587,827     119,658

  Total current assets . . . . . . . . . .   4,127,945    4,788,196   3,952,834
Investments and other assets . . . . . . .     433,653      693,331     872,284
Property, plant and equipment - net. . . .   1,455,295    1,528,395   1,237,090
Goodwill and other intangible assets - net         932       75,273      77,792

  TOTAL ASSETS . . . . . . . . . . . . . .  $6,017,825   $7,085,195  $6,140,000


Trade accounts payable and current debt. .  $3,653,326   $3,779,553  $1,850,493
Long-term borrowings . . . . . . . . . . .   2,568,413    1,486,641   2,275,676
                                            ----------    ---------   ---------
  Total liabilities. . . . . . . . . . . .   6,221,739    5,266,194   4,126,169

Minority interest. . . . . . . . . . . . .       6,593       26,691      35,669
Shareholders' equity . . . . . . . . . . .    (210,507)   1,792,310   1,978,162
                                            ----------    ---------   ---------
  TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY. . . . . . . . . .  $6,017,825   $7,085,195  $6,140,000
</TABLE>
                                        5
<PAGE>


EXCHANGE  RATE  INFORMATION

The  following  table  sets  forth, for the periods and dates indicated, certain
information  concerning  the  noon  buying  rate  of  US  dollar  in  Won.  No
representation  is  made that the Won or Dollar amounts referred to herein could
have  been or could be converted into Dollars or Won, as the case may be, at any
particular  rate,  or  at  all.
<TABLE>
<CAPTION>

YEAR  AT DECEMBER 31  ANNUAL AVERAGE RATE PER $1.00 US*  ANNUAL HIGH  ANNUAL LOW
                                                         ===========
<S>   <C>             <C>                                <C>          <C>

1997          1695.0                              988.1         1960       845.5
----  --------------  ---------------------------------  -----------  ----------
1998          1206.0                             1367.3         1812      1196.0
----  --------------  ---------------------------------  -----------  ----------
1999          1136.0                             1188.2         1243      1124.5
----  --------------  ---------------------------------  -----------  ----------
2000          1267.0                             1140.0         1267      1105.5
----  --------------  ---------------------------------  -----------  ----------
2001          1313.5                             1293.4         1369      1234.0
----  --------------  ---------------------------------  -----------  ----------
</TABLE>

*  The  average  of  the  noon buying rates on the last date of each month (or a
portion  thereof)  during  the  period.
                                        6
<PAGE>

B.     CAPITALIZATION  AND  INDEBTEDNESS

See  above

C.     REASONS  FOR  THE  OFFER  AND  USE  OF  PROCEEDS

Not  applicable

D.     RISK  FACTORS

The  following risks relate specifically to the Company's business and should be
considered  carefully.  The  Company's business, financial condition and results
of operations could be materially and adversely affected by any of the following
risks. In particular, the Company is a Korean Company and is governed by a legal
and  regulatory  environment  which  in some respects may differ from that which
prevails  in  other  countries.

LIMITED  OPERATING  HISTORY
The  Company's  limited  operating history makes the evaluation of the Company's
current  business and the forecasting of the Company's future results difficult.
The  Company has only a limited operating history on which to base an evaluation
of  the  Company's  current  business  and  prospects,  each  of which should be
considered  in  light of the risks, expenses and problems frequently encountered
in  the  early  stages  of  development of all companies. This limited operating
history  leads  the  Company to believe that period-to-period comparisons of its
operating  results may not be meaningful and that the results for any particular
period  should not be relied upon as an indication of future performance.  There
is  no  assurance  that  the  Company's  products will achieve acceptance in the
marketplace  on  commercially  acceptable  terms.  If  revenues  do  not grow at
anticipated  rates,  the Company's business, results of operations and financial
condition  would  be  materially  and  adversely  affected.

THE  COMPANY'S  ADDITIONAL  FUNDING  REQUIREMENTS
The  Company  has  limited  financial  resources.  The  Company  will  require
additional  cash  to  implement  its business strategies, including cash for (i)
payment of increased operating expenses, (ii) costs associated with bringing new
products  to  market,  iii)  continued research and development and (iv) further
implementation  of  those  business  strategies. The Company anticipates raising
such additional capital through public or private financings, as well as through
loans and other resources.  There is no assurance that the necessary funds would
be  available  to  the Company on terms acceptable to it. Failure to obtain such
additional  funding  could result in delay or indefinite postponement of some or
all  of  the  Company's  products  to  the market place or the ability to supply
sufficient  product  to  the  market  place on a continual and profitable basis.
Additional  funds  raised  by  the  Company  through  the  issuance of equity or
convertible  debt  securities  will  cause the Company's current stockholders to
experience dilution. Such securities may grant rights, preferences or privileges
senior  to  those  of  the  Company's  common  stockholders.
The  Company does not have any contractual restrictions on the Company's ability
to  incur  debt and, accordingly, the Company could incur significant amounts of
indebtedness  to  finance  its  operations.  Any such indebtedness could contain
covenants  which  would  restrict  the  Company's  operations.
                                        7
<PAGE>

THE  COMPANY  ANTICIPATES  THAT  LOSSES  MAY  CONTINUE
For  the  year ended December 31, 2001 the Company had a net loss of  $1,916,122
and  an  accumulated  deficit  of  $3,869,737. The Company anticipates incurring
losses  for the foreseeable future.  The extent of future losses will depend, in
part,  on  the  amount  of  growth in revenues from the Company's products.  The
Company  expects  that  operating  costs  will  increase during the next several
years,  especially  in the areas of sales and marketing, product development and
general  and  administrative expenses as it pursues its business strategy. Thus,
the  Company  will  need  to generate increased revenues faster than the rate of
growth  in  costs to achieve profitability.  To the extent that increases in its
operating  expenses  precede  or  are not subsequently followed by corresponding
increases  in  revenues,  or  if it is unable to adjust operating expense levels
accordingly,  the  Company's  business,  results  of  operations  and  financial
condition  would be materially and adversely affected. There can be no assurance
that  the  Company  will sustain profitability or that its operating losses will
not  increase  in  the  future.

COMPETITION  FROM  LARGER  COMPANIES
The  industries  in which the Company competes are intensely competitive and the
Company  competes  and  will compete with companies having greater financial and
technical  resources.  Therefore,  to  the  extent  that  the Company is able to
establish  sales,  revenues  and profits, there is no assurance that it would be
able  to  sustain  such  sales,  revenues and profits.  Moreover, although not a
major  factor  today,  if  and when the Company begins achieving its objectives,
larger,  better  financed companies in peripheral businesses may be attracted to
the  Company's  markets.  They  may  be  prepared to spend large sums quickly to
develop  competitive  products  and  to  mount  major  marketing campaigns.  The
Company  is  aware  of  this  possibility  and  hopes  to establish itself as an
industry  leader  early  on.  Time is of the essence and the Company's financing
and  marketing  programs  are  essential  to  minimize  this  risk.

NEED  TO  UPGRADE  PRODUCTS  AND  DEVELOP  NEW  TECHNOLOGIES
Continued  participation by the Company in its market may require the investment
of  the  Company's resources in upgrading of its products and technology for the
Company to compete and to meet regulatory and statutory standards.  There can be
no  assurance  that  such resources will be available to the Company or that the
pace  of  product  and  technology development established by management will be
appropriate  to  the  competitive requirements of the marketplace. The Company's
success  will  depend  to  a  substantial  degree  on its ability to develop and
introduce  in  a  timely manner new products and enhancements that meet changing
customer  requirements and emerging industry standards.  The development of new,
technologically  advanced  products  and enhancements is a complex and uncertain
process  requiring  high  levels  of  innovation  as well as the anticipation of
technology  and  market  trends.

THE  COMPANY  CURRENTLY  DEPENDS  ON  A  LIMITED  NUMBER OF FOREIGN SUPPLIERS TO
MANUFACTURE  CERTAIN  KEY  COMPONENTS AND THESE MANUFACTURERS MAY NOT BE ABLE TO
SATISFY  ITS  REQUIREMENTS  AND  COULD CAUSE THE COMPANY'S POTENTIAL REVENUES TO
DECLINE
The  Company  currently  buys  certain  key  components from a limited number of
suppliers.  The  Company anticipates that these suppliers will manufacture these
key  components  in  sufficient  amounts to meet its production requirements. If
these suppliers fail to satisfy the Company's requirements on a timely basis and
at competitive prices, the Company could suffer manufacturing delays, a possible
loss  of  revenues  or  higher  than anticipated costs of revenues, any of which
could  seriously  harm its operating results. There can be no assurance that the
Company will be able to identify, develop, manufacture, market, sell, or support
new  products  and  enhancements successfully, that new products or enhancements
will  achieve  market  acceptance,  or  that the Company will be able to respond
effectively  to  technology  changes,  emerging  industry  standards  or product
announcements  by  competitors.  New  product announcements by the Company could
cause  its  customers  to  defer  purchases  of  existing  products  or  cause
distributors  to  request  price  protection  credits  or  stock  rotations. Any
significant  deterioration  in  the  general  economic  conditions would have an
adverse  effect  on  the  Company's business, result of operations, or financial
condition
                                        8
<PAGE>

The  success  of the Company's operations depends to a significant extent upon a
number  of  factors  relating  to  discretionary  consumer  spending,  including
economic  conditions (and perceptions of such conditions by consumers) affecting
disposable  consumer  income  such  as  employment,  wages,  salaries,  business
conditions,  interest rates, availability of credit and taxation for the economy
as  a whole and in regional and local markets where the Company operates.  There
can  be  no  assurance  that consumer spending will not be adversely affected by
general economic conditions, which could negatively impact the Company's results
of operations and financial conditions. Any significant deterioration in general
economic conditions or increases in interest rates may inhibit consumers' use of
credit  and  cause  a  material  adverse  effect  on  the Company's revenues and
profitability.  Any  significant  deterioration  in  general economic conditions
that adversely affects these companies could also have a material adverse effect
on  the  Company's  business,  results  of  operations  and financial condition.

NO  DIVIDENDS  DECLARED  OR  ANY  LIKELY  TO  BE  DECLARED  IN  THE  FUTURE
The  Company  has not declared any dividends since inception, and has no present
intention  of  paying  any cash dividends on its common stock in the foreseeable
future.  The  payment  by the Company of dividends, if any, in the future, rests
in  the  discretion  of  the Company's Board of Directors and will depend, among
other  things,  upon  the  Company's  earnings,  its  capital  requirements  and
financial  condition,  as  well  as  other  relevant  factors.

THE  POSSIBLE  ISSUANCE OF ADDITIONAL SHARES MAY IMPACT THE VALUE OF THE COMPANY
STOCK
The  Company  is authorized to issue up to 50,000,000 shares of common stock. It
is  the  Company's intention to issue more shares.  Sales of substantial amounts
of  common  stock (including shares issuable upon the exercise of stock options,
the  conversion  of  notes and the exercise of warrants), or the perception that
such  sales  could  occur,  could  materially adversely affect prevailing market
prices  for  the  common  stock  and  the ability of the Company to raise equity
capital  in  the  future.

PREEMPTIVE  RIGHTS
The  Company  is authorized to issue shares at such times and upon such terms as
the  board  of  directors  of  the Company may determine. The new shares must be
offered on uniform terms to all shareholders who have pre-emptive rights and who
are  listed  on  the shareholders' register as of the record date. The Company's
shareholders are entitled to subscribe for any newly issued shares in proportion
to  their  existing  shareholdings,  provided  that  pursuant  to  the Company's
Articles  of Incorporation, new shares that are (i) issued by public offering in
accordance  with  the  Securities and Exchange Law of Korea, (ii) represented by
depositary  receipts,  (iii) issued to foreigners in accordance with the Foreign
Investment  Promotion  Law  of  Korea  within  33% of the total number of shares
outstanding,  (iv)  issued to the Company's employee stock ownership association
up  to  20% of the newly issued shares (to the extent the total number of shares
so  subscribed  and  held  by  the  members  of  the  employee  stock  ownership
association  does  not  exceed  20%  of  the total number of shares), (v) issued
outside  Korea  for  listing  on  a foreign stock exchange or foreign securities
market  trading securities by means of an electronic or a quotation system, (vi)
issued  according to a stock option plan, (vii) issued to a domestic corporation
having  a  strategic  relationship  with  the  Company  in  connection  with the
Company's management or technology of up to 5% of the total number of issued and
outstanding  shares  after such issuance, (viii) issued as consideration for the
acquisition of the stock or assets of another company up to less than 20% of the
total  number  of issued and outstanding shares, or (ix) issued through general
public  offering in accordance with the Securities and Exchange Law of Korea may
be  issued  pursuant  to a resolution of the board of directors to persons other
than  existing  shareholders.  The  limited  circumstances where the Company may
issue  shares to persons who are not shareholders of the Company could cause the
Company  difficulty  in  carrying  out  its  corporate  functions.
                                        9
<PAGE>

SALES  AND  DISTRIBUTION
The  Company has yet to establish a significant distribution and support network
in  certain  markets.  Failure  on  the part of the Company to put into place an
experienced  and effective marketing infrastructure in a timely manner could act
to  delay  or  negate  the  realization  of  anticipated  revenues.

MARKET  ACCEPTANCE
The  viability  of  the  Company  is dependent upon the market acceptance of its
current  and  future  products.  There  is no assurance that these will attain a
level  of  market  acceptance that will allow for continuation and growth of its
business  operations.  In  addition,  the  Company  will  need  to  develop  new
processes  and  products  to  maintain  its  operations in the longer term.  The
development and launching of such processes and products can involve significant
expenditure.  There  can  be  no assurance that the Company will have sufficient
financial  resources  to fund such programs and whether such undertaking will be
commercially  successful.

ADEQUATE  LABOR  AND  DEPENDENCE  UPON  KEY  PERSONNEL; NO EMPLOYMENT AGREEMENTS
The  Company  will depend upon recruiting and maintaining qualified personnel to
staff  its  operations.  The  Company believes that such personnel are currently
available at reasonable salaries and wages.  There can be no assurance, however,
that  such  personnel  will  always  be available in the future.  The continuing
development  of the Company's products has been almost entirely dependent on the
skills  of  management  and  certain key employees of the Company with which the
Company  has  no  employment  agreements.  Loss  of  the services of any of this
management  team and key employees could have a material adverse effect upon the
Company.

THE  COMPANY'S FINANCING REQUIREMENTS MAY INCREASE IN ORDER TO OBTAIN ADDITIONAL
MANUFACTURING  CAPACITY  IN  THE  FUTURE
To obtain additional manufacturing capacity, the Company may be required to make
deposits,  equipment  purchases,  loans,  joint  ventures, equity investments or
technology licenses in or with other companies. These transactions could involve
a  commitment  of  substantial  amounts  of the Company's capital and technology
licenses in return for production capacity.  The Company may be required to seek
additional  debt or equity financing if the Company needs substantial capital in
order  to secure this capacity and the Company cannot be assured that it will be
able  to  obtain  such  financing.  If  the  Company's suppliers discontinue the
products  needed  to  meet  the  Company's  demands,  or  fail  to  upgrade  the
technologies  needed to manufacture the Company's products, the Company may face
production  delays  and lower the Company's anticipated revenues.  The Company's
products  requirements  may represent a small portion of the total production of
the  suppliers  that  manufacture  the  Company's  components.  As a result, the
Company  is subject to the risk that a supplier may cease production on an older
or  lower-volume  manufacturing  process  that  it uses to produce the Company's
parts.  Each  of  these  events  could increase the Company's costs and harm the
Company's  ability  to  deliver  its  products  on  time.
                                       10
<PAGE>

THE  COMPANY'S  GROWTH  DEPENDS  ON  ITS  ABILITY  TO  COMMERCIALIZE  PRODUCTS
Currently  a significant amount of the Company's revenue comes from the Meridian
product  line  that  is  central to the Company's growth strategy.  This line of
products  encounters  competition  and is price sensitive.  While the Company is
currently  developing  new  products,  the  Company cannot be assured that these
products  will  reach  the  market on time, will satisfactorily address customer
needs,  will  be  sold  in  high  volume, or will be sold at profitable margins.

THE  COMPANY'S  OPERATING  EXPENSES  ARE  ANTICIPATED TO BE RELATIVELY FIXED AND
THEREFORE  THE  COMPANY  MAY  HAVE LIMITED ABILITY TO REDUCE EXPENSES QUICKLY IN
RESPONSE  TO  ANY  REVENUE  SHORTFALL
The  Company  anticipates  that its operating expenses will be relatively fixed,
and  the  Company  therefore  has  limited ability to reduce expenses quickly in
response  to  any  revenue  shortfalls.  Consequently,  the  Company's operating
results  will  be  harmed  if  the  Company's  revenues  do not meet its revenue
projections.  The  Company  may  experience revenue shortfalls for the following
reasons:
-     significant  pricing pressures that occur due to competition, over supply,
or  other  reasons;
-     sudden  shortages  of  raw  materials  or  fabrication,  test  or assembly
capacity  constraints  that  lead  the Company's suppliers to allocate available
supplies  or  capacity  to  other  customers  which, in turn, harm the Company's
ability  to  meet  its  sales  obligations;  and
-     the  reduction,  rescheduling  or  cancellation  of  customer  orders.

THE  COMPANY'S MARKETS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND, THEREFORE,
ITS  SUCCESS  DEPENDS  UPON  THE  COMPANY'S ABILITY TO DEVELOP AND INTRODUCE NEW
PRODUCTS
The  markets  for  the  Company's  products  are  characterized  by:
-     rapidly  changing  technologies;
-     evolving  and  competing  industry  standards;
-     changing  customer  needs;  and
-     frequent  new  product  introductions  and  enhancements.

To  develop  new products for its target markets, the Company must develop, gain
access to and use leading technologies in a cost-effective and timely manner and
continue to expand its technical and design expertise.  In addition, the Company
must have its products designed into its customers' future products and maintain
close  working relationships with key customers in order to develop new products
that  meet  their changing needs.  The Company cannot be assured that it will be
able  to  identify  new product opportunities successfully, develop and bring to
market  new  products,  achieve  design  wins  or  respond  effectively  to  new
technological changes or product announcements by its competitors.  In addition,
the  Company may not be successful in developing or using new technologies or in
developing  new products or product enhancements that achieve market acceptance.
The pursuit of necessary technological advances may require substantial time and
expense.  Failure  in  any  of  these areas could harm the Company's anticipated
operating  results.

THE  COMPANY'S  ABILITY  TO  COMPETE  SUCCESSFULLY  WILL DEPEND, IN PART, ON ITS
ABILITY  TO  PROTECT ITS INTELLECTUAL PROPERTY RIGHTS, WHICH THE COMPANY MAY NOT
BE  ABLE  TO  PROTECT
The  Company  relies  on  a combination of patent, trade secrets, and copyright,
nondisclosure agreements and other contractual provisions and technical measures
to  protect  its intellectual property rights.  Policing unauthorized use of the
Company's  products  is difficult, especially in foreign countries.  Litigations
may  continue to be necessary in the future to enforce its intellectual property
rights, to protect its trade secrets, to determine the validity and scope of the
proprietary  rights  of  others,  or to defend against claims of infringement or
invalidity.  Litigation  could  result  in  substantial  costs  and diversion of
resources and could harm its business, operating results and financial condition
regardless  of  the  outcome  of  the  litigation.
                                       11
<PAGE>

THE  COMPANY  CANNOT  BE  ASSURED  THAT  ANY  PENDING PATENT APPLICATION WILL BE
GRANTED
The  Company  has acquired ownership or exclusive license to a number of patents
or  patent  applications related to its products. However, the Company cannot be
assured  that  any  pending patent application will be granted, or that all such
patents  can  provide  adequate  protection  for its intellectual property.  The
Company's  operating results could be seriously harmed by the failure to protect
its  intellectual  property.  If  the  Company  is  accused  of  infringing  the
intellectual  property  rights  of  other  parties,  it  may  become  subject to
time-consuming  and  costly litigation.  If the Company loses, it could suffer a
significant  impact  on its business and it may be forced to pay damages.  Third
parties  may  assert  that  the  Company's  products  infringe their proprietary
rights,  or  may  assert  claims for indemnification resulting from infringement
claims  against  it.  Any  such  claims may cause the Company to delay or cancel
shipment  of its products or pay damages that could seriously harm its business,
financial  condition and results of operations. In addition, irrespective of the
validity  or  the  successful  assertion of such claims, the Company could incur
significant  costs  in  defending against such claims.  The Company's litigation
may  be  expensive,  may  be  protracted,  and  confidential  information may be
compromised  Whether  or  not  the  Company is successful in any litigation, the
Company  expects  the litigation to consume substantial amounts of its financial
and  managerial  resources.  Further,  because  of  the  substantial  amount  of
discovery  required  in connection with this type of litigation, there is a risk
that  some  of  the  Company's  confidential information could be compromised by
disclosure.

THE  COMPANY'S  BUSINESS  MAY  SUFFER DUE TO RISKS ASSOCIATED WITH INTERNATIONAL
SALES  AND  OPERATIONS
The  Company  anticipates  that  export  products  will  account for most of its
revenues.  International  business  activities are subject to a number of risks,
each  of  which  could impose unexpected costs of the Company that would have an
adverse  effect  on  its  operating  results.  These  risks  include:
-  difficulties  in  complying  with  regulatory  requirements  and  standards;
-  tariffs  and  other  trade  barriers;
-  costs  and  risks  of  localizing  products  for  foreign  countries;
-  reliance  on  third  parties  to  distribute  the  Company's  products;
-  longer  accounts  receivable  payment  cycles;
-  potentially  adverse  tax  consequences;
-  limits  on  repatriation  of  earnings;  and
-  burdens  of  complying  with  a  wide  variety  of  foreign  laws.

THE  COMPANY  ANTICIPATES  THAT  IT  WILL  HAVE  TO  CONTINUE  TO  DEPEND  ON
MANUFACTURERS' REPRESENTATIVES  AGENTS, AND DISTRIBUTORS TO GENERATE SUBSTANTIAL
AMOUNTS  OF  ITS  REVENUES
The  Company anticipates that it will have to continue to rely on manufacturers'
representatives,  agents,  and distributors to sell a significant portion of its
products, and these entities could discontinue selling its products at any time.
The  loss  of any significant agent could seriously harm the Company's operating
results.

THE  COMPANY'S SUCCESS MAY BE AFFECTED BY UNUSUAL GROWTH OF CERTAIN NEW PRODUCTS
There  may  be  new products being introduced in the future which meet unusually
high  global demands.  If the new products' customer base overlaps a substantial
portion  of  the Company's products' customer base, or that the new products use
the  same  key component as the Company's products, the demand for the Company's
products  or  the  supply  of  their  key  component  may  be reduced, which may
seriously  harm  the  Company's  operations.
                                       12
<PAGE>

ITS  OFFICERS,  DIRECTORS  AND ENTITIES AFFILIATED WITH THEM CONTROL THE COMPANY
In  the  aggregate, ownership of the Company's shares by management and entities
affiliated  with the Company own collectively 45.12% of the Company's issued and
outstanding shares of common stock. These stockholders, if acting together, will
be  able  to  significantly  influence  all  matters  requiring  approval by the
Company's  stockholders, including the election of directors and the approval of
mergers  or  other  business  combination  transactions.

