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,  2003
                                      ---------------------
[ ]     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)

            4F, Heungseong Bldg., 197-3, Jamsil-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:

Common  shares
--------------------------------------------------------------------------------
                                (Title of Class)

--------------------------------------------------------------------------------
                                (Title of Class)

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,  2003:  19,151,484
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
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]

                                        1
<PAGE>

References

All  references  to  "Korea" herein are references to The Republic of Korea. All
references  to  "Meridian,"  the  "Company",  "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 Company's issued common shares of  par value Won 200 (US $0.17
at  December  31,  2003  and  US  $0.17  at  June 18,  2004).

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, 2000,
2001, and 2002. and 2003 Solely for the convenience of the reader and to improve
clarity, certain Items in this annual report contain translations of certain Won
amountsinto 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, 2003,
which was Won 1,192.00 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 15, 2004 the noon
buying  rate  was  Won  1,161.70  to  US$1.00.

                                        2
<PAGE>

                                     PART I


ITEM  1.  IDENTITY  OF  DIRECTORS,  SENIOR MANAGEMENT  AND  ADVISERS
-------------------------------------------------------------------

A.     DIRECTORS  AND  SENIOR  MANAGEMENT

See  Item  4.C.

B.     ADVISERS
Not Applicable

C.     AUDITORS
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  audited  consolidated  financial statements of
Meridian Co., Ltd.  as  of  December  31, 2003 2002 and 2001 including the notes
thereto,  and "Item 5 - Operating 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,  2003, 2002, 2001, 2000 and 1999 are
derived  from the audited  consolidated  financial statements of Meridian, which
have been audited by ShinHan Accounting Corporation, independent accountants(for
the  fiscal  year  ended December 31,2003) and by SamDuk Accounting Corporation,
undependent  accountants(fiscal  years  ended  December 31, 2002, 2001, 2000 and
1999). The  report  of  SamDuk Accounting Corporation. covering the December 31,
2002 and 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 working
capital. Our consolidated financial statements are compiled  in  Won,  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, 2002, 2001, 2000 and 1999



                                                               2003          2002          2001          2000          1999
<S>                                                        <C>           <C>           <C>           <C>
Sales . . . . . . . . . . . . . . . . . . . . . . . . . .  $2,894,559    $3,521,657    $ 5,289,561   $ 5,304,040   $ 5,367,091
Cost of sales . . . . . . . . . . . . . . . . . . . . . .   1,253,544     1,915,811      2,478,106     2,978,975     3,988,964
                                                           -------------  ------------  ------------  ------------  ------------
Gross profit. . . . . . . . . . . . . . . . . . . . . . .   1,641,015     1,605,846      2,811,455     2,325,065     1,378,127

Operating expenses. . . . . . . . . . . . . . . . . . . .   3,082,711     3,133,684      3,996,150     3,338,976     2,396,014

 Operating loss . . . . . . . . . . . . . . . . . . . . .  (1,441,696)   (1,527,838)    (1,184,695)   (1,013,911)   (1,017,887)
 Other income . . . . . . . . . . . . . . . . . . . . . .      11,886       699,711        188,925       400,473     1,216,384
 Other expenses . . . . . . . . . . . . . . . . .. . . .     (813,694)   (1,461,698)      (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). . . . . . . . . . . . .     100,780      (161,224)       (26,326)     (158,508)       81,290

 Comprehensive loss . . . . . . . . . . . . . . . . . . . ($2,142,724)  $(2,451,049)   $(1,959,374)   $ (855,194)  $  (291,317)

 Weighted average number of common shares . . . . . . . .  18,094,211    16,472,700     15,703,850    14,071,325     8,371,325

 Basic and diluted loss per common share. . . . . . . .       $(0.12)   $     (0.14)   $     (0.12)   $    (0.05)  $     (0.04)
</TABLE>



                                       4
<PAGE>

<Table>
                     CONSOLIDATED BALANCE SHEETS (in U.S. dollars)
                     As of December 31, 2003,2002, 2001, 2000 and 1999


                                                2003         2002         2001         2000        1999
<S>                                           <C>           <C>          <C>         <C>         <C>
Cash and cash equivalents. . . . . . . . .  $   31,557    $  128,674    $   105,216   $  398,625  $1,428,090
Accounts receivable.- trade. . . . . . . .     405,471     1,058,953      1,759,821    2,708,607   1,895,453
Inventories. . . . . . . . . . . . . . . .     709,894       702,097      1,187,989    1,093,137     509,633
Other. . . . . . . . . . . . . . . . . . .      86,079       314,351      1,074,919      587,827     119,658

  Total current assets . . . . . . . . . .   1,227,001     2,204,075      4,127,945    4,788,196   3,952,834