THE  VALUE AND TRANSFERABILITY OF THE COMPANY'S SHARES MAY BE ADVERSELY IMPACTED
BY  THE  LIMITED  TRADING MARKET FOR THE COMPANY'S COMMON STOCK, THE PENNY STOCK
RULES  AND  FUTURE SHARE ISSUANCES.  THERE IS A LIMITED MARKET FOR THE COMPANY'S
COMMON  STOCK  IN  THE  U.S.
No  assurance  can  be  given  that a market for the Company's common stock will
develop on the NASD Over-the-Counter Bulletin Board ("NASD OTC-BB"). The sale or
transfer  of  the  Company's  common  stock  by  shareholders in the U.S. may be
subject  to  the  so-called  "penny  stock  rules."
Under  Rule  15g-9  of  the  1934  Act, a broker or dealer may not sell a "penny
stock" (as defined in Rule 3a51-1) to or effect the purchase of a penny stock by
any  person  unless:
(a)  such  sale  or  purchase  is  exempt  from  Rule  15g-9;
(b)  prior to the transaction the broker or dealer has (i) approved the person's
account  for transaction in penny stocks in accordance with Rule 15g-9, and (ii)
received  from  the  person a written agreement to the transaction setting forth
the  identity  and  quantity  of  the  penny  stock  to  be  purchased;  and
(c)  the  purchaser  has been provided an appropriate disclosure statement as to
penny  stock  investment.
The  SEC adopted regulations that generally define a penny stock to be an equity
security  other  than  a  security excluded from such definition by Rule 3a51-1.
Such  exemptions  include, but are not limited to (i) and equity security issued
by  an  issuer  that has (A) net tangible assets of at least $2,000,000, if such
issuer  has  been  in  continuous  operations  for at least three years, (B) net
tangible  assets  of  at least $5,000,000, if such issuer has been in continuous
operation  for  less  than  three  years,  or  (C)  average  revenue of at least
$6,000,000  for  the  preceding three years; (ii) except for purposes of Section
7(b)  of  the  1934  Act and Rule 419, any security that has a price of $5.00 or
more; and (iii) a security that is authorized or approved for authorization upon
notice  of  issuance  for quotation on the NASDAQ Stock Market, Inc.'s Automated
Quotation  System.

It  is  likely that shares of the Company's common stock, assuming a market were
to  develop  in  the U.S. therefore, will be subject to the regulations on penny
stocks; consequently, the market liquidity for the common stock may be adversely
affected  by such regulations limiting the ability of broker/dealers to sell the
Company's  common stock and the ability of shareholders to sell their securities
in  the secondary market in the U.S.  Moreover, the Company's shares may only be
sold  or transferred by the Company's shareholders in those jurisdictions in the
U.S.  in  which an exemption for such "secondary trading" exists or in which the
shares  may  have  been  registered.

                                       13
<PAGE>

CONFLICTS  OF  INTEREST  OF  CERTAIN  DIRECTORS  AND  OFFICERS  OF  THE  COMPANY
From time to time certain of the directors and executive officers of the Company
may  serve  as  directors  or  executive officers of other companies and, to the
extent  that such other companies may participate in the industries in which the
Company  may  participate,  the  directors of the Company may have a conflict of
interest.  In  addition,  the Company's dependence on directors and officers who
devote  time  to other business interests may create conflicts of interest, i.e.
that  the  fiduciary obligations of an individual to the other company conflicts
with  the  individual  fiduciary  obligations  of  the  Company  and vice versa.
Directors  and officers must exercise their judgment to resolve all conflicts of
interest  in a manner consistent with their fiduciary duties to the Company.  In
the  event that such a conflict of interest arises at a meeting of the directors
of  the Company, a director who has such a conflict will abstain from voting for
or  against  the  approval  of  such participation or such terms. In appropriate
cases,  the  Company will establish a special committee of independent directors
to  review  a  matter  in  which  several  directors,  or management, may have a
conflict.  The Company is not aware of the existence of any conflict of interest
as  described  herein.

FORWARD  LOOKING  STATEMENTS
All  statements,  other  than  statements  of historical facts, included in this
registration  statement, including, without limitation, the statements under and
located  elsewhere  herein  regarding  industry  prospects  and  the  Company's
financial  position  are  forward-looking  statements.  Although  the  Company
believes  that the expectations reflected in such forward-looking statements are
reasonable,  it  can  give no assurance that such expectation will prove to have
been  correct. A shareholder or prospective shareholder should bear this in mind
when  assessing  the  Company's  business.

SHARES  ELIGIBLE  FOR  FUTURE  SALES
There has been no market for the Company's shares, and there can be no assurance
that  a  significant  market  will  develop  or  be  sustained.  Future sales of
substantial  amounts  of  the  Company's  shares  (including  shares issued upon
exercise  of  outstanding  options  and  warrants)  in  the  public market could
adversely affect market prices prevailing from time to time and could impair the
Company's  ability  to  raise  capital  through  sales  of  the Company's equity
securities.

COUNTRY  RISKS
There  are  unique  economic  and  political  risks associated with investing in
companies from Korea: Some of Korea's recent financial and economic difficulties
have  included:
-  exchange  rate  fluctuations;
-  interest  rate  fluctuations;
-  reduced  credit  from  foreign  banks;
-  reduced  liquidity  in  the  economy;
-  volatile  stock  prices;  and
-  higher  unemployment.
                                       14
<PAGE>

The  Consumer  Price  Index  ("CPI") published by the central Bank of Korea (the
Korean  equivalents  of  the  U.S. Federal Reserve Board) for the period between
1995  (base  year)  and  2001  is  as  follows:

<TABLE>
<CAPTION>

Year         CPI        Annual increase (%)
<S>          <C>           <C>
1995 (Base)  100            -
1996. . . .  104.9         4.9
1997. . . .  109.6         4.5
1998. . . .  117.8         7.5
1999. . . .  118.8         0.8
2000. . . .  121.5         2.3
2001. . . .  126.5         1.04
</TABLE>

The Korean Government has recently taken a number of steps in response to recent
State  economic  developments,  including  the  following:

-  negotiation  with the International Monetary Fund of a financial aid  package
involving  loans to Korea in an aggregate amount of approximately US$58 billion;
-  negotiation  of  an  agreement  with  a  substantial  number of international
creditors  of  Korean  financial  institutions  to  extend  the maturities of an
aggregate  of  approximately  US$21.8  billion of Korean financial institutions'
short-term foreign currency obligations owed to those international creditors by
exchanging the obligations for longer-term floating rate loans guaranteed by the
Korean  Government;
-  the  Government's  issuance  of  Dollar-denominated  bonds  in  the aggregate
principal  amount  of  US$4  billion  in  April  1998;  and
-  the  announcement  and  implementation  of  a  number  of important economic,
financial  sector,  labour  and  other  reforms.

While  the  Government's reforms of the Korean economy may alleviate its current
economic  difficulties  and  improve  the  economy over time, in the short-term,
implementation  of  the  reform  measures  may:
-  slow  economic  growth;
-  cause  a  budget  deficit  because  of  a  decrease  in  tax  revenues;
-  increase  the  rate  of  inflation;
-  increase  the  number  of  bankruptcies  of  Korean  companies;  and
-  increase  unemployment.

In  addition,  the  continuing  weakness  of  the  Japanese  economy  and recent
volatility  of  the Japanese Yen against the Dollar increases the uncertainty of
economic  stability in Asia in general and may hinder Korea's ability to recover
quickly  from  its  own  economic  difficulties.  Future adverse developments in
Southeast  Asia,  Japan and elsewhere in the world could worsen Korea's economic
difficulties.  Other  developments  that could occur in Korea include social and
labor  unrest  resulting  from  economic difficulties and higher unemployment, a
substantial  increase  in  the  Government's  expenditures  for  unemployment
compensation  and  other  costs  for social programs. Korea may need to increase
reliance on exports to service foreign currency debts, which cause friction with
Korea's  trading partners.  In addition, the economies of neighboring countries,
including  Japan,  China  and  Russia,  could  deteriorate  further.  Any  such
developments  would  hurt  Korea's  plans  for  economic  recovery.

Finally, relations between South Korea and North Korea have been tense over most
of  Korea's history.  The level of tension between the two Koreas has fluctuated
and  may  increase  or  change abruptly as a result of current or future events.
The  occurrence  of  such  events  could  have  a material adverse effect on the
Company's  operations  and  the  price  of  its  shares.

                                       15
<PAGE>

OWNERSHIP  OF  SHARES  MAY  BE  SUBJECT TO CERTAIN RESTRICTIONS UNDER KOREAN LAW
Prior  to  making  an  investment  in 10% or more of the outstanding shares of a
Korean  company,  foreign  investors  are  generally  required  under  Foreign
Investment  Promotion  Law of Korea to submit a report to a Korean bank pursuant
to  a  delegation  by  the  Ministry  of Commerce, Industry and Energy of Korea.
Failure  to  comply with this reporting requirement may result in the imposition
of  criminal sanctions. Subsequent sales by such investors of its shares in such
company  will  also  require  a  prior  report  to  such  bank.

THE  COMPANY  MAY  NOT  BE ABLE TO CONVERT AND REMIT DIVIDENDS IN DOLLARS IF THE
GOVERNMENT  IMPOSES  CERTAIN  EMERGENCY  MEASURES
The  Company  does  not intend to pay dividends on its shares in the foreseeable
future.  However, if it declares cash dividends, such dividends will be declared
in  Won.  In  order  for  the  Company to pay such dividends outside Korea, such
dividends  will  be  converted  into  Dollars  and remitted to the shareholders,
subject to certain conditions. Fluctuations in the exchange rate between the Won
and  the  Dollar will affect, among other things, the amounts a holder of shares
of  the  Company will receive as dividends.  Under Korean law, if the Government
deems that certain emergency circumstances including, but not limited to, sudden
fluctuations  in  interest  rates  or  exchange  rates,  extreme  difficulty  in
stabilizing  the  balance of payments or a substantial disturbance in the Korean
financial  and  capital markets are likely to occur, it may impose any necessary
restrictions  such  as requiring foreign investors to obtain prior approval from
the  Ministry of Finance and Economy for the acquisition of Korean securities or
for the repatriation of interest, dividends or sales proceeds arising fro Korean
securities  or  from  disposition  of  such  securities, including the Company's
shares.  The  Company  cannot  give  any assurance that it can secure such prior
approval  from  the  Ministry of Finance and Economy for payment of dividends to
foreign  investors  in  the  future  when  the  Government  deems that there are
emergency  circumstances  in  the  Korean  financial  market.

THE  COMPANY'S  ABILITY TO RAISE MONEY IN EQUITY OFFERINGS MAY BE CONSTRAINED BY
THE  NEED  TO  REGISTER  THOSE  OFFERINGS  WITH  THE  SEC
The Commercial Code of Korea and the Company's Articles of Incorporation require
the  Company,  with  certain  exceptions,  to  offer  shareholders  the right to
subscribe  for  new  shares in proportion to their existing ownership percentage
whenever  new  shares  are  issued.  The  Company cannot exclude U.S. holders of
shares  from these offers, and must thus register those offers with the SEC.  If
the Company cannot, or chooses not to register these offerings, the Company will
be  unable  to consummate them, which will restrict the range of capital raising
options  available  to  the  Company.

EXCHANGE  RATE  FLUCTUATIONS  MAY  ADVERSELY  AFFECT  THE  COMPANY'S  RESULTS OF
OPERATIONS
As a result of such sharp depreciation, the Government was forced to effectively
suspend  its  efforts to support the value of the Won, and on December 16, 1997,
the  Government  allowed  the Won to float freely.  Such depreciation of the Won
relative to the Dollar increased the cost of imported goods and services and the
Won  revenue  needed by Korean companies to service foreign currency denominated
debt.  Since  then,  however,  the  Won,  while it has fluctuated, has generally
appreciated  relative  to  the  Dollar  and  other  major  foreign  currencies.

                                       16
<PAGE>

ITEM  4.  INFORMATION  ON  THE  COMPANY
---------------------------------------
A.  HISTORY  AND  DEVELOPMENT  OF  THE  COMPANY
The Company was incorporated in Korea on April 19, 1994 for the purpose of
developing  and  manufacturing medical devices, particularly in the Oriental and
Natural/Alternative  Medicinal  fields.  In July 1998, the Company completed the
acquisition  of  Hippo Medical Devices Co. Ltd. ("Hippo"), a Korean company that
was  engaged  in selling medical equipment. The acquisition of Hippo by Meridian
was a synergistic union whereby the sales and distribution offices of Hippo were
consolidated  with  the  research  and  manufacturing  divisions of the Company.

On  August 30, 1999, the Company agreed to sell, in an arm's length transaction,
certain assets amounting to $1,284,556 relating to two product lines that it had
sold  since  the  1998  acquisition of Hippo, to Medicore Co. Ltd., an unrelated
Korean  company.  In  return,  Medicore  assumed  certain liabilities, primarily
attributed  to  the  two product lines, of the Company in the same amount. These
product lines are the Urea Breath Test Device (UBT) and Infra-Red Imaging System
(IR-2000).  This  transaction  was  completed  on  December  31,  1999.

Pursuant to an Agreement and Plan of Reorganization (the Merger Agreement) dated
February  6,  2001,  The  Company  acquired all the outstanding shares of common
stock  of  By George Holding, Corp. (By George), a Georgia corporation, from the
shareholders thereof in an exchange of an aggregate of 68,142 shares (equivalent
to  1,703,550  post  split  shares)  of  common  stock  of the Company and other
consideration  of  payments  of certain fees and expenses. Immediately following
the  Acquisition, ABR Meridian (Georgia) Inc. (Subco), a Georgia corporation and
a  wholly-owned subsidiary of the Company, merged with By George (the Merger) in
a  transaction  in  which  the  Subco  became  the  surviving  corporation.

Upon  effectiveness of the Acquisition and Merger, pursuant to Rule 12g-13(a) of
the  General  Rules  and  Regulations  of the Securities and Exchange Commission
(SEC),  the  Company  elected  to  become  the successor issuer to By George for
reporting  purposes  under  the Securities Exchange Act of 1934, as amended (the
1934  Act)  and elects to report under the 1934 Act effective February 12, 2001.

On  September 26, 2001 the Company incorporated Meridian Chinese Corporation and
Beijing  Meridian  Medical  Equipment Co., Ltd., partially owned subsidiaries to
initiate  and establish its business in China. The Company also incorporated its
US  subsidiary,  as  Meridian  America  Medical Inc (MAMI), in February 2002, in
preparation  for  the  launch  of  the  Meridian  products  into  the US market.

On  February  13, 2002, the Company was accepted for trading on the OTC Bulletin
Board  under  the  symbol  MRDAF.

The  Company's  Corporate  head office is located at 9th Flour, Seoil Bldg. 222,
Jamsilbon-dong,  Songpa-gu  Seoul,  Korea.

                                       17
<PAGE>

B.  BUSINESS  OVERVIEW

The  Company is engaged in the research, development, manufacturing and sales of
medical  devices  for  the Oriental and Natural/Alternative Medicine industries.
The Company's major customers are Oriental medical hospitals and clinics as well
as  Western  medical hospitals and clinics. The Company is currently selling its
products  in  Korea,  China,  ASEAN,  Latin America and North America. Through a
strategic  acquisition, the Company has expanded and gained domestic sales force
and  channels.  The  Company intends to continuously expand its sales efforts in
several  countries  through  establishing  additional  branch  offices  and
distribution  and  sales  agencies.

The  Company's  products cross all boundaries of health care disciplines and are
useful  in  the  practice  of  medicine,  osteopathy,  homeopathy,  naturopathy,
acupuncture  and  other  complementary  disciplines.  If  stress or imbalance is
detected  in  a  patient,  the  Company's  products  can  identify  the meridian
imbalances  in  a  person's  body  and assist the practitioner in recommending a
course  of treatment or therapy to alleviate the stress or to restore balance to
the  body's  meridian  systems.

The  Company currently sells four different products to healthcare practitioners
throughout  the  domestic and overseas market. These include the MERIDIAN lines,
the  McPulse,  the  ABR-2000 and the LAPEX. The MERIDIAN medical devices perform
meridian  stress  analysis  through measuring electronic feedback at acupuncture
points  by  using  non-invasive  electro-acupuncture  principles.  The  McPulse
analyzes  heart  function, arterial elasticity, dilations, resistance, and aging
through  measuring  pulse  waveform.  The ABR-2000 automatically analyzes stress
related  body problems by measuring the autonomic electro-physiological response
of  skin.  The  LAPEX-2000  is  a  low  power  semiconductor  laser  device  for
non-invasive  therapy  of  blood  and  tissue.

On  September 26, 2001 the Meridian Chinese Corporation and the Beijing Meridian
Medical  Equipment  Co., Ltd. (hereafter BMMEC) were established to initiate the
Company's  business in China.  BMMEC (Mr. Trigon Jung; investor and president of
BMMEC)  is  a  joint corporation of Meridian Co., Ltd. and Mr. Trigon Jung. Main
businesses  of BMMEC are publicity activities and setting up dealership networks
for  the  sales  in  China.  Also  Meridian  is  planning  to  give  BMMEC  the
manufacturing  license  of its products in the future. Meridian has made over US
$600,000  direct  sales  in  China  since  1999.

The  Company  incorporated its US entity as Meridian America Medical Inc (MAMI),
in  February  2002,  in preparation for the launch of the Meridian products into
the  US  market.  The  newly  formed company MAMI managed to achieve US $150,000
sales  in  the  initial two months after incorporation and expects a significant
increase  in  sales  during  the  next quarter.  MAMI currently sells 3 meridian
lines,  Meridian  II,  Meridian  - plus, and Meridian - portable; they expect to
sell  ABR  - 2000, an automatic whole body-screening device and McPulse, a pulse
waveform  analyzer in second half of this year in the US market when they obtain
FDA  approval.

As  of Mar. 19, 2002, LAPEX - 2000, Laser therapy device, has qualified for a CE
(Conformities  European)  Marking  which  is  the  unification  standard  of the
European Union (EU) for products concerning the safety of the human body, health
and  the  protection  of  the  environment.  The CE Marking is the certification
necessary  to  sell  the  Meridian  products  in  the  EU  market.

A  California University, South Baylor University Research Center, has requested
the  Meridian  II  for  clinical  testing,  on  May  2002.  The Meridian II is a
computer-assisted  meridian  assessment  and evaluation device.  After the first
month of testing the University requested several more of the Meridian II, which
will  be  placed  in  Anaheim and Los Angeles campuses as training equipment for
Oriental  Medical  Intern  Program.  South Baylor University is one of the major
Oriental  Medical  /  Acupuncture  Schools  in  California,  which is one of the
largest  Oriental  and  alternative  medical  States  in  the  US.
                                       18
<PAGE>


PRODUCTS  OF  THE  COMPANY

MERIDIAN  LINE  OF  PRODUCTS

The  Meridian line of products includes the Meridian-II, Meridian Plus, Meridian
-Portable  and  ABR  2000.  These  products are computer assisted assessment and
diagnostic  devices, which are based on the analysis technique, pioneered by Dr.
Reinhold  Voll, a German medical doctor. Termed Electro-Acupuncture according to
Voll  (E.A.V.),  the assessment process incorporates elements of Western science
and  principles  of  traditional Chinese medicine. Practitioners use electrical,
magnetic, sonic, acoustic, microwave and infrared devices to screen for or treat
health  conditions  by  detecting imbalances in the body's energy field and then
correcting  them.  E.A.V. works by measuring the meridian lines on the hands and
feet  that correspond to the different organs in the body. The purpose of E.A.V.
is  to  establish  a functional testing of organs and tissues by measuring their
respective  acupuncture points. The conductance (capacity to let the stimulation
current  through)  of  an  organ  or  a  tissue is measured in order to discover
energetically  unbalanced  points  knowing that the energetic equilibrium of the
human  organism  is  altered,  among  other  things,  by  the  negative ambiance
influence exercised by some medications, stress, poisons, insecticides, viruses,
bacteria,  harmful  electromagnetic  fields and inflammations as well as certain
aliments.

MERIDIAN-II

The  Meridian-II  is  a  computer assisted assessment and diagnostic device that
establishes  a  functional  testing  of  organs  and  tissues by measuring their
respective  acupuncture  points  and  delivers  a  complete  computer  drafted
evaluation  for  analysis.  If stress or imbalance is detected in a patient, the
Meridian-II  can  identify  the  meridian imbalances in a person's body and also
assist  the  practitioner  in  recommending  a course of treatment or therapy to
alleviate  the stress or to restore balance to the body's meridian systems. This
provides  the  health practitioner with the ability to detect a potential health
problem  and  to  treat it early before the problem manifests itself. The device
also  allows  the  practitioner to monitor the progress of corrective therapies.

The  device  is in the structure of a cart that includes a touch screen monitor,
computer, printer, a set of medical instruments and supplemental parts including
hand  and  foot  electrodes.

ASPECTS                 MERIDIAN-II  DESCRIPTION

Features
     Point  finder  (ARC)
     MS  WINDOWS  98
     Better  curative  effect  (UPM)
     Easy  operation  (TOUCH  SCREEN)
     Single  body  design

Structure
     Main  body:  CART  in  exclusive  use
                                       19
<PAGE>

PC:
     CPU:  P-233MHz,  MEMORY:  32MB,  HDD:  6.4GB
     OS:  WINDOWS  98,  CD  ROM:  40X,  VGA  AGP  4MB
     15  inch  Colour  Monitor  (Speaker  inside),  HP  930  C
     Inkjet  Printer

A  set  of  medical  instruments:
     PB-Electrode:  DR/R/L/ST/TS
     Cable  Set
     Band:  S.L.  2ea

Parts:
     Hand  electrode  (BAZ  2ea,  CMP  1ea):  3  ea
     Foot  electrodes  (left,  right,  foot  stool):  1  set
     Upper  limited  frequency  of  cable:  1set
     ARC  PB:  1ea
     OPERATIONAL  MANUAL:  1sheet
     MULTI  TAP:  1  set
     MOUSE  PAD:  1  ea


MERIDIAN-PLUS
Similar  to the Meridian-II, the Meridian-Plus is a computer assisted assessment
and  diagnostic  device,  however,  it  comes in a different design and offers a
computer  as  an  option.

ASPECTS                 MERIDIAN-PLUS  DESCRIPTION

Features
     Point  finder  (ARC)
     MS  WINDOWS  98
     Better  curative  effect  (UPM)
     Popular  design

Structure
     Main  Body:  CART  in  exclusive  use

     PC:  (Optional)
     CPU:  PIII-667MHz,  MEMORY:  128MB,  HDD:  10.2GB
     OS:  WINDOWS  98,  CD  ROM:  40X,  VGA  AGP  4MB
     MODEM:  56K  FAX  MODEM
     15  inch  Color  Monitor  (Speaker  inside),  HP  930  C
     Inkjet  Printer

     A  set  of  medical  instruments:
     PB-Electrode:  DR/R/L/ST/TS
     Cable  Set
     Band:  S.L.  each  2ea
                                       20
<PAGE>

     Parts:
     Hand  electrode  (BAZ  2ea,  CMP  1ea):  3ea
     Foot  electrodes  (left,  right,  footstool):  1set
     Upper  limited  frequency  of  cable:  1set
     ARC  PB:  1ea
     OPERATIONAL  MANUAL:  1sheet
     MULTI  TAP:  1set
     MOUSE  PAD:  1ea

MERIDIAN-PORTABLE

15     The  MERIDIAN-Portable  is  structured  as  a  compact  and transportable
console  unit separate from but packaged with the assistant computer. It is very
similar  in  features  and  structure  with  other currently selling products of
competitor  manufactures  in  the  Unite  States  and  the  European  Union.

ASPECTS               MERIDIAN-PORTABLE  DESCRIPTION

Features
     Measurement  probe  with  point  finder
     Expert  software  based  on  MS  WINDOWS  95/98
     (English,  Spanish,  Chinese,  Korean  version)
     Treatment  signal  with  better  penetration  effect
     Remedy  test  with  honeycomb  electrode
     Transportable  separate  console  with  compact  design

Structure
     System  console  with  computer  interface  (RS-232C)
     Electrodes  set
     Measurement  probes
     Hand  electrodes
     Clip  electrode  for  hand-free  point  treatment
     Electrodes  cable  set


ABR-2000

The  ABR-2000  is a whole body screening stress assessment and diagnostic device
that identifies the areas of the human body which are experiencing trauma due to
the  effects of stress. The device traces autonomic responsive conditions of the
different  types  of  stress-related  diseases.

The  device  sends a low-frequency impulse throughout the human body and detects
minute  physical  changes  by  measuring  electrophysiological  responses of the
autonomic nervous system. Irregular responses may indicate areas where organs or
parts  of  the body are deteriorating due to stress. The patient stress analysis
report  is automatically produced in 5 minutes, allowing the health practitioner
to  quickly  make  recommendations  to  the  patient.
                                       21
<PAGE>

The  device comes equipped with a one-touch assessment and diagnostic system and
a  printer.

ASPECTS           ABR-2000  DESCRIPTION

Features
     To  diagnose  the  differentiation of pathological conditions in accordance
     with  the  eight  principal  syndromes
     Easy  to  operate
     One-touch  automatic  system  allows  the  beginner  to  operate  it easily
     A  medical  assistant  is  able  to  measure  it for the medical specialist
     Very  Positive  Response  from  the  Patients
     Right  after  measurement,  the  results  print  out  in  real  time
     Automatic  measurement  in  5  minutes
     No  stress,  non-invasive,  and  comfortable  diagnosis
     Print  paper  is reusable - available for chart storage and patient's chart

Structure
     Body:  Single  body
     A  set  of  electrodes:  Copper  electrodes  (a set of head, hand, and foot
     electrodes)
     Plotter:  Magnetic
     Pen:  Red,  blue,  black
     Print  paper:  300  papers


LAPEX-2000

The  LAPEX-2000  is  a  semiconductor  laser therapeutic device, which applies a
laser  to  the  foci  of  the human body without damaging the skin tissue and in
turn,  promotes  healing  of  any  damaged skin tissue. The use of laser therapy
facilities,  among  other  things, increase of blood flow, vitalization of cells
and  increase  of  protein  synthesis  which can assist in the treatment of soft
tissue damage, acute and chronic joint diseases, chronic pain and improvement of
circulation.

The  LAPEX-2000  comes  equipped  with  an advanced digital semiconductor laser.

ASPECT          LAPEX-2000  DESCRIPTION

Features
     Advanced digital semiconductor laser, solid curative effect, semi-permanent
     No  other  supplies  are  necessary
     Non-invasive  laser
     Practical  for  small  spaces,  easy  to  move

Structure
     Single Laser Probe (PW: Pulsed Wave): Trigger Point Monitoring Function and
     Applying  Laser  to  Trigger  Point
     Multi  Laser  Probe  (CW: Continuous Wave): To address the largely affected
     parts
     Non-LIB/LIB  Laser  Probe  (Intra/vascular  Laser  Irradiation  of  Blood):
Non-invasive/Invasive  venous  blood,  easy  to  operate,  solid curative effect
                                       22
<PAGE>

MCPULSE

McPulse  is  medical  equipment,  which can be used for measurement and analysis
pulse  waveform.  The pulse wave is the arterial pressure change that originates
from  heart beat and transmits through an artery. The pulse wave is changed with
the systolic power of heart and the vascular condition (the arterial elasticity,
resistance, etc.), followed by, the pulse wave reflects the functional status of
cardio-vascular  circulation. McPulse irradiates IR (infrared) to finger-tip and
obtains  pulse wave information with the light absorbing characteristics of HbO2
of  arterial  blood.   All  procedure of measurement, calculations, analysis and
print-out  can  be  performed  automatically  less  than  a  minute  with  fully
non-invasive  method.

AUTOMATED  DIGITAL  PULSE  WAVEFORM  EXAM
-----------------------------------------

-     Exam  that  need  for  preventing  geriatric  diseases.
-     Hardening  the arteries, arterial elasticity, and obstruction of periphery
      can  be  detected  in  early  stage.
-     The  Pulse  can  be  seen  while  analysing  the  pulse  waveform.
-     No  harmful  to  human  body  whatsoever
-     Diagnosis  can  be  done  within  a  minute.
-     Results  can  be  obtained  right  after  diagnosis.

DPA

The  DPA  (Digital  Arterial  Pulsewave  Analyzer)  is  a  computer-based  model
succeeding McPulse series.  It supports all the functions of McPulse as well as,
it  can  analyze  heart rate variability (HRV) from EKG data. Computer can store
all  patient's  Data.  Structure  is  configured  with  McPulse  console,  EKG
electrodes,  computer  software  with  WINDOWS  base,  and  cart.

OTHER  PRODUCTS  OF  THE  COMPANY

HEMOSCOPE  -  BLOOD  ANALYZER

The  Hemoscope  is  a  digital-based  blood analysis system. The system works by
analyzing  one  drop  of  blood  for  conditions  of  red and white blood cells,
clearness  and nutritive conditions, as well as development of the immune bodies
&  diseases.  It utilizes a powerful microscope using phase differences and dark
vision  to  assess  a person's blood for the possible detection of the causes of
functional  diseases.

The  Hemoscope  comes  equipped  with  microscope  and  ancillary  components, a
computer,  monitor,  modem  and  printer.
                                       23
<PAGE>

INDUSTRY  BACKGROUND

The  medical  instruments  industry is characterized by low-volume production of
various  medical  equipment and apparatus. It contains components from a diverse
range  of  industries  such  as  electronics, advanced materials and information
technology  and includes the fields of physics, chemistry, biology and medicine.
In  many  countries,  government  support is provided in the medical instruments
industry as a priority industry. This industry tends to be technology-intensive,
low  energy  consuming  and  non-polluting.

INDUSTRY  TRENDS
Throughout  the  world,  the  medicine  environment  is  changing. In Korea, for
example,  the  popularity of Oriental medicine is rising rapidly. The importance
of  alternative  medicine  has been acknowledged in Europe, North America and in
Asia,  and  accordingly,  these  markets  have  been expanding. As a result, the
interest  in Oriental medicine is growing worldwide with the demand for Oriental
medical  instruments  increasing.  Therefore, as an Oriental medical instruments
manufacturer,  the  Company  is  well  positioned  in  an  expanding  market.

SIZE  OF  INDUSTRY

KOREAN  MARKET
According  to  information  obtained  from the World Health Organization in 1997
that  was  prepared  by  the  Korean  Institute  of  Oriental  Medicine ("Korean
Institute"), the size of the Korean medical instrument industry was estimated to
be  almost  $1  billion  in  2000.  The  domestic  medical instrument market has
sustained  an  average  annual  growth  rate  of  approximately 12% for the past
several  years.

WORLD  MARKET
The  size  of  the  world  medical  instrument industry was estimated to be $169
billion  in  2000,  according to the Korean Institute. Its annual average growth
rate  has  been  approximately  7%.  Oriental  medical instruments and biorhythm
recorders  have  approximately  $5.4 billion and $4.6 billion of market share in
2000,  translating  to  approximately  3.2%  and 2.7% of the total world medical
instrument  market,  respectively.  It is expected that over the next five years
the  total  medical  instrument  market  will  continually  increase.

C.  ORGANIZATIONAL  STRUCTURE
MANAGEMENT  TEAM

HYEON-SEONG  MYEONG,  PRESIDENT,  CEO
Mr. Myeong graduated from the Seoul National University in 1982 with a degree in
Electronic  Engineering.  From  1983  to  1988  he was Section Chief of Research
Center  for  the GoldStar (LG Electronics) Company. From 1990 to 1991 Mr. Myeong
was  Division  Chief  of  Research  for Medison Co. Ltd., a large Korean medical
device  company.  From  1992  to  1993  he  was  the  Chief of the International
Technical  Corporation and the Vice President of a Joint Corporation with Russia
(Ultramed). Since 1994, Mr. Myeong has been the President and CEO of the Company
and  was  the  founder  of  the  Company.

SOO-RANG  LEE,  DIRECTOR  OF  RESEARCH  AND  DEVELOPMENT
Mr.  Lee graduated in 1990 from the Seoul National University, Korea with
a  degree in Electronic Engineering. Mr. Lee was a senior researcher for Medison
Co.  Ltd. from 1990 to 1994. He joined the Company as a research and development
manager  at  the  formation  of  the  Company.  He was appointed the Director of
Research  and  Development  in  1998.
                                       24
<PAGE>

SANG-YEUL  PARK,  DIRECTOR  OF  MANUFACTURING  AFFAIRS
Mr. Park graduated from the Konkuk University, Korea with a degree in Electronic
Engineering.  From  1986 to 1992 he was the manager of production technology for
the  Oriental  Precision  Company(OPC). He was a senior engineer for Medison Co.
Ltd  from 1992 to 1995. He has been a factory manager for the Company since 1995
and was appointed the Director of Manufacturing Affairs for the Company in 2000.

KI-WON  KIM,  DIRECTOR  OF  DOMESTIC  BUSINESS
Mr.  Kim  graduated  from  The  Han-yang  University,  Korea  with  a  degree in
Electronic  Engineering. He was research and development manager and head of the
domestic  sales  department  for  Medison Co., Ltd. He has been president of the
Taegu Meridian Company since 1997 until joining with the Company as the Director
of  Domestic  Business  in  2000.

HEE-YO  PARK,  GENERAL  MANAGER
Mr. Park was head of the planning department in Chonbang Corp from December 1992
to February 1995. Since February 1995 he has been General Manager, Secretary and
Treasurer  of  the  Company

D.  PROPERTY,  PLANT  AND  EQUIPMENT
The  Company's products are assembled from purchased and manufactured components
at  its  factory  in  Kangwon  Province (687 - 6, Sangohan - Ri, Hongchun - Eup,
Hongchun  - Kun, Kangwon - Do, Korea). Virtually all of the components making up
the  Company's  products  are readily available from outside domestic suppliers.
Some  of  the  components  have  been  designed by the Company and/or are custom
manufactured  to  its specifications. The following table sets forth the offices
and  their  addresses  presently  located  in  Korea.


<TABLE>
<CAPTION>



Office               Location
--------------  -------------------
<S>             <C>                  <C>

Kangwon. . . .  Owned                687 - 6, Sangohan - Ri, Hongchun - Eup, Hongchun - Kun,
Factory. . . .                        Kangwon - Do, Korea

Seoul. . . . .  Leased               9th Floor, Seoil Bldg. 222, Jamsilbon-dong, Songpa-gu Seoul,
 Meridian. . .                       Korea

Daegu. . . . .  Leased               Gyeongsangbuk-do, Daegu, Korea
 Meridian
--------------
Busan. . . . .  Leased               Gyeongsangnam-do, Busan, Korea
 Meridian
--------------
Gwangju. . . .  Leased               Jeola-do, Korea
 Meridian
--------------
Jejung Medical  Leased               Gyeonggi-do, Gangwon-do, Korea

</TABLE>

ITEM  5.  OPERATING  AND  FINANCIAL  REVIEW  AND  PROSPECTS
-----------------------------------------------------------

The  following  discussion  and  analysis  is  based  on  and  should be read in
conjunction  with  the  Company's  audited  consolidated  financial  statements,
including the notes thereto, and other financial information appearing elsewhere
herein. The audited consolidated financial statements have been translated in US
dollars and prepared in accordance with accounting principles generally accepted
in  the  United  States.
                                       25
<PAGE>

OVERVIEW
The  Company  was  incorporated  in Korea on November 9, 1994 for the purpose of
developing  and  manufacturing medical devices, particularly in the Oriental and
Natural  medicine  fields.  On  August 30, 1999, the Company transferred certain
assets  and  liabilities  relating  to two product lines that it was carrying on
behalf of other companies, to Medicore Co. Ltd., a Korean company. These product
lines  included the Urea Breath Test Device ("UBT") and Infra-Red Imaging System
("IR-2000").  The  transfer  resulted in the reduction of certain liabilities of
the  Company in the amount of $1,284,956. The transfer was completed on December
31,  1999.  On November 3, 2000 the Company received clearance from the Food and
Drug  Administration  of  the United States Public Health Service (the "FDA") to
market  three  of  its  products:  the  Meridian-II,  Meridian-Plus,  and
Meridian-Portable  as  Class  2  products  in  the  United  States.

BUSINESS  OF  THE  COMPANY
The  Company is engaged in the research, development, manufacturing and sales of
medical  devices  for the Oriental and Natural/Alternative Medicine markets. The
Company's  products  cross all the boundaries of health care disciplines and are
useful  in  the  practice  of  medicine,  osteopathy,  homeopathy,  naturopathy,
acupuncture  and  other  complementary  disciplines.  If  stress or imbalance is
detected  in  a  patient,  the  Company's  products  can  identify  the meridian
imbalances  in  a  person's  body  and assist the practitioner in recommending a
course  of treatment or therapy to alleviate the stress or to restore balance to
the  body's meridian systems. The Company currently sells four different product
lines,  including Meridian, ABR-2000, LAPEX-200, and McPulse, DPA, to healthcare
practitioners  throughout the world. The Meridian lines of products are computer
assisted  assessment and diagnostic devices. The ABR-2000 is a stress assessment
and  diagnostic  device  that  identifies  the  areas of the human body that are
experiencing  trauma  due  to  the  effects  of  stress.  The  LAPEX-2000  is  a
semiconductor  laser  therapeutic  device.  The McPulse analyzes heart function,
arterial  elasticity,  dilations,  resistance, and aging through measuring pulse
waveform.  The  Company's  major  customers  are public health centers, Oriental
medicine  hospitals  and  clinics  as well as Western hospitals and clinics. The
Company  is currently selling its products in Korea, China, United States, South
America  and  Southeast  Asia.  The  Company intends to expand its sales efforts
internationally  through  establishing  additional  branch offices and sales and
distribution  agencies.  The  Company's  goal is to become a leading supplier of
medical  devices  to the Oriental and Natural/Alternative Medicine markets.  The
Company  expects  to  accomplish  this  goal  by:
-  focusing  on  growing  market  applications;
-  maintaining  technological  advances  in  product  development;
-  developing  products  aimed  at  new  markets;  and
-  establishing  strategic  relationships  with  key  suppliers  and  customers.
                                       26
<PAGE>

A.  OPERATING  RESULTS

YEAR  COMPARISON  2001  TO  2000
For  the year ended December 31, 2001, the Company achieved sales revenues of  $
5,289,561 resulted in a gross profit of $ 2,811,455 compared with sales revenues
of  $5,304,040  that resulted in a gross profit of $2,325,065 for the year ended
December 31, 2000.  The Company's operating loss increased to $1,184,695 in 2001
from  a loss of $1,013,911 in 2000.  Such increase in the operating loss was due
primarily to the increased expenditure of funds for certain selling, general and
administrative  expenses  such as bad debt expense and commissions. The increase
in  bad  debt  expense results from the Company's conservative evaluation of its
trade accounts receivable in the light of uncertain economic times. The increase
in  commissions  is  reflection of the Company's increased selling and marketing
efforts.  Total  selling,  general  and  administrative  expenses  increased  to
$3,996,150  for  the  year  ended December 31, 2001 from $3,338,976 for the year
ended  December 31, 2000. The Company spent $555,865 on research and development
for  the  year  ended December 31, 2001 as compared to $540,671 for the previous
year.  For  the  year  ended  December  31,  2001 the Company recorded inventory
write-down  due  to decline in market value amounting to $140,936 as compared to
$516,312 for 2000.  The loss in value of inventory and the consequent write-down
to  a  new  cost  basis  represents  approximately 2.7% of gross sales for 2001.
Although material in amount, the inventory is still on hand and salable, and the
Company  moves  into  the  year 2002 with a strong balance sheet based on solid,
realizable  assets.  The  Company  expects  that  the  future  loss  in value of
inventory  and  the consequent write-down will be stabilized at approximately 2%
of  gross  sales.  In pursuit of continuing increasing sales levels, the Company
was building inventories concurrently with its expanded marketing efforts.  As a
result,  inventories  increased  to 2000 levels.  The Company's selling, general
and  administrative  expenses  and  inventory increases were incurred due to the
efforts expended by the Company in bringing its products on stream and expanding
to other markets.  In the same period, working capital decreased to $ 474,619 in
2001  from working capital of $1,008,643 in 2000.  As of the year ended December
31,  2001,  the  Company  had  an accumulated deficit of $3,869,737. The current
year's  contribution  to the deficit was financed in part by working capital and
in  part by the issuance of a series of bonds for net proceeds to the Company of
$1,136,448.

B.  LIQUIDITY  AND  CAPITAL  RESOURCES
The  Company's sources of liquidity have historically been cash from operations,
capital  working  lines  of  credit, debt and equity financing.  The Company has
generated  revenues  for  the  last  three years but expanding operations of the
Company  has  required  significant  amounts of cash in excess of cash generated
from  operations.  Therefore,  the Company has continued to seek additional debt
and  equity  financing  opportunities.
On  May 7, 1999 the Company issued bonds in the aggregate amount of $788,491. In
December  1999 the Company converted the Bonds into 53,853 (1,346,325 post Stock
Split  shares)  shares  of  the  Company.
During  1999  the Company issued 5,000,000 post split shares of common stock for
net proceeds to the Company of $825,764. In the month of March 2000, the Company
raised  by  way  of  the  sale of 750,000 post Stock Splits shares of its common
stock for net proceeds of $669,344. During 2001, the Company sold two new series
of  non-guaranteed  bonds  for  net  proceeds  of $1,136,448 at interest between
12.15%  and  13.92%. The maturity dates of non-guaranteed debentures is $757,632
in the year 2003 and $378,816 in the year 2004. For the year ending December 31,
2001, cash flow from operations did not satisfy all of the Company's operational
requirements  and  cash  commitments.
For the year ended December 31, 2001 the Company had long- term debt obligations
with various lending institutions totalling $1,345,592 as compared to $1,607,048
for  the  year ended December 31, 2000. The maturity dates of the long term debt
is  $251,535  in the year 2002,  $392,985 in the year 2003, $447,332 in the year
2004, $233,400 in the year 2005 and $20,340 in the year 2006 and thereafter. The
Company's  land  and  buildings  were  pledged  as  collateral for the Company's
short-term  and  long-term  borrowings.
As  of  December  31,  2001  the  Company  had  working  capital  of  $474,619.
                                       27
<PAGE>

C.     RESEARCH  AND  DEVELOPMENT,  PATENTS  AND  LICENSES,  ETC.

RESEARCH  AND  DEVELOPMENT
It  is the goal of the Company to continually make enhancements and improvements
to  its  products.  Costs incurred to make routine enhancements or improvements,
design  changes  to  existing  products  and  trouble shooting in production are
excluded  from  research  and  development  expenses.

PROPRIETARY  TECHNOLOGY
The  Company  has  6 registered patents at the Korea Industrial Property Office.
The  Company  believes  that  Korean  intellectual property laws and regulations
afford  owners  of intellectual property protections similar to those enjoyed by
owners  of  intellectual  property  in  the  United  States. Korean intellectual
property  laws  were  amended  at  the  end  of  1995 to harmonize them with the
Trade-Related  Aspects  of  Intellectual  Property  Rights  Agreement.

The  Company's  registered  patents  are  as  follows:


<TABLE>
<CAPTION>



TECHNOLOGY DESCRIPTION          REGISTRATION NUMBER  DATE OF REGISTRATION
------------------------------  -------------------  --------------------
<S>                             <C>                  <C>

Electrode ring device for home
99 treatment . . . . . . . . .               236277  September - 99
------------------------------  -------------------  --------------------
Electrode clamp device for
home 99 treatment. . . . . . .               236276  September - 99
------------------------------  -------------------  --------------------
Automatic detection of
meridians by probe device. . .               210233  April - 99
------------------------------  -------------------  --------------------
Medicament energy
information transferring
system . . . . . . . . . . . .               171667  October - 98
------------------------------  -------------------  --------------------
Insulation device of meridian
remedial apparatus . . . . . .               144993  April - 98
------------------------------  -------------------  --------------------
Diagnostic device using the
electric features of the human
body . . . . . . . . . . . . .               130791  November - 97
------------------------------  -------------------  --------------------
</TABLE>

The Company relies on a combination of patent and trade secrets to establish and
protect  the proprietary rights in its products. In order to protect and support
current and future development of its products, the Company expects that it will
continue  to  make  application  for  patents  at  the Korea Industrial Property
Office. The Company believes that the ownership of patents will be a significant
factor in contributing to its business. However, the success of the Company will
depend  primarily  on  the innovative skills, technical competence and marketing
abilities  of  its  personal.  In  addition, there can be no assurances that the
Company's current and future patent applications will be granted, or if granted,
that  the  claims covered by the patents will not be reduced from those included
in  the  Company's  applications.  Claims  by  third  parties that the Company's
current  or future products infringe upon their intellectual property rights may
have  a material adverse effect on the Company. Intellectual property litigation
is  complex  and  expensive  and  the outcome of this litigation is difficult to
predict. Any future litigation, regardless of outcome, may result in substantial
expense to the Company and significant diversion of the Company's management and
technical  personal.
                                       28
<PAGE>

REGULATORY  RESTRICTIONS
Use  of  the Company's products internationally is subject to various government
regulatory  requirements  on  a  country-by-country  basis.  Europe,  the  U.S.,
Canada,  Australia,  Japan  and  China each have their own product certification
systems.  As  a result, this has slowed the process for the Company to expand in
the  world market. Even if there are no technical difficulties, its products are
directly  involved  with  human  life,  and  require  that  the  Company  obtain
government  approval in clinical safety of the products through various analysis
and  testing  procedures.  As noted above, the Meridian-II and the Meridian-Plus
have  received FDA approval to be sold as Class 2 products in the U.S. The table
below  includes all the regions in the world where Meridian's products have been
approved  for  sale.
<TABLE>
<CAPTION>



REGION                             REGULATION                   PRODUCTS APPROVED

<S>                                <C>          <C>                                                <C>

Korea . . . . . . . . . . . . . .  KFDA         Meridian - II, Meridian Plus, Meridian, ABR -
                                                2000, Lapex - 2000, Hemoscope


China . . . . . . . . . . . . . .  SDA          Meridian - II, ABR - 2000

U.S.A.. . . . . . . . . . . . . .  FDA          Meridian - II, Meridian Plus, Meridian Portable

Canada. . . . . . . . . . . . . .  CSA          Meridian Portable

South America . . . . . . . . . .  FIP          Meridian - II, Meridian Plus, ABR - 2000, Lapex -
                                                2000

EU. . . . . . . . . . . . . . . .  IEC (CE)     MERIDIAN-II, MERIDIAN-Plus, MERIDIAN-
                                                Portable
                                                ABR-2000, LAPEX - 2000

</TABLE>




ITEM  6.  DIRECTORS,  SENIOR  MANAGEMENT  AND  EMPLOYEES
--------------------------------------------------------

A.  DIRECTORS  AND  SENIOR  MANAGEMENT
See  Item  4.C.

B.     COMPENSATION

<TABLE>
<CAPTION>

Name & Principal      Year   Salary ($)  Bonus ($)    Other Annual     All Other
Position               .         .           .      Compensation ($)  Compensation

<S>                  <C>     <C>         <C>        <C>               <C>

Myeong, Hyeon-
seon, (Director,
 President, CEO). .    1998      34,000  Nil        Nil               Nil

                       1999      49,000  Nil        Nil               Nil

                       2000      49,000  Nil        Nil               Nil

                       2001      45,500  Nil        Nil               Nil


Park, Sang - yeul
(Director of
 Manufacturing
Affairs). . . . . .    1998  Nil         Nil        Nil               Nil

                       1999  Nil         Nil        Nil               Nil

                       2000      42,000  Nil        Nil               Nil

                       2001      39,000  Nil        Nil               Nil

Lee, Soo-rang
 (Director of
Manager of
 Research and
 Development) . . .    1998      30,000  Nil        Nil               Nil

                       1999      43,000  Nil        Nil               Nil

                     42,000  Nil         Nil        Nil
                       2000
                     ------
                       2001      39,000  Nil        Nil               Nil
                                       29
<PAGE>

Kim, Ki-Won
 (Director of
 Domestic Sales). .    1998  Nil         Nil        Nil               Nil

                       1999  Nil         Nil        Nil               Nil

                       2000  Nil         Nil        Nil               Nil

                       2001  Nil         Nil        Nil
                     39,000
                     ------
Min, Jae -Ki
(Statutory Auditor)    1998  Nil         Nil        Nil               Nil

                       1999  Nil         Nil        Nil               Nil

                       2000  Nil         Nil        Nil               Nil

                       2001  Nil         Nil        Nil               Nil

Park, Hee-yo
(General Manager) .    1998      25,000  Nil        Nil               Nil

                       1999      30,500  Nil        Nil               Nil

                       2000      30,500  Nil        Nil               Nil

                       2001      29,200  Nil        Nil               Nil

</TABLE>



-     Mr. Park, Sang-yeul received an interest free loan from the Company in the
amount  of  $8,500  which  he  fully  paid  off  in  March  2000.

COMPENSATION  OF  DIRECTORS

Directors  and  directors who are also employees of the Company receive no extra
compensation  for  their  service  on  the  Board  of  Directors of the Company.

EMPLOYMENT  CONTRACTS  WITH  EMPLOYEES  AND  OFFICERS

The  Company  has  not  entered  into  any employment contracts, but anticipates
entering  into  employment  contracts  with  certain  management  and  other key
personnel.

D.  EMPLOYEES
As of July 12, 2002, the Company had 35 employees; 6 employees in administration
and finance; 11 employees in sales and marketing; 10 employees in manufacturing,
operations  and  engineering;  and  8  employees  in  research  and development.
                                       30
<PAGE>

E.  SHARE  OWNERSHIP

STOCK  OPTION  PLANS
Under the Company's Articles of Incorporation, the Company may grant options for
the  purchase  of  its  shares  to certain qualified officers and employees. Set
forth  below  are  the  details  of the Company's stock option plan as currently
contained  in  its Articles of Incorporation (the "Stock Option Plan"). In order
to  qualify  for  participation in the Stock Option Plan, officers and employees
must  have  the  ability  to  contribute  to,  the establishment, development or
technological  innovation  of  the  Company.  Notwithstanding the foregoing, the
following  criteria  shall  not  be  eligible to receive options under the Stock
Option  Plan;  (i)  the  Company's largest shareholder and its specially related
parties, as defined in the Securities and Exchange Act of Korea (the "Securities
Act  of Korea"), (ii) major shareholders and their specially related parties, as
defined  in  the  Securities  Act  of Korea, and (iii) any shareholder who would
become  a  major  shareholder  upon  exercise of stock options granted under the
Stock  Option  Plan.  Under  the Securities Act of Korea, a major shareholder is
defined  as  a  shareholder  who  (i)  holds  10%  or  more of shares issued and
outstanding  or  (ii)  has actual control over major management decisions. Under
the  Securities  Act of Korea the largest shareholder of a company is the person
who  holds  the  largest number of issued and outstanding shares of the company.
The  specific  terms  and  conditions  of  stock options granted under the Stock
Option  Plan  shall  be approved at a duly convened shareholders' meeting. Under
the  Company's Articles of Incorporation, stock options shall be offered through
(i)  issuance  of  new shares, or (ii) payment in cash or treasury stock held by
the  Company  of  the  difference between the market price of its shares and the
option  exercise  price.  The  maximum  aggregate number of the Company's shares
available  for  issuance under the Stock Option Plan shall not exceed 15% of the
total  number of its shares outstanding. The stock options may not be granted to
all  officers and employees at the same time. Any single officer or employee may
not  be  granted stock options for the shares exceeding 10% of the shares issued
and  outstanding.  Stock options granted under the Stock Option Plan will have a
minimum  exercise price equal to the arithmetic mean of (i) the weighted average
of  the  daily market share prices for the two-month period prior to the date on
which  the  stock  options  are  granted, (ii) the weighted average of the daily
market  share  prices  for the one-month period prior to such date and (iii) the
weighted  average of the daily market share prices for the one-week period prior
to such date. When new shares are issued upon the exercise of the stock options,
the  option exercise price shall not be less than the par value of the Company's
shares.  Stock  options  granted  under  the  Stock Option Plan may be exercised
after the third anniversary date of the shareholders' meeting at which the grant
of  stock  options  under  the  Stock  Option  Plan is approved but prior to the
seventh  anniversary  date  thereof,  unless  otherwise  revoked by the board of
directors.  The  board  of  directors may revoke stock options granted under the
Stock  Option  Plan  if  (i)  a beneficiary resigns prior to the exercise of the
stock  options,  (ii)  the beneficiary causes significant loss to the Company by
his  or  her  negligence  or wilful misconduct, or (iii) an event of termination
specified  in the Stock Option Plan occur. Shares purchased upon the exercise of
stock options granted under the Stock Option Plan will not, at the time of their
issuance,  be  registered with the Securities and Exchange Commission but may be
salable  in  the  public market in the United States in accordance with Rule 144
under  the  Securities  Act  and  applicable  Korean  laws  and  regulations.

The  Company  adopted  the  following material changes with respect to its Stock
Option  Plan:

-  persons  entitled  to  receive  stock  options  has  been expanded to include
researchers,  faculty  members  of  a  university, practising lawyers, certified
public  accountants  who  possess  technological  or managerial capabilities and
Universities  and  Research  Institutes;

-  the  number of stock options granted at any one time cannot exceed 50% of the
total  issued  and  outstanding  shares  of  the  Company;

-  stock  option  holders shall be entitled to exercise their stock options only
after  having  served  in  the  Company  for  two  (2)  years;  and
-  the exercise price per share upon exercise of stock options shall not be less
than  the  greater  of  the  market price of shares valued as of the date of the
grant  of  the  stock  options  or  the  par  value  of  the  shares  concerned.
                                       31
<PAGE>

On  February  23,  2000,  the  Company  granted  stock  options to its executive
officers,  directors  and  16  employees  to purchase 19,874 (496,850 post Stock
Split  shares)  of  its  common shares at a price of $22.00 per shares ($.88 per
post Share Split). Stock options granted to its executive officers and directors
will  vest  on February 23, 2003 and are exercisable until February 22, 2007. On
March  19,  2001,  the  Company  granted stock option to its executive officers,
directors  and  13  employees  to  purchase 425,250 common shares at an exercise
price  of Won 680 (equivalent to $0.53 at the spot exchange rate of Won 1,298 to
$1) per share. The options will vest on March 19, 2004 and are exercisable until
March  18,  2008.

SHARE  OWNERSHIP

The  following  table  sets  forth  certain information regarding the beneficial
ownership  of  the common stock of the Company as of July 12, 2002, after taking
into  effect  the  Acquisition  and  the Stock Splits of: (a) each person who is
known  to  the  Company  to  own  beneficially  more  than  5%  of the Company's
outstanding  common stock, (b) each of the Company's directors and officers, and
(c)  all  directors  and  officers  of  the  Company,  as  a  group:
<TABLE>
<CAPTION>

Name and address of beneficial owner   Amount Stock Beneficially Owned  Percentage of Class
and position with the company                         .                          .

<S>                                    <C>                              <C>

Myeong, Hyeong-seong. . . . . . . . .  1,281,100 common shares                 8.06%
(President, CEO and Director)
#997-4 Daechi-dong
Gangnam-gu, Seoul, Korea

Park, Sang-yeul (Director). . . . . .     87,500 common shares                 0.55%
687-6 Sangoan-ri, Hongchun-eup,
 Hongchun- kun, Kangwon-do, Korea

Lee Soo-rang. . . . . . . . . . . . .    205,175 common shares                 1.29%
(Director, Manager of
Research and Development)
#997-4 Daechi-dong Gangnam-
gu,Seoul, Korea

Kim, Ki-won . . . . . . . . . . . . .   265,000 common shares                  1.67%
(Diector, Domestic Sales)
#997-4 Daechi-dong
Gangnam-gu, Seoul, Korea

Min, Jae-ki . . . . . . . . . . . . .    Nil                                     Nil
(Statutory Auditor)
#997-4 Daechi-dong
Gangnam-gu
Seoul, Korea

Park, Hee-yo. . . . . . . . . . . . .   107,575 common shares                   0.67%
(General Manager)
#974-4 Daechi-dong
Gangnam-gu, Seoul, Korea

</TABLE>
                                       32
<PAGE>

ITEM  7.  MAJOR  SHAREHOLDERS  AND  RELATED  PARTY  TRANSACTIONS
       ----------------------------------------------------------------

A.     MAJOR  SHAREHOLDERS

The  following  table  sets  forth  information  with  respect to the beneficial
ownership  of  our shares as of June 27, 2002, by (1) each person known to us to
own  beneficially  more than five percent (5%) of our shares, and (2) all of our
directors  and  executive  officers  as  a  group.
<TABLE>
<CAPTION>


Name and address                                                Amount Stock Beneficially  Percentage of Class
                                                                          Owned

<S>                                                             <C>                        <C>

Terasource Kosdaq Venture Investment.
8FR Dongshin Bldg. 141-30 Samseong-. . . . . . . . . . . . . .  2,066,700 common shares                  12.99%
dong Kangnam-gu Seoul Korea

Terasource Venture Investment Capital
8FR Dongshin Bldg. 141-30 Samseong-. . . . . . . . . . . . . .  403,900 common shares                      2.5%
dong Kangnam-gu Seoul Korea

Terasource Venture Capital Fund 2
8FR Dongshin Bldg. 141-30 Samseong-. . . . . . . . . . . . . .  1,070,270 common shares                    6.7%
dong Kangnam-gu Seoul Korea

Terasource Venture Capital Fund 3
8FR Dongshin Bldg. 141-30 Samseong-. . . . . . . . . . . . . .  1,551,350 common shares                    9.7%
dong Kangnam-gu Seoul Korea

Terasource Venture Capital Fund 4
8FR Dongshin Bldg. 141-30 Samseong-. . . . . . . . . . . . . .  378,380 common shares                     2.37%
dong Kangnam-gu Seoul Korea


The Hong Group of Companies
including:
Serome Investment Co. Ltd. (as to
1,085,675shares), 151-7 Samseong-
Dong Kangnam-Gu Seoul Korea; . . . . . . . . . . . . . . . . .  3,325,900 common shares                  20.91%
Mok-Won Assets Management Co. Ltd
(as to 1,375,000 shares),2004 Ho, Anam
tower 702-10 Yuksam-dong Kangnam-
ku, Seoul, Korea;
Bio & Medical Research Co. Ltd. (as to
524,425 shares), 702-10 Yuksam-dong, Kangnam-ku, Seoul, Korea;
Ki-tae Hong (as to 127,800 shares) and
Hye-sook Lee (as to 213,000
shares).151-7 Samseong-Dong
Kangnam-Gu Seoul Korea

All Officers and Directors as a Group. . . . . . . . . . . . .  1,946,350 common shares                  12.24%

</TABLE>
B.  RELATED  PARTY  TRANSACTIONS

There  is no known relationship between any of the Directors and Officers of the
Company  with  major  clients  or provider of essential products and technology.
                                       33
<PAGE>

In  the  event  conflicts  do arise the Company will attempt to resolve any such
conflicts of interest in favor of the Company. The officers and directors of the
Company  are  accountable  to  the  Company and its shareholders as fiduciaries,
which  requires  that  such  officers  and  directors  exercise  good  faith and
integrity  in  handling  the  Company's  affairs.  A  shareholder may be able to
institute legal action on behalf of the Company on or behalf of that shareholder
and  all  other  similarly situated shareholders to recover damages or for other
relief  in cases of the resolution of conflicts in any manner prejudicial to the
Company.

ITEM  8.  FINANCIAL  INFORMATION
       --------------------------------
See  "Item  18-  Financial  Statements"

LEGAL  PROCEEDINGS

We  are  not  party  to  any  material  legal  proceedings.

DIVIDEND  POLICY

We  intend  to  retain any earnings for use in our business. We do not intend to
pay  dividends  on  our shares for the foreseeable future. Dividends, if any, on
the  outstanding  shares  are  recommended by the board of directors and must be
approved  at  our  annual  general  meeting  of  shareholders.  This  meeting is
generally  held in March each year, and the dividend in respect of the preceding
year  is  generally  paid  shortly  thereafter.  The declaration of dividends is
subject  to  the  discretion of the shareholders, and consequently, no assurance
can  be  given  to  the amount of dividends per share or that any such dividends
will  be  declared.  Future  cash  dividends,  if any, will also depend upon our
future  operations  and  earnings,  capital  requirements  and  surplus, general
financial  condition,  contractual  restrictions  and  other factors as may deem
relevant.  Loan agreements and contractual arrangements entered into by Meridian
may  also  restrict  distributions  of  dividends.

ITEM  9.  THE  OFFER  AND  LISTING
              ----------------------------------
Not  Applicable

ITEM  10.  ADDITIONAL  INFORMATION
             ----------------------------------
A.  SHARE  CAPITAL
The  Company  had 567,853 shares of common stock issued and outstanding prior to
the  Acquisition  of  By  George,  and  635,995  shares  issued  and outstanding
following the Acquisition. Effective February 15, 2001 the Company forward split
all  of  its  outstanding  common shares on the basis of 10 new shares of common
stock  of  the  Company  for  each  issued  share of common stock of the Company
resulting  in a total of 6,359,950 shares of common shares par value 500 Won per
share  in  the  capital  stock  of the Company being issued and outstanding (the
"First  Stock Split"). Effective March 19, 2001 the Company forward split all of
its  outstanding  common  shares on the basis of 5 new shares of common stock of
the  Company  for every 2 issued shares of common stock of the Company resulting
in  a total of 15,899,875 shares of common shares par value 200 Won per share in
the capital stock of the Company being issued and outstanding (the "Second Stock
Split")  (the First Stock Split and the Second Stock Split collectively referred
to  as  the  "Stock  Split").
                                       34
<PAGE>

B.  ARTICLES  OF  INCORPORATION
GENERAL
The Company is authorized to issue 50,000,000 shares of common stock, each share
of  common  stock  having  equal  rights  and  preferences,  including  voting
privileges.  The  Company  is not authorized to issue shares of preferred stock.
As  of  April  26,  2001 and taking into account the Merger, and the Stock Split
there  were 15,899,875 shares of the Company's stock issued and outstanding. The
shares of common stock of the Company constitute equity interests in the Company
entitling  each  shareholder  to  a pro rata share of cash distributions made to
shareholders,  including dividend payments.  The holders of the Company's common
stock  are  entitled  to  one vote for each share of record on all matters to be
voted  on  by  shareholders.  There  is  no  cumulative  voting  with respect to
election  of  directors of the Company or any other matter, with the result that
the  holders  of  more  than  50%  of the shares voted for the election of those
directors  can  elect all of the directors.  The holders of the Company's common
stock  are  entitled  to  receive  dividends  when,  as  and  if declared by the
Company's  Board  of Directors from funds legally available therefore; provided,
however,  that  cash dividends are at the sole discretion of the Company's Board
of  Directors.  In  the  event  of liquidation, dissolution or winding up of the
Company,  the  holders  of  common  stock  are entitled to share rateably in all
assets remaining available for distribution to them after payment of liabilities
of  the  Company  and  after provision has been made for each class of stock, if
any,  having  preference  in relation to the Company's common stock.  Holders of
the  shares  of  the  Company's  common stock have no conversion, pre-emptive or
other  subscription rights, and there are no redemption provisions applicable to
the  Company's  common  stock.  All  of  the outstanding shares of the Company's
common stock are duly authorized, validly issued, fully paid and non-assessable.

DIVIDENDS
Dividends  are distributed to shareholders in proportion to the number of shares
of  capital  stock  owned  by  each  shareholder  following  approval  by  the
shareholders  at  a  general meeting of shareholders.  Under the Commercial Code
and the Company's Articles of Incorporation, the Company will pay, to the extent
declared,  full annual dividends on newly issued shares. The Company may declare
dividends  annually  ("annual  dividends")  at  the  annual  general  meeting of
shareholders which is held within three months after the end of the fiscal year.
Shortly  after  the  annual  general meeting, the annual dividend is paid to the
shareholders  of  record  as  of  the  end of the preceding fiscal year.  Annual
dividends  may  be  distributed either in cash or in shares provided that shares
must be distributed at par value and dividends in shares may not exceed one-half
of  the annual dividend. Under the Commercial Code and the Company's Articles of
Incorporation,  the  Company  does have an obligation to pay any annual dividend
unclaimed  for  five  years  from the payment date. The Commercial Code provides
that  a  company shall not pay an annual dividend unless it has set aside in its
legal  reserve an amount equal to at least one-tenth of the cash portion of such
annual  dividend  or has a legal reserve of not less than one-half of its stated
capital.  The  Commercial  Code  also  provides that a company may pay an annual
dividend  out  of  the  excess  of its net assets over the sum of (i) its stated
capital,  (ii)  the  aggregate  amount  of its capital surplus reserve and legal
reserve  which  have  been  accumulated  up  to the end of the relevant dividend
period,  and  (iii)  the legal reserve to be set aside in respect of such annual
dividend.  Such reserves are not available for payment of cash dividends but may
be transferred to capital stock or used to reduce an accumulated deficit through
a  shareholder  action.
                                       35
<PAGE>

DISTRIBUTION  OF  FREE  SHARES
In  addition  to  dividends  in the form of shares to be paid out of retained or
current  earnings,  the  Commercial  Code  permits a company to distribute to is
shareholders  an amount transferred form the capital surplus or legal reserve to
stated  capital  in  the form of free shares. Such distribution must be made pro
rata.

PREEMPTIVE  RIGHTS  AND  ISSUANCE  OF  ADDITIONAL  SHARES
The  authorized  but  unissued  shares  may  be issued at such times and, unless
otherwise  provided  in  the  Commercial  Code,  upon such terms as the board of
directors of a company may determine.  The new shares must be offered on uniform
terms  to  all shareholders who have preemptive rights and who are listed on the
shareholders'  register  as  of the record date.  The Company's shareholders are
entitled  to  subscribe  for  any  newly  issued  shares  in proportion to their
existing shareholdings, provided that pursuant to the Articles of Incorporation,
new  share  that  are  (i)  issued  by  public  offering  in accordance with the
Securities  and  Exchange Law of Korea, (ii) represented by depositary receipts,
(iii)  issued  to foreigners in accordance with the Foreign Investment Promotion
Law  of  Korea within 33% of the total number of shares outstanding, (iv) issued
to  the  Company's  employee  stock ownership association up to 20% of the newly
issued  shares  (to the extent the total number of shares so subscribed and held
by  the  members of the employee stock ownership association does not exceed 20%
of the total number of shares), (v)issued outside Korea for listing on a foreign
stock  exchange  or  foreign securities market trading securities by means of an
electronic  or a quotation system, (vi) issued according to a stock option plan,
(vii)  issued to a domestic corporation having a strategic relationship with the
Company in connection with the Company's management or technology of up to 5% of
the  total  number  of  issued  and  outstanding  shares  after  such  issuance,
(viii)issued  as  consideration  for  the  acquisition of the stock or assets of
another  company  up  to  less  than  20%  of  the  total  number  of issued and
outstanding shares, or (ix) issued through general public offering in accordance
with  the  Securities  and  Exchange  Law  of  Korea may be issued pursuant to a
resolution  of  the  board  of  directors  to  persons  other  than  existing
shareholders.  Under  the  Commercial  Code,  a  company  may  vary,  without
shareholder approval, the terms of such pre-emptive rights for different classes
of  shares.  Public  notice  of  the  preemptive  rights  to  new shares and the
transferability  thereof  must  be  given not less than two weeks (excluding the
period  during  which  the shareholders' register is closed) prior to the record
date.  The  Company  will  notify the shareholders who are entitled to subscribe
for  newly  issued  shares  of  the deadline for subscription at least two weeks
prior  to  such  deadline. If a shareholder fails to subscribe on or before such
deadline,  such  shareholder's  preemptive  rights  will  lapse.  The  board  of
directors  may determine how to distribute shares in respect of which preemptive
rights  have  not  been  exercised  or  where  fractions of shares occur. If the
Company  adopts  the  New  Articles  of Incorporation newly issued shares can be
issued  pursuant  to  a  resolution  of the board of directors of the Company to
persons  other  than  existing  shareholders  of the Company under the following
cases (i) the Company offers new shares or allows underwriters to underwrite new
shares in accordance with Article 2 and Article 8 of the Securities Exchange Act
of  Korea;(ii)  the  Company  issues new shares through a public offering by the
resolution  of  the  Board  of Directors in accordance with Article 189-3 of the
Securities  Exchange  Act  of Korea; (iii) the Company issues new shares through
exercises  of  stock  options  in  accordance  with  Article 16-3 of the Venture
Company  Promotion  Special  Measures  Act of Korea; (iv) the Company issues new
shares  for  the  purpose  of  listing  or  registration  on  or  with a foreign
securities  exchange  or  market;(v)  the  Company issues new shares for foreign
direct  investments  in  accordance with the Foreign Investment Promotion Act as
needed  for  business  purposes, including but not limited to improvement of the
financial  structure;(vi)  the Company issues new shares to another company with
which  the Company forms or intends to form a business alliance relationship for
the  purpose  of technology transfer; or (vii) the Company issues new shares for
consideration  for the acquisition of the shares or assets of another company or
the  assets  of  a  person.
                                       36
<PAGE>

GENERAL  MEETING  OF  SHAREHOLDERS
Under  the Commercial Code, the ordinary general meeting of shareholders is held
within  three  months  after  the  end of each fiscal year and, subject to board
resolution  or  court approval, an extraordinary general meeting of shareholders
may  be  held as necessary or at the request of holders of an aggregate of 3% or
more  of  the  outstanding  shares of a company or at the request of a company's
statutory  auditor  or  audit  committee.  Under  the  Commercial  Code, written
notices setting forth the date, place and agenda of the meeting must be given to
shareholders  at  least  two  weeks  prior to the date of the general meeting of
shareholders.  Currently,  the  Company  uses  The Korean Economic Daily for the
purpose  of  providing  public  notices.  Shareholders  not on the shareholders'
register  as of the record date are not entitled to receive notice of the annual
general  meeting  of shareholders or attend or vote at such meeting.  The agenda
of the general meeting of shareholders is determined at the meeting of the board
of  directors.  In  addition, shareholders holding an aggregate of 3% or more of
the  outstanding  shares  may  propose  an  agenda  for  the  general meeting of
shareholders.  Such  proposal should be made in writing at least six weeks prior
to  the  meeting.  The  board of directors may decline such proposal if it is in
violation  of  the  relevant  laws  and regulations of the Company's Articles of
Incorporation.  The  general  meeting  of  shareholders is held at the Company's
headquarters  or,  if  necessary,  may  be  held anywhere in the vicinity of the
Company's  headquarters.

VOTING  RIGHTS
Holders  of the Company's shares are entitled to one vote for each share, except
that voting rights with respect to shares held by the Company and shares held by
a  corporate shareholder, more than one-tenth of whose outstanding capital stock
is  directly  or  indirectly  owned  by  the  Company,  may  not  be  exercised.
Cumulative voting is precluded in the Company's Articles of Incorporation. Under
the  Commercial  Code,  for  the  purpose  of  electing  the Company's statutory
auditors,  a  shareholder  holding  more  than  3%  of  the total shares may not
exercise  voting  rights with respect to such shares in excess of such 3% limit.
The  Commercial Code also provides that in order to amend the Company's Articles
of  Incorporation  (which is required for any change to the Company's authorized
share  capital) and for certain other instances, including removal of any of the
Company's  director and statutory auditor, dissolution, merger or consolidation,
transfer  of  the  whole  or  a  significant  part  of  the  Company's business,
acquisition  of  all  of  the  business  of any other company or issuance of new
shares  at  a  price  lower than their par value, an approval from holders of at
least  two-thirds  of  those  shares  present  or represented at such meeting is
required,  provided  that such super-majority also represents at least one-third
of  the  total  issued  and  outstanding  shares. A shareholder may exercise his
voting  by  proxy  given  to  any  person.  The  proxy  must  present a document
evidencing  the  power  of attorney prior to the start of the general meeting of
shareholders.

REGISTRATION  OF  SHAREHOLDERS  AND  RECORD  DATE
Pacific  Corporate  Trust  Company  of Vancouver BC Canada ("Pacific Corporate")
will  be  the Company's sole transfer agent. Pacific Corporate will maintain the
register  of  the Company's shareholders and register of transfers of registered
shares  traded.  For  the  purpose  of  determining  the
holders  of  the  Company's shares entitled to annual dividends, the register of
shareholders  is  closed  for  a  period following December 31 and ending on the
close  of  the  ordinary general shareholders' meeting for such fiscal year. The
record  date  for annual dividends is December 31.  Further, the Commercial Code
and  the  Company's  Articles of Incorporation permit the Company, upon at least
two  weeks'  public  notice,  to  set a record date and/or close the register of
shareholders entitled to certain rights pertaining to the Company's shares.  The
trading  of  the  Company's  shares  and the delivery of certificates in respect
thereof  may  continue  while  the  register  of  shareholders  is  closed.
                                       37
<PAGE>

ANNUAL  AND  PERIODIC  REPORTS
At  least  one  week  prior  to  the annual general meeting of shareholders, the
Company's  annual  report and audited non-consolidated financial statements must
be  made  available  for inspection at the Company's principal office and at all
branch  offices.  Copies  of  annual reports, the audited consolidated financial
statements  and  any  resolutions adopted at the general meeting of shareholders
will  be available to the Company's shareholders.  In addition, the Company will
dispatch  the copies of its financials and statements and business report to its
shareholders  at least two weeks prior to the date of the annual general meeting
of  shareholders.

TRANSFER  OF  SHARES
Under  the  Commercial  Code,  the transfer of shares is effected by delivery of
share  certificates  but,  in  order  to assert shareholders' rights against the
Company,  the  transferee  must  have  his  name  and  address registered on the
register  of  shareholders.  For this purpose, shareholders are required to file
their  name,  address and seal or specimen signature with the Company. Under the
regulations  of  the  Financial  Supervisory  Commission  of Korea, non-resident
shareholders  may  appoint  a  standing proxy and may not allow any person other
than  such  standing  proxy  to exercise rights regarding the acquired shares or
perform  any  task related thereto on his behalf, subject to certain exceptions.
Under  current  Korean  regulations,  securities  companies  and  banks in Korea
(including  licensed  branches  of  non-Korean  securities companies and banks),
investment  management  companies  in  Korea, internationally recognized foreign
custodians  and the Korean Securities Depository are authorized to act as agents
and  provide  related  services.

ACQUISITION  BY  THE  COMPANY  OF  SHARES
The  Company  generally may not acquire its own shares except in certain limited
circumstances,  including, without limitation, a reduction in capital. Under the
Commercial  Code, except in case of a reduction in capital, any of the Company's
own shares acquired by it must be sold or otherwise transferred to a third party
within  a  reasonable  time.

LIQUIDATION  RIGHTS
In  the  event  of  a  liquidation of the Company remaining after payment of all
debts,  liquidation expenses and taxes will be distributed among shareholders in
proportion  to  the  number  of  the  Company's  shares  held.

INSPECTION  OF  BOOKS  AND  RECORDS
Under  the Commercial Code, any individual shareholder or shareholders having at
least 3% of all outstanding shares (irrespective of voting or non-voting shares)
of  a  Korean  corporation  may  inspect  books  and records of the corporation.

C.  MATERIAL  CONTRACTS
None
                                       38
<PAGE>

D.  EXCHANGE  CONTROLS
GENERAL
The  Foreign  Exchange  Transaction Law of Korea and the Presidential Decree and
regulations  established  there  under  (collectively  the  "Foreign  Exchange
Transaction Laws") regulate investment in Korean securities by non-residents and
issuance  of  securities  outside  Korea  by Korean companies. Under the Foreign
Exchange Transaction Laws, non-residents may invest in Korean securities only to
the  extent  specifically  allowed  by  such  laws or otherwise permitted by the
Ministry  of  Finance and Economy. The Financial Supervisory Commission also has
adopted,  pursuant  to the delegated authority under the Securities and Exchange
Law  of  Korea,  regulations  that  restrict  investment by foreigners in Korean
securities  and  regulate  issuance  of  securities  outside  Korea  by  Korean
companies.  Under the Foreign Exchange Transaction Laws, if the Government deems
that certain emergency circumstances are likely to occur, it may require certain
investors  to  obtain prior approval for certain Capital Transactions as defined
in  the  Foreign Exchange Transaction Laws from the relevant Korean authority or
to deposit a certain portion of the investors' holdings in Korea. Such emergency
circumstances  include  sudden fluctuations in interest rates or exchange rates,
extreme  difficulty  in  stabilizing  the  balance  of payments or a substantial
disturbance  in  the  Korean  financial  and  capital  markets.

GOVERNMENT  REPORTING  REQUIREMENTS
In  order  for  the Company to issue its shares outside of Korea, the Company is
required  to  file  a prior report of such issuance with the Ministry of Finance
and  Economy.  No  further  approval  from  the  Government is necessary fort he
issuance  of the Company's shares. Furthermore, prior to making an investment to
10% or more of the outstanding shares of a Korean company, foreign investors are
generally required under the Foreign Investment Promotion Law to submit a report
to  a Korean bank pursuant to a delegation by the Ministry of Commerce, Industry
and  Energy.  Subsequent sale by such investor of the shares will also require a
prior  report  to  such  bank.

DIVIDEND  TO  BE  DECLARED  IN  WON
The  Company currently is not in the position to pay dividends on its shares for
the  foreseeable  future.  However, if the Company declares cash dividends, such
dividends  will  be  declared  in  Won.  In  order  for  the Company to pay such
dividends  outside  Korea,  such  dividends  will  be converted into Dollars and
remitted  to  the shareholders, subject to certain conditions.  The Company will
convert  dividend  amounts  in  foreign  currency and remit them to shareholders
abroad.  No  governmental  approval is required for foreign investors to receive
dividends.  However,  in  order  for  the  Company  to convert the Won amount in
foreign  currency  and  to  remit such amount abroad, relevant documents must be
submitted  to the foreign exchange bank to verify (i) that the amount being paid
conforms  to the amount required to be paid and (ii) whether all necessary legal
procedures  have  been  completed.

E.  TAXATION

KOREAN  TAXATION
The following is a summary of the principal Korean tax consequences to owners of
our  shares that are non-resident individuals or non-Korean corporations without
a  permanent establishment in Korea to which the relevant income is attributable
("non-resident  holders").  The  statements  regarding Korean tax laws set forth
below  are  based on the laws in force and as interpreted by the Korean taxation
authorities  as  of  the  date  hereof.  This  summary  is not exhaustive of all
possible  tax  consideration  which  may  apply  to  a  particular  investor and
prospective  investors  are  advised to satisfy themselves as to the overall tax
consequences  of  the  acquisition,  ownership  and  disposition  of our shares,
including  specifically  the  tax consequences under Korean law, the laws of the
jurisdiction  of  which  they are resident, and any tax treaty between Korea and
their  country  of  residence,  by  consulting  their  own  tax  advisors.
                                       39
<PAGE>

TAXATION  OF  DIVIDENDS
For  the  purposes of Korean taxation of distributions of profits either in cash
or shares made on the Company's shares, a non-resident holder will be treated as
the  owner  of  the  Company's  shares.  Dividends  paid  (whether in cash or in
shares)  to  a non-resident holder are generally subject to withholding tax at a
rate  of 27.5% or such lower rate as is applicable under a treaty between Korean
and  such  non-resident holder's country of tax residence.  Such tax is required
to  be  deducted  from  such  dividends  and  only the net amount is paid to the
non-resident  holder of the Company's shares. Under the U.S. - Korea Tax Treaty,
the  maximum  rate  of  withholding on dividends paid to United States residents
eligible for treaty benefits and beneficial owners of such dividend generally is
15%  (10%  if  the recipient of the dividends is a U.S. corporation and owned at
least  10%  of  the  outstanding  shares  of voting stock of the relevant Korean
company  during  any part of its taxable year which precedes the date of payment
of  the  dividend  and  during  the whole of its prior taxable year {if any} and
certain  other  conditions  are satisfied) which does not include withholding of
local  tax.  In  addition,  a  local surtax will be included in the withholding,
therefore  the  maximum  rate  of  withholding  is  generally  16.5%.  The
aforementioned  maximum  rate  on withholding of dividends does not apply if the
United  States resident has a permanent establishment in Korea and the shares to
which  the  dividends  are paid are connected with such permanent establishment.
Distribution  of free shares representing a transfer of certain capital reserves
or  asset  revaluation reserves into paid-in capital may be treated as dividends
subject  to  Korean  tax.  However, stock splits, if any, will not be treated as
dividends.

TAXATION  OF  CAPITAL  GAINS
A  non-resident  holder  will  be  subject  to  Korean taxation on capital gains
realized  on a sale of our shares unless the non-resident holder is eligible for
the  benefits  of  an  applicable  tax  treaty  exempting  such  capital tax. In
addition,  the  capital  gains  realized  from  the transfer of shares listed on
certain  foreign stock exchanges (including the Nasdaq National Market), insofar
as  the  transfer  is  completed  through such stock exchange, are exempted from
Korean income taxation by virtue of the Tax Exemption and Limitation Law.  Under
the  U.S.-Korea tax treaty, capital gains realized by holders that are residents
of  the United States eligible for treaty benefits will not be subject to Korean
taxation  upon  the  disposition  of our shares, with certain exceptions. In the
absence  of  any  applicable treaty or the exemption under the Tax Exemption and
Limitation  Law,  a  non-resident  holder  will  generally  be subject to Korean
taxation  on  capital  gains realized on a sale of our shares at the rate of the
lesser  of  27.5% of the gains or 11% of the gross sales proceeds until December
31,  2000  and the lesser of 26 7/8% of the gains and 10 3/4% of the gross sales
proceeds  thereafter.  See  "-Withholding  of  Taxes."

APPLICATION  OF  THE  U.S.-KOREA  TAX  TREATY
Under  the  U.S.-Korea  tax  treaty, a resident of the United States means (i) a
United  States  corporation  and, (ii) any other person (except a corporation or
any  entity  treated  under  United States law as a corporation) resident in the
United  States  for  purposes  of its tax, but in the case of a person acting as
partner  or  fiduciary only to the extent that the income derived by such person
is  subject  to  United  States  tax  as the income of a resident.  Further, the
reduced  Korean  withholding  tax  rate on dividends and capital gains under the
U.S.-Korea  Tax  Treaty  would not be available if (a) the U.S. resident holders
are  certain  investment  or  holding  companies or (b) the dividends or capital
gains  derived by residents of the United States from our shares are effectively
connected with the United States residents' permanent establishment in Korea or,
in  the  case  of capital gains derived by an individual, (i) such United States
resident  maintains  a  fixed base in Korea for a period aggregating 183 days or
more  during the taxable year and our shares are effectively connected with such
fixed  base or (ii) such United States resident is present in Korea for 183 days
or  more  during  the  taxable  year.
                                       40
<PAGE>

SECURITIES  TRANSACTION  TAX
Under the Securities Transaction Tax Law of Korea, securities transaction tax to
be  imposed  at  the  rate  of 0.5% (this rate may be reduced to 0.3%, including
other  surtax, if traded through the Korea Stock Exchange or KOSDAQ) will not be
imposed  on  the trading of shares through a foreign stock exchange on which the
shares are listed. Although there has been no established precedent on the point
of  whether  the  Nasdaq  National  Market will be included in the definition of
"foreign  stock  exchange" for the purpose of Securities Transaction Tax Law, it
is likely that the securities transaction tax will not be imposed on the trading
through the Nasdaq National Market. Further, securities transaction tax will not
be  applied  if  the  sale  is  executed between non-residents without permanent
establishments  in  Korea  and the non-resident holder (together with our shares
held  by  any  entity  which  has  a  certain  special  relationship  with  such
non-resident) did not own 10% or more of the total issued and outstanding shares
at  any  time  during  the  five years before the year within which the transfer
occurs and the non-resident holder did not sell such shares through a securities
broker  in  Korea.

INHERITANCE  TAX  AND  GIFT  TAX
Under Korean inheritance and gift tax laws, shares issued by Korean corporations
are deemed located in Korea irrespective of where they are physically located or
by  whom  they  are  owned.  Therefore,  Korean inheritance tax and gift tax are
imposed  with respect to our shares. The taxes are imposed currently at the rate
of  10%  to  50%, if the value of the relevant property is above a certain limit
and  vary  according  to the identity of the parties involved. At present, Korea
has  not  entered  into  any tax treaty with respect to inheritance or gift tax.

WITHHOLDING  OF  TAXES
Under  Korean tax law, holders of our shares in the United States will generally
be  subject  to  Korean  withholding  taxes  on  the  capital gains and dividend
payments  by  us  in  respect of those shares, unless exempted by a relevant tax
treaty or the Tax Exemption and Limitation Law. Failure to withhold Korean taxes
may  result in the imposition of the withholding tax itself and 10% penalty tax,
and,  if prosecuted, a criminal penalty of an imprisonment up to one year and/or
a  fine up to the tax amount, on the relevant withholding agent. We, as payer of
dividends,  will  act  as  withholding agent for the collection of Korean tax on
such  dividend  payment.  The capital gains realized from the transfer of shares
listed  and  traded  on the Nasdaq National Market are exempt from Korean income
taxation  by  virtue  of  the  Tax Exemption and Limitation Law.  Korean tax law
provides  that,  in  case  of  transfer  of Korean shares, the Korean securities
broker  broking  such  transfer,  or  if there is no such securities broker, the
purchaser  is  required  to  withhold  the  relevant Korean capital gains taxes.
                                       41
<PAGE>

UNITED  STATES  FEDERAL  INCOME  TAXATION
The  following  is  a  general  discussion of the material United States federal
income  tax  consequences of purchasing, owning, and disposing the common shares
if  you  are  a  U.S.  Holder  (as  defined below) and hold the common shares as
capital  assets  for  United States federal income tax purposes. This discussion
does  not  address  all of the tax consequences relating to the ownership of the
common  shares,  and  does not take into account U.S. Holders subject to special
rules  including:
-     dealers  in  securities  or  currencies;
-     financial  institutions;
-     tax-exempt  entities;
-     banks;
-     life  insurance  companies;
-     traders  in  securities  that  elect  to  mark-to-market their securities;
-     persons  that  hold common shares as a part of a straddle or a hedging, or
      conversion  transaction;
-     persons  liable  for  the  alternative  minimum  tax;
-     persons  that  actually  or  constructively owns 10% or more of our voting
      stock;  or
-     persons  whose  "functional  currency"  is  not  the  U.S.  dollar.
This  discussion  is based on the Internal Revenue Code of 1986, as amended, its
legislative  history,  final,  temporary,  and  proposed  Treasury  regulations,
published  rulings  and  court decisions, all as currently in effect. These laws
are  subject  to  change,  possibly  on  a  retroactive  basis.
You  are  a  "U.S.  Holder"  if  you  are:
-     a  citizen  or  resident  of  the  United  States;
-     a  corporation,  partnership  or  other  entity created or organized in or
under  the  laws  of  the  United  States  or any political subdivision thereof;
-     an  estate  the income of which is subject to United States federal income
      taxation  regardless  of  its  source;
-     a  trust:
-  if  a  United  States court can exercise primary supervision over the trust's
administration  and  one or more United States persons are authorized to control
all  substantial  decisions  of  the  trust;  or
-  that  has  elected  to  be treated as a United States person under applicable
Treasury  regulations.
This  discussion  addresses  only  United  States  federal  income  taxation.

F.     DIVIDENDS  AND  PAYING  AGENT
Not  Applicable

G.     STATEMENTS  BY  EXPERTS
Not  Applicable

H.     DOCUMENTS  ON  DISPLAY
Not  Applicable

I.     SUBSIDIARY  INFORMATION
See  Item  18.  Notes  to  Financial  Statements
                                       42
<PAGE>

ITEM  11.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK
---------------------------------------------------------------------------
MARKET  RISK  DISCLOSURE
Market  risk generally represents the risk that losses may occur in the value of
financial  instruments  as a result of movements in market rates of interest and
foreign  exchange.  The Company's primary market risk exposures are fluctuations
in  exchange rates, interest rates and equity prices.  The Company is exposed to
foreign  exchange  risk related to export sales denominated in foreign currency.
All of the Company's export sales are denominated in U.S. Dollars, regardless of
the  currencies  of  the  countries/regions in which the purchasers are located.
For  the year ended December 31, 2001, the Company had an aggregate of Won 689.4
million  in  Dollar-  denominated  export  sales,  accounting  for  10.1% of the
Company's total revenues.  The Company has no other significant foreign currency
denominated  revenue.  As  a  result,  changes  in  the  foreign  exchange  rate
between  the  Won and the Dollar may significantly affect the Company due to the
effect of such changes on the amount of payment, denominated in Won, the Company
receives  from  foreign purchasers on the export sales. As of December 31, 2001,
all  of  the Company's liabilities are denominated in Won. Therefore, if the Won
depreciates  against the Dollar by 10% and all other variables are held constant
from  their  levels  for the year ended December 31, 2001, the Company estimates
that  the  payment  receivable  from  its  overseas  customers  will decrease by
approximately  Won  68.9  million (US$53,301) in 2002. The Company is exposed to
interest  rate risk due to significant amounts of short-term and long-term debt.
Upward  fluctuations  in  interest  rates  increase the cost of additional debt.
However,  as  of December 31, 2001, the Company had no floating rate borrowings.
Currently  the  Company  does  not  use  any  derivatives  or  other  financial
instruments  to  mitigate  these  risks  discussed  above.

ITEM  12.  DESCRIPTION  OF  SECURITIES  OTHER  THAN  EQUITY  SECURITIES
-----------------------------------------------------------------------
Not  applicable.

PART  II

ITEM  13.  DEFAULTS,  DIVIDEND  ARREARAGES  AND  DELINQUENCIES
--------------------------------------------------------------
The  Company  is not currently in default, arrears or delinquent with respect to
any  of  its  debt  obligations  or  other  responsibilities.

ITEM 14. MATERIAL MODIFICATIONS TOTHE RIGHTS OFSECURITY HOLDERS AND USE OF
--------------------------------------------------------------------------
PROCEEDS
--------
Not  Applicable

ITEM  15.
---------
Not  Applicable

ITEM  16.
---------
Not  Applicable

ITEM  17.
---------
Not  Applicable

ITEM  18.  FINANCIAL  STATEMENTS
--------------------------------
                                       43
<PAGE>

                           INDEPENDENT AUDITORS' REPORT
                           ---------------------------


TO  THE  SHAREHOLDERS  AND  BOARD  OF  DIRECTORS
MERIDIAN  CO.,  LTD.

We  have  audited  the accompanying consolidated balance sheets of Meridian Co.,
Ltd.("the  Company")  and  its subsidiaries as of December 31, 2001 and 2000 and
the  related  consolidated  statements  of  operations, changes in shareholders'
equity  and  cash flows for each of the three years in the period ended December
31,  2001. These consolidated financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
consolidated  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Meridian Co., Ltd.
and  its  subsidiaries as of December 31, 2001 and 2000 and the results of their
operations  and their cash flows for each of the three years in the period ended
December  31,  2001, in conformity with accounting principles generally accepted
in  the  United  States  of  America.


                                   (Continued)
                     INDEPENDENT AUDITORS' REPORT, CONTINUED

As discussed in Note 26 to the consolidated financial statements, the operations
of  the  Company  have  been  significantly  affected,  and  will continue to be
affected for the foreseeable future, by the general unstable economic conditions
in  Korea  and  in  the  Asia Pacific region. It is currently uncertain what the
resulting  effect will be on the future operations and financial position of the
Company  and  its  subsidiaries.  The  ultimate  outcome  of  this matter cannot
presently  be  determined.  Accordingly, the accompanying consolidated financial
statements  do  not  include  any  adjustments  that  might  result  from  those
uncertainties.

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements,  the  Company's  negative  cash  flows from
operations,  cumulative  deficit and negative net assets raise substantial doubt
about  its  ability  to  continue as a going concern. The consolidated financial
statements  do not contain any adjustments that might result from the outcome of
this  uncertainty.

As discussed in Note 15 to the consolidated financial statements, certain errors
resulting in understatement of net loss for the year ended December 31, 1999 and
overstatement  of net loss for the year ended December 31, 2000, were discovered
by management of the Company during the current year. Accordingly, an adjustment
has  been  made  to  accumulated  deficit  as  of December 31, 1999 and 2000, to
correct  the  error.

                                       44
<PAGE>

SamDuk  Accounting  Corporation
                                Republic of Korea
April  27,  2002


12/F  SeoHeung  Bldg.
68  Keonji-Dong,  Jongro-Ku
Seoul,  Korea

                                       45
<PAGE>

<TABLE>
<CAPTION>

                                      MERIDIAN CO., LTD.
                                  CONSOLIDATED BALANCE SHEETS
                               As of December 31, 2001 and 2000
                                       (in U.S. dollars)


A S S E T S                                                             2001          2000
<S>                                                                 <C>           <C>

Current assets :
  Cash and cash equivalents (Note 2e). . . . . . . . . . . . . . .  $   105,216   $   398,625
  Short-term investments(Notes 2f, 2t, 9) . . . . . .  . . . . . .      841,476         2,647
  Accounts receivable - trade, net of allowance for doubtful
    accounts of $863,327 and $116,322, respectively (Notes 2g, 17)    1,759,821     2,708,607
  Short-term loans-net (Note 3). . . . . . . . . . . . . . . . . .       89,798       146,327
  Accounts receivable - other (Note 16). . . . . . . . . . . . . .       20,231       274,539
  Inventories (Notes 2h, 4). . . . . . . . . . . . . . . . . . . .    1,187,989     1,093,137
  Other current assets (Note 5). . . . . . . . . . . . . . . . . .      123,414       164,314

    Total current assets . . . . . . . . . . . . . . . . . . . . .    4,127,945     4,788,196

Investments and other assets
  Investments (Notes 2i, 2t, 6, 20). . . . . . . . . . . . . . . .       41,216       115,470
  Long-term and restricted bank deposits . . . . . . . . . . . . .       80,929       108,524
  Long-term loans-net (Notes 2g, 2k, 3). . . . . . . . . . . . . .      220,672       383,695
  Guaranty deposits. . . . . . . . . . . . . . . . . . . . . . . .       90,836        85,642

    Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      433,653       693,331

Property, plant and equipment - net (Notes 2l, 7)
  Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      706,591       732,524
  Buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . .      524,198       543,436
  Furniture and fixture. . . . . . . . . . . . . . . . . . . . . .      752,628       690,627
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      142,675       144,876
                                                                      2,126,092     2,111,463
                                                                    ------------
  Less accumulated depreciation. . . . . . . . . . . . . . . . . .     (670,797)     (583,068)

    Net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,455,295     1,528,395

Intangible assets
Goodwill (note20). . . . . . . . . . . . . . . . . . . . . . . . .            -        74,024
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          932         1,249

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          932        75,273

    TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . .  $ 6,017,825   $ 7,085,195


LIABILITIES AND SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . .         2001          2000

Current liabilities
  Accounts payable - trade (Note17). . . . . . . . . . . . . . . .  $   965,502   $ 1,215,433
  Short-term borrowings (Notes 8,17) . . . . . . . . . . . . . . .    1,587,573     1,491,875
  Accounts payable - other (Note17). . . . . . . . . . . . . . . .      636,342       487,582
  Current portion of long-term debt (Note 9) . . . . . . . . . . .      251,535       425,667
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      212,374       158,996

    Total current liabilities. . . . . . . . . . . . . . . . . . .    3,653,326     3,779,553

Long-term borrowings (Note 9). . . . . . . . . . . . . . . . . . .    1,094,057     1,181,381
Debentures-net(Notes 1, 10). . . . . . . . . . . . . . . . . . . .    1,136,448             -
Long-term accounts payable-other (Notes 11, 21). . . . . . . . . .       90,207       133,868
Retirement and severance indemnities-net (Note 12) . . . . . . . .      247,701       171,392

    Total liabilities. . . . . . . . . . . . . . . . . . . . . . .    6,221,739     5,266,194

Commitments and contingencies (Note 16)

Minority interest. . . . . . . . . . . . . . . . . . . . . . . . .        6,593        26,691

Shareholders' equity
  Common stock - par value $0.17 per share : issued and
    outstanding 15,899,875 shares and 14,196,325 shares
    as of December 31, 2001 and 2000 (Note 13) . . . . . . . . . .    3,011,984     2,741,364
  Additional paid-in capital (Note 13) . . . . . . . . . . . . . .      817,769     1,088,389
  Appropriation for business rationalization . . . . . . . . . . .      224,659       247,854
  Accumulated deficit (Note 15). . . . . . . . . . . . . . . . . .   (3,869,737)   (1,976,810)
  Accumulated other comprehensive loss (Notes 2c, 2s). . . . . . .     (395,182)     (308,487)

    Total shareholders' equity,. . . . . . . . . . . . . . . . . .     (210,507)    1,792,310

    TOTAL LIABILITIES AND
       SHAREHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . . .  $ 6,017,825   $ 7,085,195

<FN>
                  See accompanying Notes to Consolidated Financial Statements
</TABLE>
                                       46
<PAGE>

<TABLE>
<CAPTION>

                                              MERIDIAN CO., LTD.
                         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                             For the years ended December 31, 2001, 2000 and 1999
                                              (in U.S. dollars)


                                                                        2001           2000          1999
<S>                                                                 <C>            <C>           <C>
Sales (Notes 2o,23)
  Product. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  5,289,561   $ 5,176,544   $ 5,212,887
  Services - R&D performed for third parties . . . . . . . . . . .             -             -        17,609
  Grant on government-sponsored R&D. . . . . . . . . . . . . . . .             -       127,496       136,595
                                                                       5,289,561     5,304,040     5,367,091

Cost of sales
  Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . .     2,337,170     2,462,663     3,263,380
  Inventory write-down due to decline in market value (Note 2h). .       140,936       516,312       725,584
                                                                       2,478,106     2,978,975     3,988,964

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,811,455     2,325,065     1,378,127

Selling, general and administrative expenses
  Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . .        94,664        98,275        80,833
  Bad debt expense . . . . . . . . . . . . . . . . . . . . . . . .       791,118       109,683         8,259
  Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . .       518,484       301,789       205,977
  Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .       103,026       135,051        31,130
  Employee benefit . . . . . . . . . . . . . . . . . . . . . . . .       163,351       184,338       147,390
  Entertainment. . . . . . . . . . . . . . . . . . . . . . . . . .       135,333       155,958        59,704
  Overseas market development. . . . . . . . . . . . . . . . . . .        96,664       204,198        78,987
  Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        65,618       100,686        69,738
  Research and development . . . . . . . . . . . . . . . . . . . .       555,865       540,671       855,151
  Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .       854,137       960,253       545,005
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       617,890       548,074       313,840
                                                                       3,996,150     3,338,976     2,396,014

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . .    (1,184,695)   (1,013,911)   (1,017,887)

Other income
  Interest income. . . . . . . . . . . . . . . . . . . . . . . . .        60,520        84,883        17,673
  Gain on disposal  of investment securities (Note 6). . . . . . .        41,372       230,302     1,146,009
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        87,033        85,288        52,702
                                                                         188,925       400,473     1,216,384
Other expenses
  Interest expense . . . . . . . . . . . . . . . . . . . . . . . .       360,239       322,271       244,364
  Non-trade bad debt expense . . . . . . . . . . . . . . . . . . .       460,889        92,832       177,810
  Write off of goodwill. . . . . . . . . . . . . . . . . . . . . .        30,020             -             -
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        78,294        30,774        19,049
                                                                         929,422       445,877       441,223

Minority interest in net loss of consolidated affiliates . . . . .        19,302       367,789        14,074

Loss before provision for income taxes . . . . . . . . . . . . . .    (1,905,910)     (691,526)     (228,652)

  Income tax expense (Notes 2r, 18). . . . . . . . . . . . . . . .             -        11,551       130,037

Loss before extraordinary items. . . . . . . . . . . . . . . . . .    (1,905,910)     (703,077)     (358,689)

Extraordinary items
  Loss on bankruptcy of a subsidiary . . . . . . . . . . . . . . .       (10,212)            -             -
  Gain on exemption of debt
    - less applicable taxes of  $1,185 in 2000 and $2,549 in 1999.             -         6,391        11,932
  Loss on repayment of debt
    - less applicable taxes of  $4,141 in 1999 . . . . . . . . . .             -             -       (25,850)
                                                                         (10,212)        6,391       (13,918)
                                                                                                 ------------

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (1,916,122)     (696,686)     (372,607)

Other comprehensive loss
  Foreign currency translation gain (loss) . . . . . . . . . . . .       (43,252)     (218,967)       81,290
  Unrealized holding gain. . . . . . . . . . . . . . . . . . . . .             -        60,459             -
                                                                         (43,252)     (158,508)       81,290

Comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . .   ($1,959,374)    ($855,194)    ($291,317)

Weighted average number of common shares . . . . . . . . . . . . .    15,703,850    14,071,325     8,371,325

Basic and diluted loss per common share (Note 2p)
  Loss before extraordinary items. . . . . . . . . . . . . . . . .        ($0.12)       ($0.05)       ($0.04)
  Extraordinary items. . . . . . . . . . . . . . . . . . . . . . .             -             -             -
    Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . .        ($0.12)       ($0.05)       ($0.04)
------------------------------------------------------------------
<FN>
                         See accompanying Notes to Consolidated Financial Statements
</TABLE>
                                       47
<PAGE>

<TABLE>
<CAPTION>

                                               MERIDIAN CO.,LTD.
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             For the years ended December 31, 2001, 2000 and 1999
                                              ( in U.S. dollars )


                                                                         2001           2000          1999
<S>                                                                  <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES :
  Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . .   ($1,916,122)    ($696,686)    ($372,607)
  Add (deduct) items not using (providing) cash
    Depreciation and amortization . . . . . . . . . . . . . . . . .       203,737       261,245       135,024
    Provision for severance indemnities . . . . . . . . . . . . . .       120,972       113,777        77,294
    Provision for doubtful accounts . . . . . . . . . . . . . . . .     1,252,007       202,515       186,069
    Inventory write-down due to decline in market value . . . . . .       140,936       516,312       725,584
    Gain on sale of investment securities . . . . . . . . . . . . .       (41,372)     (230,302)   (1,146,009)
    Decrease (increase) in accounts receivable - trade. . . . . . .       100,475    (1,174,177)     (877,353)
    Decrease (increase) in accounts receivable - other. . . . . . .       191,914      (136,847)       70,289
    Decrease (increase) in inventory. . . . . . . . . . . . . . . .      (387,744)   (1,223,384)     (313,901)
    Decrease (increase) in other current assets . . . . . . . . . .        35,629      (138,336)       28,395
    Increase (decrease) in accounts payable - trade . . . . . . . .      (210,125)      684,795       568,270
    Increase (decrease) in accounts payable - other . . . . . . . .       168,607       297,968      (536,913)
    Increase (decrease) in other current liabilities. . . . . . . .        56,301      (229,226)     (129,853)
    Increase in long-term accounts payable - other. . . . . . . . .       (39,528)       24,269       119,459
    Retirement and severance payment. . . . . . . . . . . . . . . .       (31,961)      (47,415)      (92,764)
    Minority interest in net loss of consolidated affiliates. . . .       (19,302)     (367,789)      (14,074)
    Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        28,179       (84,181)       26,021
       Sub-total. . . . . . . . . . . . . . . . . . . . . . . . . .     1,568,725    (1,530,776)   (1,174,462)
                                                                     -------------

                                                                         (347,397)   (2,227,462)   (1,547,069)

CASH FLOWS FROM INVESTING ACTIVITIES :
  Decrease in short-term loans. . . . . . . . . . . . . . . . . . .        37,023        78,947     1,692,224
  Proceeds from sale of investment securities . . . . . . . . . . .        74,137       342,532     1,383,582
  Decrease in long-term and restricted bank deposits. . . . . . . .        24,123        60,000       290,981
  Decrease in long-term loans . . . . . . . . . . . . . . . . . . .             -        13,158        14,838
  Increase in short-term investments. . . . . . . . . . . . . . . .      (852,273)            -             -
  Increase in short-term loans. . . . . . . . . . . . . . . . . . .      (201,781)     (234,843)   (1,741,712)
  Acquisition of investment securities. . . . . . . . . . . . . . .       (59,501)       (4,386)     (107,394)
  Increase in long-term and restricted bank deposits. . . . . . . .             -      (106,588)       (8,416)
  Increase in long-term loans . . . . . . . . . . . . . . . . . . .             -             -      (597,532)
  Acquisition of property, plant and equipment. . . . . . . . . . .       (64,282)     (706,245)      (58,085)
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        12,581       (78,237)      454,185

                                                                       (1,029,973)     (635,662)    1,322,671

CASH FLOWS FROM FINANCING ACTIVITIES :
  Increase in short-term borrowings . . . . . . . . . . . . . . . .     1,360,659     1,240,833     1,167,862
  Increase in long-term borrowings. . . . . . . . . . . . . . . . .       209,242       342,105       193,567
  Proceeds from issuance of debentures. . . . . . . . . . . . . . .     1,150,646             -             -
  Contribution from minority interest of consolidated subsidiaries.             -       315,965        49,399
  Proceeds from issuance of common stock. . . . . . . . . . . . . .             -       669,344       825,764
  Repayment of short-term borrowings. . . . . . . . . . . . . . . .    (1,209,833)      (29,686)   (1,152,172)
  Repayment of current portion of long-term debt. . . . . . . . . .      (416,991)      (43,860)      (31,560)
  Repayment of long-term borrowings . . . . . . . . . . . . . . . .             -      (616,552)       (9,258)

                                                                        1,093,723     1,878,149     1,043,602

NET INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . . . .      (283,647)     (984,975)      819,204

EFFECT OF EXCHANGE RATE ON CASH . . . . . . . . . . . . . . . . . .        (9,762)      (44,490)       86,961

CASH AT BEGINNING OF THE PERIOD . . . . . . . . . . . . . . . . . .       398,625     1,428,090       521,925

CASH AT END OF THE PERIOD . . . . . . . . . . . . . . . . . . . . .  $    105,216   $   398,625   $ 1,428,090

  Cash and cash equivalents are comprised of :
    Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     10,682   $    15,070   $     1,102
    Term deposits . . . . . . . . . . . . . . . . . . . . . . . . .        94,534       383,555     1,426,988
                                                                     $    105,216   $   398,625   $ 1,428,090
</TABLE>

                                       48
<PAGE>

<TABLE>
<CAPTION>


                                                        MERIDIAN CO., LTD
                                                       CONSOLIDATED STATEMENTS
                                               OF CHANGES IN SHAREHOLDERS' EQUITY
                                      For the years ended December 31, 2001, 2000 and 1999
                                                        (in U.S. dollars)
                                                                                               Accumulated
                            Common Stock Issued        Additional     Appropriation                     Other          Accumulated
                                                          Paid-in     for Business     Accumulated   Comprehensive  Shareholders'
                                  Shares       Amount      Capital    Rationalization  (Deficit)     Income(Loss)   Equity Deficit)

<S>                             <C>          <C>           <C>          <C>                <C>           <C>          <C>
  Balance at January 1, 1999 .   7,100,000   $ 1,546,154               $   95,315      ($754,978)      ($231,268)    $  655,223

  Issuance to sell
  new shares . . . . . . . . .   5,000,000       825,764                                                                825,764
  Conversion of
    convertible bonds. . . . .   1,346,325       235,577   $  552,914                                                   788,491
  Net loss . . . . . . . . . .                                                           (372,607)                     (372,607)
  Other comprehensive
  income (loss):
    Foreign currency
      translation gain . . . .                                                                             81,290        81,290
  Reclassification
  adjustment pursuant
       to legal appropriation
  requirement. . . . . . . . .                                              156,856      (156,856)
                              -----------     -----------   ------------   ---------   ------------   -----------  -------------

  Balance at December 31, 1999  13,446,325     2,607,495      552,914       252,171     (1,284,441)     (149,978)     1,978,161
  Issuance of sell
  new shares . . . . . . . . .     750,000       133,869      535,475                                                   669,344
  Net loss . . . . . . . . . .                                                            (696,686)                    (696,686)
  Other comprehensive
  income (loss):
      Foreign currency
  translation loss . . . . . .                                                                           (218,968)     (218,968)
      Unrealized holding gain.                                                                             60,459        60,459
  Reclassification adjustment
  pursuant
       to legal appropriation
  requirement. . . . . . . . .                                               (4,317)        4,317
                              -----------     -----------   ------------   ---------   ------------   -----------  -------------
  Balance at December 31, 2000  14,196,325     2,741,364    1,088,389        247,854    (1,976,810)      (308,487)     1,792,310
  Issuance of new shares . . .   1,703,550       270,620     (270,620)
  Net loss . . . . . . . . . .                                                          (1,916,122)                   (1,916,122)
  Other comprehensive
   income (loss):
    Foreign currency
      translation loss . . . .                                                                             (26,236)      (26,236)
    Reclassification
     adjustment for gains
      included in net income .                                                                             (60,459)      (60,459)
    Reclassification
      adjustment pursuant
      to legal appropriation
      requirement. . . . . . .                                                (23,195)       23,195
                              -----------     -----------   ------------   ---------   ------------   -----------  -------------
  Balance at
  December 31, 2001. . . . . .  15,899,875   $ 3,011,984     $817,769         $224,659   ($3,869,737)   ($395,182)  ($210,507)
                              -----------     -----------   ------------   ---------   ------------   -----------  -------------

<FN>


                                     See accompanying Notes to Consolidated Financial Statements

</TABLE>


                                       49
<PAGE>


                               MERIDIAN CO., LTD.
                               ------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
              For the years ended December 31, 2001, 2000 and 1999
              ----------------------------------------------------


1.  ORGANIZATION  AND  BASIS  OF  ACCOUNTING
--------------------------------------------

Meridian  Co., Ltd. (the "Company") was incorporated on April 19, 1994 under the
--------------------------------------------------------------------------------
laws  of  the  Republic  of  Korea  ("Korea")  and  is  currently engaged in the
--------------------------------------------------------------------------------
manufacture  of alternative medicine equipment for sale in domestic and overseas
--------------------------------------------------------------------------------
markets.
--------

The  company  has negative cash flow from operations, an accumulated deficit and
--------------------------------------------------------------------------------
negative  net  assets. The ability of the Company to continue as a going concern
--------------------------------------------------------------------------------
is  dependent  upon its ability to obtain adequate financing to reach profitable
--------------------------------------------------------------------------------
levels  of  operations. It is not possible to estimate whether financing efforts
--------------------------------------------------------------------------------
will  be  successful  or  if  the  Company  will  attain  profitable  levels  of
--------------------------------------------------------------------------------
operations.  For  the purpose of obtaining adequate operating funds, the Company
--------------------------------------------------------------------------------
issued non-guaranteed debentures of Won 1,500 million ($1,136,448 - net of issue
--------------------------------------------------------------------------------
cost  $5,539  by  the exchange rate at balance sheet date) during the year ended
--------------------------------------------------------------------------------
December  31,  2001  and  is planning a direct public offering of common shares.
--------------------------------------------------------------------------------


2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-----------------------------------------------------

Significant  accounting  policies  followed by the Company in the preparation of
--------------------------------------------------------------------------------
the  accompanying  consolidated  financial statements are summarized as follows:
--------------------------------------------------------------------------------

a.  Basis  of  Financial  Statements
------------------------------------

The  Company  and  its subsidiaries maintain their statutory books of account in
accordance with accounting principles generally accepted in Korea. However these
consolidated  financial  statements have been prepared in a manner, and reflects
the  adjustments  which  management  believes  are  necessary,  to  conform  to
accounting  principles generally accepted in the United States of America ("U.S.
GAAP").

The  consolidated  financial  statements include the accounts of the Company and
its  subsidiaries.  Significant inter-company accounts and transaction have been
eliminated  on  consolidation.

The  Company  consolidates  companies  of which it owns, directly or indirectly,
more than 50% of the outstanding voting shares and/or over which it can and does
exercise  control.
                                       50
<PAGE>

b.  Changes  in  Reporting  Entity
    ------------------------------

The  following  table  shows the Company's ownership percentages and acquisition
dates  of  its  consolidated  subsidiaries  as  of  December  31,  2000.

<TABLE>
<CAPTION>

                                     Date of          Percentage
                                  acquisition          ownership
                        ----------------  ----------
Subsidiaries                                                      Primary business
                                                                   ----------------
<S>                     <C>               <C>         <C>

Pusanmeridian Co., Ltd         2000.3. 3      54.5 %         Distributing medical equip.
Meridian Asia Co., Ltd         1999.4.12        51.0         Distributing medical equip
Chuneesoft Co., Ltd. .         2000.3.29        50.0         Software service
True World Co., Ltd. .         2000.1.30        47.9         Distributing medical equip
</TABLE>

Effective  January 1, 2002, the Company will change from consolidation to equity
accounting  for  its  interest in Meridian Asia, True World, and ChuneeSoft. The
details  of  transactions  and events, which caused the changes in the reporting
entity,  are  as  follows:

(a)     In  December  2001,  the  Company has disposed of 2% of its original 51%
shareholding  in  Meridian  Asia  Co.,  Ltd  ("MACL"),  resulting in a 49% share
ownership  in  MACL.

(b)      In  December  2001, three members of management of the Company disposed
of  their  1%  share  ownership  in  True world (3% in total).  As a result, the
Company  was no longer able to exercise the significant control over True World.

(c)     ChuneeSoft  went bankrupt and ceased its operation during December 2001.

All  transactions  and events described above occurred in December 2001, and the
management of the Company believes that the effects on the financial statements,
which  would  have been reported if equity methods were applied from the date of
changes  to  the  end  of the fiscal year, are not material as a related loss on
equity  investments  for the intervening period to year end was $464. Therefore,
all  periods  presented  for  the  years ended December 31, 2001, 2000, and 1999
continue  to  account  for  MACL,  True  World, and ChuneeSoft on a consolidated
basis.

On November 10, 2001, the Company acquired 45% of the share ownership in Beijing
Meridian  Medicals  Equipment Co., Ltd. for $59,981(by the spot exchange rate of
Won 1,283 to $1) in cash. Investments in Beijing Meridian has been accounted for
by  using  the  equity  method.(Refer  to  Note  6  and  20)

c.  Translation  of  Financial  Statements
    --------------------------------------

  The  accompanying  consolidated financial statements have been translated into
U.S.  dollars  in  accordance with SFAS 52. As such, assets and liabilities have
been  translated into U.S. dollars at the exchange rate in effect on the balance
sheet  dates.  Shareholders'  equity  figures  have been converted at historical
exchange  rates.  Elements  of  income  have  been  translated using the average
exchange rate in effect during the period the transactions occurred. The gain or
loss  from foreign currency translation forms a component of other comprehensive
income  or  loss  of  each period presented and a component of other accumulated
comprehensive  income  or  loss.
                                       51
<PAGE>

The functional currency of the Company and its subsidiary is the Korean won ("W"
or  "won").  The  primary  economic environment in which the Company operates is
Korea.  The  Korean  economy  was not highly inflationary during the periods for
which  consolidated  financial  statements  are  presented.

d.  Estimates  and  Assumptions
         ---------------------------

The  preparation  of  financial statements in accordance with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities  and disclosure 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

e.  Cash  and  Cash  Equivalents
         ----------------------------

Cash  and cash equivalents consist of cash on hand, deposits in banks and highly
liquid  investments  with  an  original  maturity  of  three  months  or  less

f.  Short-term  Investments
         -----------------------

Short-term investments consist of marketable securities and short-term financial
instruments  which  have  an  original  maturity  exceeding three months and are
readily convertible into cash within one year. If the Company has debt or equity
securities  (with  readily  determinable fair value) that it intends to actively
and  frequently  buy  and  sell  for  short-term  profits,  those securities are
considered  "trading  securities"  and  classified  as  short-term  investments.
Unrealized  holding gains and losses related to these securities are included in
income  from  continuing  operations.

If  the  Company  has debt or equity securities with a readily determinable fair
value  that  it  intends  to  hold  on  a  long-term  basis,  but are considered
"available  for  sale",  those  securities  are  classified  as  investments  in
non-current  assets.  Unrealized  holding  gains  and  losses  related  to these
securities  are  excluded  from  current  earnings  and  are  included  in other
comprehensive  income  (loss)  for  the  period.

The  Company  uses  the  average  cost method to account for trading securities.

g.  Allowance  for  Doubtful  Accounts
    ----------------------------------

     Amounts  receivable  are  assessed  for  impairment  on a regular, periodic
basis.  When  circumstances  indicate  collection  of  an  amount  receivable is
doubtful, an allowance and a charge against earnings are recognized immediately.
When  circumstances  indicate  a  doubtful  amount  receivable is unlikely to be
realized,  the  outstanding amount and the associated allowance are written off.
                                       52
<PAGE>

h.  Inventories
    -----------

     Inventories  are stated at the lower of cost and net realizable value, with
cost  determined  based  on the weighted average method and net realizable value
determined  based  on  the estimate selling price, less estimated completion and
selling  costs.  The  Company  recorded  a  loss  from  valuation of inventories
totaling  $140,936, $516,312 and $725,584 for the years ended December 31, 2001,
2000  and 1999, respectively. These write-downs establish new cost basis for the
written  down  inventory  items  and  may  not  be  reversed  in  the  future.

i.  Investments
    -----------

Investments  in  marketable  equity  securities  are  stated at fair value, with
unrealized  gains  and  losses  excluded from current operations and reported in
other  comprehensive  income  (loss)  as  a  separate component of shareholders'
equity.

Investments  in  business  entities over which the Company exercises significant
influence  are  accounted  for using the equity method. Under the equity method,
the  original  investment  is  recorded  at cost and is adjusted annually by the
Company's  equity in earnings or losses of the investee. Dividends paid, if any,
reduce  the investment. Unrealized gains and losses on intercompany transactions
are  eliminated.  Differentials  between the cost of the investment and the fair
value  of the net assets of the investee at the date of acquisition are recorded
as  part  of  investments  and  are amortized over five years on a straight-line
basis.

Investments  in  equity  securities  of  non-public  companies  are  carried  at
acquisition cost less provision for impairment in value, if any. If a decline in
net  book value of an investment appears to be of other than temporary nature, a
provision  for impairment in value is recognized and is charged against earnings
of  the  current  period.  The Company recorded loss on impairment of investment
amounting  to  $27,061 for the year ended December 31, 2001. The Company did not
recognize  a  loss  on  impairment  of  investment  in  2000  and  1999.

The  Company  uses  the  average  cost  method  to  account for the investments.

                                       53
<PAGE>

j.  Long-lived  Assets
    ------------------

When  events  and  circumstances  warrant  a  review,  the Company evaluates the
carrying  value  of  its  long-lived  assets. The carrying value of a long-lived
asset  is  considered  impaired when the anticipated undiscounted cash flow from
use  is  less  than  its  carrying value. In that event, an impairment charge is
recognized based on the amount by which the carrying value exceeds the estimated
fair  value. No such impairment charges have been identified by the Company, but
for  the  impairment  of  investment  referred  in  Note  2(i).

k.  Valuation  of  Receivables  and  Payables  at  Present  Value
    -------------------------------------------------------------

Receivables  and payables arising from long-term cash loans/borrowings and other
similar  transactions are stated at present value if the difference between book
value  and  present value is material. The difference between the book value and
present  value  of amounts receivable or payable is deducted from the book value
of the related receivable or payable. The present value discount is amortized to
interest  income  (expense)  using  the  effective  interest  rate  method.

In  determining  the  discount  rate,  the  Company  individually  assesses  the
creditworthiness  of  the  counterparty  based  upon  the credit standing of the
issuer,  restrictive  covenants,  the  collateral,  payment  and  other  terms
pertaining  to  the  debt,  and  the  tax  consequences  to  the  Company.

l.  Property,  Plant  and  Equipment
    --------------------------------

Property,  plant  and equipment is stated at cost less accumulated depreciation.
Routine maintenance and repairs are expensed as incurred. Expenditures resulting
in  enhancement  of  the value or extension of the useful life of the facilities
involved  are  capitalized.

Depreciation  is  computed  using  the  declining  balance  method  (except  for
buildings  and  structures which are depreciated using the straight-line method)
over  the  estimated  useful  lives  (4  to  40  years)  of  the related assets.

For the years ended December 31, 2001, 2000 and 1999, the Company recorded total
depreciation  of  $174,194,  $227,727  and  $110,386,  respectively.

m.  Goodwill  and  Intangible Assets
    -------------------------------

Goodwill  is amortized on a straight-line basis over 5 years. Intangible assets,
which  consist  of  intellectual  proprietary  rights,  are  stated at cost less
accumulated amortization computed using the straight-line method over the useful
lives(5  to  10  years).
                                       54
<PAGE>

n.  Stock  Based  Compensation
    --------------------------

The Company applies the intrinsic value-based method of accounting prescribed by
APB  Opinion  No.  25,  "Accounting  for Stock issued to Employees", and related
interpretations,  in  accounting  for  its  fixed  stock  option  plan. As such,
compensation  expense would be recorded on the date of grant only if the current
market  price  of  the  underlying  stock exceeded the exercise price. SFAS 123,
"Accounting for Stock-Based Compensation", established accounting and disclosure
requirements  using  a  fair  value-based  method  of accounting for stock-based
employee  compensation  plans.  As  allowed  by SFAS 123, the Company elected to
apply  the  intrinsic  value-based method of accounting described above, and has
adopted  the  disclosure  requirement  of  SFAS  123.

o.  Revenue  Recognition
    --------------------

Product and merchandise revenues are recognized upon shipment or delivery to the
purchaser  and  when all significant contractual obligations have been satisfied
and collection is reasonably assured. Revenues from software sales contracts are
recognized  upon  delivery  and  when  collection  is  reasonably  assured.  The
Company's  software  sales contract does not provide for significant production,
modification or customization work to the software after sale.  Service fees are
recognized  when  delivered  in  accordance  with  all  terms  and conditions of
customer  contracts,  upon  acceptance  by  the customer, and when collection is
reasonably  assured.  The  Company's  contracts  generally provide for return of
products  within  three  months  from  the  date  of  sales.  The Company's past
experience  indicates  that returns are negligible, less than 1% of total sales,
and  accordingly the Company does not provide an allowance for returned product.

p.  Loss Per Common Share
    ------------------

Basic  and  diluted  loss per common share is calculated by dividing net loss by
the  weighted  average  number of common shares outstanding during the year , in
accordance  with  SFAS 128. Stock options granted on March 19, 2001 and February
23,  2000  have  not  been included in the calculation of loss per share for the
year  ended  December  31,  2001  and  2000  as  their  effect is anti-dilutive.

q.  Dividends
    ---------

Dividends,  if  any,  would  be  declared  in  Won.
                                       55
<PAGE>

r.  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
assets  and  liabilities and their respective tax bases and operating loss carry
forwards.  Future  tax  assets  are  not  recognized unless their realization is
considered  more  likely  than  not.

s.  Other  Comprehensive  Income
   ----------------------------

The  Company applies the provisions of SFAS 130 "Reporting Comprehensive Income"
with  respect  to  the  reporting  and  display  of comprehensive income and its
components  for each period presented. Other comprehensive income(loss) consists
of  foreign currency translation gain(loss) and unrealized holding gain(loss) as
follows  :

(a)  Foreign  Currency  Translation  Gains  and  Losses

These  translation  gains  and losses are the result of converting the financial
statements  in  accordance  with  US  GAAP;  therefore, there is no tax on these
items.  The  translation  gains  and  losses are not included in determining net
income.  Therefore,  there  is  no  reclassification  adjustment for the period.

(b)  Unrealized  Holding  Gains

The  Korean  government  does  not  impose  taxes  on  unrealized holding gains;
therefore,  before  and  after  tax  amount  of  this item remains the same. The
Company  included  realized  gain  of  $60,459  on sale of the securities in net
income  for  the  year  ended  December  31, 2001. Therefore, the same amount of
reclassification  adjustment  is  recorded  for  the  period.

t.  Fair  Value  and  Financial  Instruments
   ----------------------------------------

The  following  methods  and assumptions were used to estimate the fair value of
each  class  of financial instruments for which it is practical to estimate that
value.

(i)  Cash  and  cash equivalents, accounts receivable(trade and other), accounts
payable(trade  and  other),  short-term  loans  and  short-term borrowings : The
carrying  amount  approximates  fair  value  due  to the short maturity of those
instruments.

(ii)  Marketable  securities  and  investments : The fair value of market-traded
investments  are  estimated  based  on quoted market prices for those or similar
investments.  For other investments for which there are no quoted market prices,
a  reasonable  estimate  of  fair  value  could  not  be  made without incurring
excessive  costs.
                                       56
<PAGE>

(iii)  Long-term  bank  deposits  and long-term borrowings : The carrying amount
approximates  fair value based on a review of interest rates currently available
for  similar  instruments.

(iv)  Long-term  loans  : The carrying amount approximates fair value because it
was
calculated  by  discounting  the  future cash flows using the effective interest
rate  of  the  Company.

     (v)  Long-term payables : The fair value of long-term payables is estimated
by  discounting
the  future  cash  flows  using the current interest rate of time deposit with a
maturity  of  one  year.

u.  Research  and  Development
    --------------------------

Research  and  development  expenditures  are  charged  to  income  as incurred.

3.     SHORT-TERM  AND  LONG-TERM  LOANS

Short-term  and  long-term loans as of December 31, 2001 and 2000 are as follows
(in  U.S.  dollars):
<TABLE>
<CAPTION>



                                  Final      Annual         December 31,
..                                Maturity   Interest
..                                  Year      Rate(%)     2001         2000

<S>                              <C>       <C>         <C>             <C>       <C>
Short-term loans

Meridian Oriental Clinic        2002            -      $158,333     $159,763
Sales agent                     2002         11.0%      160,100       33,544
Other                           2002                     37,081        7,069
                                                      ---------     --------
                                                        355,514      200,376

Allowance for doubtful accounts                        (265,716)     (54,049)
                                                      ----------     -------
Net                                                    $  89,798    $146,327
                                                       ---------    --------
                                       59
                                       57
<PAGE>

Long-term loans
  Meridian Oriental Clinic      2006               -   $519,505     $538,571
  Other                         2003                      7,614        7,893
                                                   --------------   --------
                                                        527,119      546,464
                                                     ----------      --------
Allowance for doubtful accounts                        (213,059)     (29,479)
  Present value discounts                               (93,388)    (133,290)

  Net                                                  $ 220,672   $ 383,695
                                                     -----------    --------
</TABLE>

In calculating the present value of long-term loans, the Company applied 9%, the
weighted  average  interest  rate  of short-term and long-term borrowings as the
imputed  rate.

During  the  year  ended  December  31,  1999,  the Company made an organization
development  loan available to Meridian Oriental Clinic (Clinic), an independent
and  unrelated  company,  who,  in  return,  agreed to demonstrate the Company's
products  and perform clinical experiments. The loan is non-interest bearing and
will  be  repaid  annually  until  2006.  The  amount of repayment is determined
annually  by  offsetting  clinical  experiment expense incurred by the Clinic on
behalf  of  the  Company  and  only  the  difference will be paid. Such expenses
incurred by the Clinic are $25,515, $35,088 and nil for the years ended December
31,  2001, 2000 and 1999, respectively and these amounts were offset against the
short-term  loan  made  to  the  Clinic  in  the  respective  years.

The  Company's  management  believes  a  series  of annual expenses will further
reduce  the  balance of the loan as described above.  A portion of the loan made
to the Clinic is secured by a refundable lease deposit and medical equipments of
the Clinic with value of $255,435 in total. Based on the management's estimates,
the  Company  provides  allowance  for  doubtful accounts, amounting to $238,932
(equivalent  to  50%  of net book value less secured lease deposit), in relation
with  the  loan  to  the  Clinic  as  of  December  31,  2001.

During  the  years ended December 31, 2001 and 2000, the Company advanced a loan
to  its  sales  agent,  amounting  to $160,100 and $ 33,544, respectively. These
loans  bear  interest  of  11%  per  annum and will be repaid within the next 12
months.

Interest  income  arising  from  these  loans is classified as other income. Any
provision  for  bad  debts  is  classified  as  non-trade  bad debt expense as a
component  of  other  expenses.
                                       58
<PAGE>
4.     INVENTORIES

Inventories  as  of December 31, 2001 and 2000 are as follows (in U.S. dollars):
<TABLE>
<CAPTION>

                        December 31,
                       --------------
                     2001            2000
                    -----            ----
<S>              <C>            <C>
Merchandise . .  $     448,622  $  803,786
Finished goods.        325,200     107,518
Work in-process        223,650      48,968
Raw materials .        190,517     132,865

                 $   1,187,989  $1,093,137
</TABLE>

Merchandise  consists  of  medical  equipment,  medical  supplies and electronic
equipment  purchased  and  held  for  resale  by  the Company. Finished goods is
principally  oriental or alternative medical equipment the Company has produced.

5.     OTHER  CURRENT  ASSETS

Other  current  assets  as of December 31, 2001 and 2000 are as follows (in U.S.
dollars)  :
<TABLE>
<CAPTION>


                             December 31,
                            ============

                           2001      2000
                         --------   ------
<S>                      <C>       <C>
Accrued interest income  $  9,510  $ 24,009
Advance payments. . . .    96,894    86,360
Prepaid income taxes. .     8,301    45,938
Prepaid expenses. . . .     8,709     8,007

                         $123,414  $164,314
</TABLE>
                                       59
<PAGE>

6.     INVESTMENTS

Investments  as  of  December 31, 2001 and 2000 are as follows(in U.S.dollars) :



<TABLE>
<CAPTION>


                                      Ownership
                                      Percentage                               December 31,
                                      ----------                                 ------------
                                  Dec. 31,          Dec. 31,          Original
                                    2001             2000               Cost        2001          2000


<S>                               <C>      <C>       <C>       <C>
(1) Equity-method Investments

Beijing Meridian Medicals
Equipment Co., Ltd.
                                    45.00. . . .       -              $ 58,588    $ 41,216          -

(2) Other Investments


Terasource Venture Capital. Co.,
 Ltd.
                                       -. . . . .     0.16                -         -              87,845
Medicapital Co., Ltd.
                                       -. . . . .     0.15              22,840      -              23,679
Neoest Co., Ltd.
                                                      2.87 . .  . . .    3,807      -               3,946
                                                                      --------     ------      -----------
                                                                        26,647 .    -             115,470
                                                                      --------     ------      -----------
  Total. .                                   . . . . . . . . . .    .  $85,235    $ 41,216       $115,470
                                                                      --------     ------      -----------
</TABLE>


In 2000, investments in Terasource Venture Capital Co., Ltd and Medicapital Co.,
Ltd,  with book value of $112,625 and $180,458, were disposed of at $342,532 and
179,825,  respectively.  The  Company  recorded  a  gain  on  disposal  of these
investments  of  230,302  (including  translation  adjustments  of  $1,028).

In  2001,  investments in Terasource Venture Capital Co., Ltd with book value of
$33,447  were disposed of at $73,529. The Company recorded a gain on disposal of
these  investments  of  41,372  (including  translation  adjustments of $1,290).

As of December 31, 2000, the investment in listed, and hence readily marketable,
equity  securities  of Terasource Venture Capital Co., Ltd. had a carrying value
of  $33,447  and  a  fair value of $87,845. Accordingly, the Company recorded an
unrealized  holding gain of $60,459(including translation adjustments of $6,061)
as  at  December  31,  2000, as a part of stockholders' equity. Since Terasource
Venture  Capital  was  first  listed  on KOSDAQ during 2000, the Company did not
recognize  any  unrealized  holding  gain/loss  as  at  December  31,  1999.

Investments  in  equity securities of nonpublic companies, Medicapital Co., Ltd.
and  Neoest  Co., Ltd., which are not readily marketable, had carrying values of
$27,061 and $27,625 as of December 31, 2001 and 2000, respectively. In 2001, the
Company  recognized  impairment  loss  of $ 27,061 on investments in Medicapital
Co.,  Ltd.  and  Neoest  Co.,  Ltd.
                                       60
<PAGE>

7.     PLEDGED  ASSETS

As  of  December  31,  2001,  the  Company's  land and buildings were pledged as
collateral for the Company's lines of credit totaling $790,255 with ChoHung Bank
and  Hanvit  Bank.

8.     SHORT-TERM  BORROWINGS

Short-term borrowings denominated in Korean won as of December 31, 2001 and 2000
are  as  follows  (in  U.S.  dollars):
<TABLE>
<CAPTION>




                                       Annual      Final             December 31,
                                      Interest    Maturity
Lender                                 rate (%)    Date           2001          2000
                                     ----------  ----------      ------         -----
<S>                     <C>        <C>         <C>            <C>         <C>

ChoHung Bank                       8.0 - 10.0  Aug.28.2002    $1,040,142    $715,049
Korea First Bank                            -              -           -     157,853
Shinhan Bank                             10.0  Aug. 17,2002       70,774      78,891
Hanvit Bank                             12.97  May 15,2002       159,968     290,109
Korea Exchange Bank                      7.06  Sep. 5, 2002      190,331           -
Small/Medium Ind. Bank                    8.0  Aug.20, 2002       20,556           -
Medison Co., Ltd.                           -  Jun. 30,2002          926     162,759
Other                                       -              -     104,876      87,214
                                                                 -------     -------
                                                             $ 1,587,573  $1,491,875
</TABLE>

 Korea  Technology  Credit Guarantee Fund has provided a guarantee in the amount
of  $194,138  to  secure  repayment  of  short-term  borrowings  of the Company.

9.     LONG-TERM  BORROWINGS

Long-term  borrowings denominated in Korean won as of December 31, 2001 and 2000
are  as  follows  (in  U.S.  dollars):
                                       61
<PAGE>

<TABLE>
<CAPTION>




                                    Final      Annual      December 31,
                                                          ==============
                                   Maturity   Interest
Lender                               Year      rate(%)         2001          2000
                                                                          ----------
<S>                                <C>       <C>          <C>             <C>         <C>

ChoHung Bank. . . . . . . . . . .  03 to 06      4-6.25   $   1,029,928      $1,382,897
Peace Bank of Korea                      08             6.0       29,692         30,781
Small and Med. Industry Promotion        04             7.5      247,431        138,121
Shinhan Bank                             02             4.0       30,453         55,249
Daewoo Capital Co., Ltd                  03               -        8,088             -
                                                                --------      ----------
                                                               1,345,592      1,607,048
Less portion due within one year                                (251,535)      (425,667)
                                                                --------      ----------
Long-term portion                                             $1,094,057     $ 1,181,381
</TABLE>

The Company was provided payment guarantees amounting to $1,032,356 and $555,006
by  Korea  Technology Credit Guarantee Fund and Medison Co., Ltd., respectively,
in  relation  to  the  above  long-term  borrowings.

As  of  December 31, 2001, short-term investments of $839,204 and long-term bank
deposits  of  $73,316  are  subject  to  withdrawal  restrictions in relation to
short-term  and  long-term  bank  borrowings

The future scheduled maturities of long-term borrowings at December 31, 2001 are
as  follows:
<TABLE>
<CAPTION>



YEARS ENDING
December 31           In U.S. dollars
<S>                   <C>
2002 . . . . . . . .       $   251,535
2003 . . . . . . . .           392,985
2004 . . . . . . . .           447,332
2005 . . . . . . . .           233,400
2006 and thereafter.            20,340
                              ---------
                            $1,345,592
</TABLE>
                                       62
<PAGE>

10.     DEBENTURES

The  Company  issued  two  series of non-guaranteed corporate bonds for the year
ended  December  31,  2001. Details of debentures as of December 31, 2001 are as
follows  (in  U.S.  dollars):
<TABLE>
<CAPTION>

                          Maturity        Annual Interest Rate    Amount
                      =================   ====================   =======
<S>                   <C>                <C>                     <C>
1st. . . . . . . . .  January 31, 2003        12.15 %          $761,325
2nd. . . . . . . . .  August 14, 2004         13.92 %           380,662
                                                               --------
                                                              1,141,987
Debenture Issue Cost                                            (5,539)
                                                             -----------
                                                           $  1,136,448
</TABLE>

11.     LONG-TERM  ACCOUNTS  PAYABLE-OTHER

A number of external research institutes owned by the Korean government, who are
interested  in  the  Company's research and development projects, furnish grants
for  the  projects  by  providing  the  Company  with  certain  initial lump sum
payments.  The total grant recognized as sales in 2000 and 1999 was $127,496 and
$136,595,  respectively  and  related  costs incurred by the Company in 2000 and
1999  was  $417,983 and $470,956, respectively and the related costs incurred by
the  Company  in  2000  and 1999, which are included in research and development
expenses,  were  $  417,983 and $ 470,956, respectively. There were no grants or
expenses  in  2001.

The  contracts  between  the  Company  and  each of these parties provides that,
depending  on  the contract, 50 to 70% of the initial payment, which the Company
recognizes as income upon completion of the projects, is retained by the Company
regardless  of the result of the research and development projects. However, the
Company  is  required to repay, over a 3 to 5 year period, the remainder only if
the  results  are  successful.  Accordingly, the Company accrues such amounts as
long-term  accounts  payable-other.


     Details  of  long-term  accounts  payable-other as of December 31, 2001 and
2000  are  as  follows(in  U.S.  dollars)  :
                                       63
<PAGE>

<TABLE>
<CAPTION>

                                            Final          December 31,
                                                         --------------
                                           Maturity
                                             Year          2001          2000
                                         -------------    ------        ------
<S>                                       <C>         <C>             <C>
Korea Institute of Industrial Technology
Evaluation and Planning. . . . . . . . .       2005   $      72,312   $97,672
Wonkwang University Research Institute .       2004          35,165    48,607
Small and Medium Business Administration       2004          21,652    24,956
                                                           --------   --------
                                                            129,129   171,235
Less current portion due within one year                    (38,922)  (37,367)
                                                           --------   --------
Long-term portion. . . . . . . . . . . .                  $  90,207  $ 133,868
</TABLE>

The  above  long-term accounts payable-other have no interest terms but have not
been  discounted  at  present  value  as  the  difference between book value and
present  value  is  not  material.  The  current portion is included in accounts
payable-other.

The  future scheduled maturities of long-term accounts payable-other at December
31,  2001  are  as  follows:


<TABLE>
<CAPTION>

Years ending
December 31               In U.S. dollars
<S>                   <C>

2002 . . . . . . . .  $         38,922
2003 . . . . . . . .            38,922
2004 . . . . . . . .            38,922
2005 . . . . . . . .             9,485
2006 and thereafter.             2,878
                             ----------
                               129,129
                             -----------
</TABLE>

12.     RETIREMENT  AND  SEVERANCE  INDEMNITIES

Employees  with  more than one year of service are entitled to receive severance
indemnities,  based  on  length  of service and rate of pay, upon termination of
their  employment.

Although the term Pension is used in the National Pension Law (Law) and National
Pension  Fund  (NPF),  a  Korean Pension is a one-time lump sum payment upon the
termination  of  an  employment,  rather  than  a series of payments in annuity.

The  Company's  estimated  liability  under  the plan, equal to the amount which
would  be  payable if all employees were to terminate at the balance sheet date,
has  been  accrued. The following is the formula used to determine the amount of
the  benefit  payable:

Amount  payable  =  (Certain percentage, as provided by the Law, of the person's
latest  annual  salary  or  wage)  X  (Number  of  years  employed)
                                       64
<PAGE>

The  application  of  the Law is the same for both retirements and layoffs. That
is, there is no difference between retirement benefits and severance benefits in
Korea.

The  Company  transferred a portion of its accrued severance indemnities in cash
to  the  National Pension Fund as provided by the National Pension Law of Korea.
The  amount  transferred will reduce the retirement and severance benefit amount
payable  to  the  employees  when  they  leave the Company and is reflected as a
direct  deduction  from  the  retirement and severance benefits liability in the
accompanying  consolidated  financial  statements.  However, the requirement for
transfer  to  NPF  was  repealed  in  April  2000.

Changes in retirement and severance indemnities for the years ended December 31,
2001,  2000  and  1999  are  as  follows  (in  U.S.  dollars):
<TABLE>
<CAPTION>

                                       Year ended December 31,
                                     ----------------------------
                                    2001              2000            1999
                          -------------------------
<S>                       <C>                        <C>        <C>
  Beginning balance. . .          $238,067          $198,926        $202,622
  Provision. . . . . . .           120,972           113,777          77,294
  Payments . . . . . . .           (31,961)          (47,415)        (92,764)
  Translation adjustment            (9,793)          (27,221)         11,774
                             --------------         ---------        ---------
  Ending balance . . . .           317,285           238,067         198,926
  Transferred to NPF . .            25,368            27,615          34,982
                             --------------         ---------        ---------
                                   291,917          $210,452         $163,944
 Less current portion. .            44,216            39,060           36,986
                             --------------         ---------        ---------
  Net. . . . . . . . . .  $        247,701           $171,392        $126,958
</TABLE>

Current  portion  of  retirement  and severance indemnities is included in other
current  liabilities.

13.     SHARE  CAPITAL

(a)     On  September 27, 1999, the Company amended its authorized capital stock
from  11,000,000 shares to 50,000,000 shares, and issued 5,000,000 shares at par
value  ($0.17  per  share)  for  cash  on  October  1,  1999.
(b)     On  December  29,  1999,  the Company converted its convertible bonds to
common  stock  and  issued  1,346,325 shares of common stock at $0.58 (par value
$0.17  at  the  spot  exchange  rate).
                                       65
<PAGE>

(c)     On March 2, 2000, the Company issued 750,000 shares of common stock (par
value  $0.18  at  the  spot  exchange  rate)  at  $0.89  per  share  for  cash.
(d)     On  February  6,  2001, the Company acquired a 100% equity interest in a
U.S.  corporation  named By George Holding, Corp. and issued 1,703,550 shares of
common  stock  in  consideration  of  the  acquisition.(Refer  to  Note  20)
(e)     In  accordance  with  a  resolution of the shareholders' on February 15,
2001,  the  Company  split  its  common  stock  on  a  ten-for-one  basis.  The
shareholders'  also  authorized  a  splitting of the Company's common stock on a
five-for-two  basis  on  March  19,  2001.  All  references  in the consolidated
financial  statements  to  number  of shares, per share amounts and stock option
data  have  been  adjusted  to  give  effect  to  these  stock  splits.

14.     ACCUMULATED  DEFICIT

The Company appropriated $224,659 and $247,854 as of December 31, 2001 and 2000,
respectively, for business rationalization pursuant to Korean Commercial Law. In
accordance with the Special Tax Treatment Control Law, the amount of tax benefit
associated with certain tax exemptions and tax credits must be appropriated as a
reserve  for  business  rationalization.  The purpose of the legal mandate is to
prevent  companies  from  paying out all of their earnings as dividends to their
shareholders  and,  thereby,  to  motivate companies to make reserves for future
investment  and  development. The appropriation for business rationalization may
not be utilized for cash dividends, but may be used to offset a deficit, if any,
or  transferred to capital stock. However, the requirement for appropriation for
business  rationalization  was  repealed  in  2001.

15.     PRIOR  PERIOD  ADJUSTMENTS

The  Company  had  understated  its  purchase from Medison Co., Ltd. and foreign
currency  transaction  gain  by  $102,453  and  $7,937(net  of  $1,596  loss),
respectively,  in  1999. Foreign currency transaction gain of $58,707(net of $80
loss)  was  understated for the year ended December 31, 2000. The financial data
for  all  periods presented was restated to the correct basis as follows(in U.S.
dollars):

<TABLE>
<CAPTION>

                                              Prior Period        Adjusted
                                          Previously reported   Adjustments     Balance
                                          ====================  ============
<S>                                       <C>                   <C>           <C>
Accumulated deficit at January 1, 1999 .            ($659,663)    ($659,663)
  Net income . . . . . . . . . . . . . .             (278,091)
  Prior period adjustments
    - Purchase . . . . . . . . . . . . .             (102,453)
    - Foreign currency transaction gain.                7,937
  Adjusted net income. . . . . . . . . .             (372,607)
Accumulated deficit at December 31, 1999             (937,754)      (94,516)   (1,032,270)
  Net income . . . . . . . . . . . . . .             (755,393)
  Prior period adjustments
    - Foreign currency transaction gain.               58,707
  Adjusted net income. . . . . . . . . .             (696,686)
Accumulated deficit at December 31, 2000          ($1,693,147)     ($35,809)  ($1,728,956)
</TABLE>


<TABLE>
<CAPTION>

                                          Previously   Prior Period    Adjusted
                                         -----------   ------------   ---------
                                           reported    Adjustments     Balance
                                         ------------  ------------  ------------
<S>                                      <C>           <C>           <C>
Accumulated deficit at January 1, 1999.    ($659,663)                 ($659,663)
  Net income. . . . . . . . . . . . . .     (278,091)
  Prior period adjustments
    - Purchase. . . . . . . . . . . . .                  (102,453)
    - Foreign currency transaction gain                     7,937
  Adjusted net income . . . . . . . . .                               (372,607)
                                         -----------   ------------   ---------
Accumulated deficit at December 31,
 1999 . . . . . . . . . . . . . . . . .     (937,754)      (94,516)   (1,032,270)
  Net income. . . . . . . . . . . . . .     (755,393)
  Prior period adjustments
    - Foreign currency transaction gain                     58,707
  Adjusted net income . . . . . . . . .                                 (696,686)
                                         -----------   ------------   -----------
Accumulated deficit at December 31,
2000. . . . . . . . . . . . . . . . . .  ($1,693,147)     ($35,809)  ($1,728,956)
                                           ============ =========== ============

</TABLE>

16.     COMMITMENTS  AND  CONTINGENCIES

As of December 31, 2001, The Company is contingently liable for promissory notes
of $911,643 sold to banks with recourse. The Company's management believes that,
based  upon  its  past  history  of similar transactions, the possibility of the
issuers'  defaults  on  the  notes  is  remote.

At  December  31,  2001,  the  Company  is contingently liable for guarantees of
indebtedness,  principally  for  customers,  amounting  to  $76,551.


17.     RELATED  PARTY  TRANSACTIONS

The  Company's  transactions  and  account balances with related parties for the
years  ended  December  31,  2000  and  1999  are summarized as follows (in U.S.
dollars):
                                       66
<PAGE>

<TABLE>
<CAPTION>

                                           Year ended December 31,
                                       2001         2000           1999
                                   --------       -------       -------
<S>                           <C>                      <C>       <C>
TRANSACTIONS
  Sales to:
  Medison Co., Ltd.. . . . .              -        $267,367     $ 68,858
  Medicapital Co., Ltd . . .           18,697         -          717,425
  Medison Do Brazil. . . . .              -         116,208       31,568
  Purchases from:
  Medison Co., Ltd . . . . .                         96,861      102,453
      Medichems Co.,Ltd. . .                             -       423,246
                                       69
                                       67
<PAGE>

Account Balances
  Accounts receivable-trade:
  Medison Co., Ltd . . . . .               -        240,567            -
  Medicapital Co., Ltd . . .            17,206         -          33,761
  Medison Do Brazil. . . . .               -         88,318       26,812
  Short-term loans:
  Beijing Meridian Medicals.            28,771         -               -
  Accounts receivable-other:
  Medison Co., Ltd . . . . .              -          50,610            -
  Medicapital Co., Ltd . . .              -         161,799            -
  Accounts payable-trade:
  Medidas Co., Ltd . . . . .              -            -           6,507
  Medison Co., Ltd . . . . .            92,681       99,174      110,611
  Account payable-other:
  Medison Co., Ltd . . . . .              -         198,792      114,793
  Short-term borrowings:
  Medison Co., Ltd.. . . . .              -         162,759      181,528
  Medicapital Co., Ltd.. . .              -            -           2,889
</TABLE>

As  of December 31, 2000, Medison was the largest shareholder of the Company and
therefore  treated  as  a  related  party.  During 2001, Medison disposed of its
investment  in  the Company and, as a result, Medison is no longer considered to
be  a related party. Accordingly, Medison and its affiliates, such as Medison Do
Brazil,  Medicapital  and  Medidas  have  been  excluded  from the related party
disclosure  for  the  year  ended  December  31,  2001.

18.  INCOME  TAXES

The  Company  is subject to corporate income tax and resident surtax normally at
an  aggregate  rate  of  17.6% on taxable income up to W100,000,000 and 30.8% on
taxable  income  over  that  amount.
                                       68
<PAGE>

At December 31, 2001, the Company had technology and human resources development
tax  credit carryforwards of $179,025($145,274 in 2000). It is expected that the
Company  could  not  realize  a  tax  benefit from such tax credit carryforwards
before  their  expiration  in  2007  (2006  for  2000). A valuation allowance of
$816,816  ($232,135  in  2000)  has  been  recognized to offset the deferred tax
assets  related  to  these  tax  credit  carryforwards  and  other  temporary
differences.  Deferred  income  taxes  reflect  the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes  and  the  amounts  used for income tax purpose. Significant
components  of  the  Company's deferred tax assets as of December 31, 2001, 2000
and  1999  are  as  follows:

<TABLE>
<CAPTION>

                                           2001        2000        1999
                                        ----------  ----------  ----------

<S>                                     <C>         <C>         <C>
Deferred tax assets
Accruals and reserves. . . . . . . . .  $ 637,791   $ 166,881   $ 156,208
Technology and human resources
development tax credit carry forwards.    179,025     145,038     104,857
                                        ----------  ----------  ----------
Total deferred tax asset(liability). .    816,816     261,919     261,065
Valuation allowance for deferred
Tax asset. . . . . . . . . . . . . . .   (816,816)   (261,919)   (261,065)
                                        ----------  ----------  ----------
Net deferred tax asset(liability). . .          -           -           -
                                        ----------  ----------  ----------
</TABLE>

Reconciliation  between  the  income  tax  expense  (benefit) computed using the
Korean  statutory  income  tax  rate and the Company's actual income tax expense
(benefit)  for  the  fiscal  years  ended December 31, 2001, 2000 and 1999 is as
follows:

<TABLE>
<CAPTION>

                                                           2001        2000        1999
                                                        ----------  ----------  ----------
<S>                                                     <C>         <C>         <C>
Income tax recovery at statutory rate. . . . . . . . .  $(577,774)  $(212,990)  $ (70,425)

Reduction of income tax benefit due to lower tax rate
 on first W100,000,000
                                                           10,206      11,579      11,109
Temporary differences - primarily non-deductible
expenses under Korean Tax Law
                                                          557,214     (25,759)    137,518
Permanent differences - expenses (primarily
 entertainment and others) in excess of tax deductible
limitation
                                                           35,473      33,479      (7,279)
Others - net
                                                          529,778     206,096     274,585
Changes in valuation allowances
                                                         (554,897)       (854)   (215,472)
                                                        ----------  ----------  ----------
Income tax expense
                                                                -   $  11,551   $ 130,037
</TABLE>

19.  STOCK  OPTIONS

Under the Company's Articles of Incorporation, the Company may grant options for
the  purchase of shares to certain qualified officers and employees. In order to
qualify  for participation in the Stock Option Plan, officers and employees must
have  the  ability  to  contribute  to  the  establishment,  development  or
technological  innovation  of  the  Company.
                                       69
<PAGE>

The  specific  terms  and  conditions  of  stock options granted under the Stock
Option  Plan  shall  be  approved  at a duly convened shareholders' meeting. The
maximum aggregate number of shares available for issuance under the Stock Option
Plan may not exceed 50% of the total number of shares outstanding. Stock options
may  not  be  granted to all officers and employees at the same time. Any single
officer or employee may not be granted stock options for shares exceeding 10% of
shares  issued  and  outstanding.

Stock  options  granted under the Stock Option Plan will have a minimum exercise
price  equal  to  the  arithmetic  mean of (i) the weighted average of the daily
market  prices  for  the  two-month  period prior to the date of grant, (ii) the
weighted  average  of  the daily market prices for the one-month period prior to
such  date,  (iii)  the  weighted  average  of  the  daily market prices for the
one-week period prior to such date. When new shares are issued upon the exercise
of  the  stock  options,  the  option  exercise price shall not be less than the
greater  of the market price of shares valued as of the date of the grant or the
par  value  of  the  shares  concerned.

A  summary  of  the  status  of the Company's two fixed stock option plans as of
December  31,  2001  is  presented  below  :


<TABLE>
<CAPTION>



Grant Date    Options     Exercise Price (by the Spot   Fair Value per Share   Vesting Period
            Outstanding          Exchange rate)          of Options Granted
            ------------  ----------------------------  ---------------------
<S>         <C>           <C>                           <C>                    <C>

Feb. 23, .                                                                     Feb. 2003 to
 2000. . .       471,050        W1000 ($0.88)           $       0.26           Feb. 2007

Mar. 19,                                                                       Mar.2004 to
 2001. . .       425,250        W680 ($0.52)            $       0.47           Mar. 2008
               ----------
                 896,300
               ----------
</TABLE>

The Company applies APB Opinion 25 and related interpretations in accounting for
its  plan.  No  compensation cost has been recognized for its fixed stock option
plan. Although compensation cost for the Company's stock-based compensation plan
is  determined  based  on  the  fair value at the grant date consistent with the
method of SFAS 123, the Company's net loss and loss per share are not changed as
the exercise price of the stock option exceeds the estimated fair value thereof.
The weighted average fair value per share of options granted was $0.47 and $0.26
during  2001  and  2000,  respectively.  The  fair  value of the option grant is
estimated  on  the  grant date using the Black-Scholes option pricing model with
the following assumptions: dividend yield and expected volatility of nil for all
years,  risk-free  interest  rate  of  9  percent, and expected life of 4 years.

20.  ACQUISITION

As  shown  in  Note 2a, the Company acquired a controlling ownership interest in
three  sales  agent companies and one other company engaging in medical software
service,  for  an  aggregate amount of $389,792 in cash and $49,872 in products,
for the years ended December 31, 2000 and 1999, respectively. These acquisitions
were  recorded  under  the  purchase  method  of  accounting  and, therefore the
purchase  prices  have been allocated to assets acquired and liabilities assumed
based  on estimated fair values. The results of operations of these entities are
included  in  the consolidated financial statements of the Company from the date
of  acquisition.

The  estimated  fair  values of net assets and goodwill relating to acquisitions
are  summarized  as  follows(in  U.S.  dollars)  :

<TABLE>
<CAPTION>


                   2001                      2000                        1999
                   ----      ----------------------------------------    ----
                  Beijing      Pusan      Chunee      True              Meridian
                 Meridian     Meridian     Soft      World     Total     Asia
                   ---------  ---------  --------
<S>                <C>        <C>        <C>       <C>       <C>       <C>
Net assets. .   $  33,665  $  53,547    $ 99,073   $199,024   $351,644  $49,872
Goodwill* . . .    26,316          -      23,256     14,892     38,148        -
                ---------  ---------    --------   --------   --------  -------
Acquisition
price              59,981  $  53,547    $122,329   $213,916   $389,792  $49,872

</TABLE>

     *The  purchased  goodwill,  amounting  to $30,020, was written off in 2001.

At  December  15,  2001,  the  Company  has  disposed  of 2% of its original 51%
shareholding  in  Meridian  Asia  Co.,  Ltd  ("MACL"),  resulting in a 49% share
ownership  in  MACL.

Three  members of management of the Company disposed of their 1% share ownership
in  True  world (3% in total) on December 22, 2001. As a result, the Company was
no  longer  able  to  exercise  the  significant  control  over  True  World
                                       70
<PAGE>

ChuneeSoft  filed  for  bankruptcy  during  December 2001 and as of December 31,
2001.  ChuneeSoft  practically  ceased  its  entire  operation.  As  a  result,
ChuneeSoft  was consolidated as of the date of bankruptcy. As the Company was no
longer  able  to exercise control over ChuneeSoft, net assets of ChuneeSoft were
removed from the balance sheet and the resulting loss of $10,212 was included in
extraordinary  items.

On  February  6,  2001,  the  Company  acquired a 100% equity interest in a U.S.
corporation  named  By  George  Holding, Corp.("By George") in consideration for
1,703,550  common  shares  issued  from  treasury.  By  George  is  an  inactive
corporation  that  has  no  assets  or  liabilities.  This  transaction  will be
accounted  for  as a capital transaction in substance but will have no impact on
the  Company's  consolidated  financial  statements  other  than  to  reduce the
reported  loss  per  share  to  $0.04  for  the  year  ended  December 31, 2000.

On November 10, 2001, the Company acquired 45% of the share ownership in Beijing
Meridian  Medicals  Equipment Co., Ltd. for $59,981(by the spot exchange rate of
Won  1,283  to  $1)  in  cash.(Refer  to  Note  6)


21.  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

Fair  value  of  financial  instruments  as of December 31, 2001 and 2000 are as
follows  (in  U.S.dollars)  :
<TABLE>
<CAPTION>


                                                  Dec. 31, 2001          Dec. 31, 2000
                                                  =============          =============

                                               Carrying      Fair       Carrying      Fair
                                                amount       value       amount       value
                                              ----------     ------     ---------    ------
<S>                            <C>                      <C>          <C>         <C>
Financial assets :
  Cash and cash equivalents .  $               105,216  $   105,216  $  398,625  $   398,625
  Short-term investments. . .                  841,476      841,476       2,647        2,647
  Accounts receivable
- trade and other . . . . . .                1,780,052    1,780,052   2,983,147    2,983,147
  Short-term loans. . . . . .                   89,798       89,798     146,327      146,327
  Investments
    Market-traded securities.                        -           -       87,845      87,845
    Non-marketable securities  -                41,216      (note a)     27,625     (note a)
  Long-term bank deposits . .                   80,929       80,929     108,524     108,524
  Long-term loans . . . . . .                  220,672      220,672     383,695     383,695
                                              ----------              ---------
                                           $ 3,159,359              $ 4,138,435
                                            ----------              -------------

Financial liabilities :
Accounts payable
- trade and other . . . . . .  $             1,601,844  $ 1,601,844  $1,703,015  $ 1,703,015
  Short-term borrowings . . .                1,587,573    1,587,573   1,491,875    1,491,875
  Long-term borrowings
    including current portion                1,345,592    1,345,592   1,607,048    1,607,048
  Debentures. . . . . . . . .                1,136,448    1,136,448           -            -
  Long-term accounts payable.                   90,207       90,207     133,868      133,868
                                            ----------               ----------
                               $             5,761,664              $ 4,935,806
</TABLE>



 (note  a)  Fair  value  of  these investments was not available as they are not
publicly  traded.  Accordingly it is not practicable to determine the fair value
of  such  securities.

Credit risk arises from the potential for customers and other debtors to default
on their contractual obligations to the Company. The Company does not anticipate
customers  and  other  debtors  will default on their obligations to any greater
extent  than  that currently provided for. The Company limits its credit risk by
granting credit only to customers and other debtors that are considered to be of
high  quality.


22.  STATEMENTS  OF  CASH  FLOWS

(a)     Non-cash  investing  and  financing  transactions
Important  non-cash  investing  and  financing  transactions  for the year ended
December  31,  1999  are  as  follows  (in  U.S.  dollars)  :
                                       71
<PAGE>

<TABLE>
<CAPTION>

                                                      Year ended
                                                    Dec. 31, 1999
<S>                                                 <C>
Conversion of convertible bonds into common stock.  $      788,491
Acquisition of investments in exchange of products          49,872
</TABLE>

Also,  during  1999,  the  Company  sold  certain  of its assets and liabilities
relating  to  two  non-core  product lines to an unrelated party, Medicore, Co.,
Ltd.  and  this  non-cash  involving  transaction  is  summarized  as  follows:

<TABLE>
<CAPTION>

Assets                               Liabilities
<S>                   <C>           <C>                      <C>

Inventory. . . . . .  $    784,646   Accounts payable-trade   $1,253,851
Accounts receivable.       109,950   Accounts payable-other       30,705
Goodwill(note 1) . .       389,960
                       -----------                            -----------
                      $  1,284,556                            $ 1,284,556
</TABLE>

(note  1)  The two parties agreed that $389,960, 80% of the goodwill acquired in
the  1998  acquisition  of Hippo was related to these two product lines based on
the  inventory-based  computation  method.  The  percentage  of  the  goodwill
transferred  approximated that of the inventory transferred to Medicore Co. Ltd.

During  2000,  the  Company  received  non-cash  contributions from its minority
investors,  which  was  primarily  inventory  amounting  to  $46,815.

(b)     Interest  and  income  taxes  paid  and  received
Interest and income taxes paid and received in cash for the years ended December
31,  2001,  2000  and  1999  are  as  follows  (in  U.S.  dollars)  :
<TABLE>
<CAPTION>


                                  Year ended December 31,
                                  =======================

                                  2001       2000      1999
                                 -----       -----     -----
<S>                             <C>        <C>       <C>
Interest paid for the year . .  $333,084   $340,930  $238,085
Income taxes paid for the year   (36,571)   186,148    10,063
Interest received. . . . . . .    38,641     41,173    46,143
</TABLE>
                                       72
<PAGE>

23.  SEGMENT  INFORMATION

The  Company  operates  in  a  single reportable operating segment, that is, the
development  and  manufacture  of  alternative  medicine  equipment.  The single
reportable  operating  segment  derives  its  revenue  from  the  sale  of  its
alternative  medicine  equipment,  software  and  other  related products. As at
December  31,  2001,  substantially  all  of the assets related to the Company's
operations  were  located  in  Korea.  Net revenue is attributable to geographic
locations  based  on  the  location  of  the  customer,  as  follows:
<TABLE>
<CAPTION>


                                December 31,
                    -------------------------------
                     2001        2000        1999
                  ----------    ------      -------
<S>               <C>         <C>         <C>
Export
   U.S.A.. . . .  $  139,693  $  129,151  $  248,000
   Canada. . . .     135,794           -           -
   South America      57,119     111,216      31,567
   South Asia. .      26,291      68,597     166,514
   China . . . .      90,710     332,466     226,188
   Japan . . . .           -           -      21,667
   Other . . . .      83,407       2,476      33,845
                     533,014     643,906     727,781
                  ----------  ----------  ----------

Domestic Sales .   4,756,547   4,660,134   4,639,310

                  $5,289,561  $5,304,040  $5,367,091
</TABLE>

24.  NEW  TECHNICAL  PRONOUNCEMENTS

In  June  2001,  the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No.  142, "Goodwill and Other Intangible Assets." Under these new standards, all
acquisitions  subsequent  to  June  30,  2001  must  be  accounted for under the
purchase  method  of  accounting,  and purchased goodwill is no longer amortized
over  its useful life. Rather, goodwill will be subject to a periodic impairment
test  based  upon  its  fair  value.
                                       73
<PAGE>

In  August  2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations"  ("SFAS  143").  SFAS  143  establishes  accounting  standards  for
recognition  and  measurement  of  a liability for the costs of asset retirement
obligations.  Under SFAS 143, the costs of retiring an asset will be recorded as
a  liability  when  the  retirement  obligation arises, and will be amortized to
expense  over  the  life  of  the  asset.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets"  ("SFAS  144").  SFAS  144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
discontinued  operations.

The  Company  is  currently  evaluating  the  impact  of these pronouncements to
determine  the  effect,  if  any,  they  may  have on the consolidated financial
position  and  results  of  operations.

25.  SUBSEQUENT  EVENTS

On  January  16,  2002,  the  Company established "Meridian America Medicals Inc
(MAMI)",  a  foreign based subsidiary located in the United States, for the sake
of  promoting  sales  in  North  America.

26.  UNCERTAINTIES  IN  BUSINESS  ENVIRONMENT

The  Asia  Pacific  region,  including  Korea, has been experiencing significant
economic  difficulties.  The  operations  of  the  Company,  and  those of other
companies  in  Korea  have  been significantly affected, and will continue to be
affected for the foreseeable future, by the general unstable economic conditions
in  the  country  and in the Asia Pacific region. It is currently uncertain what
the  resulting effect will be on the future operations and financial position of
the  Company  and  its  subsidiaries. The ultimate outcome of this matter cannot
presently be determined. Therefore, the consolidated financial statements do not
include  any  adjustments  that  might  result  from  those  uncertainties.

ITEM  19.  EXHIBITS
-------------------
None
                                       74
<PAGE>

SIGNATURES

The  registrant  hereby  certifiers  that  it  meets all of the requirements for
filing on Form 20 - F and that it has duly caused and authorized the undersigned
to  sign  this  registration  statement  [annual  report]  on  its  behalf.


                              Meridian  Co.,  Ltd



                        By:          /s/  Hyeon-seong  Myeong
                              --------------------------------
                                 Name:  Hyeon-seong  Myeong
                                 Title  :  President,  CEO

Date:  July  12,  2002


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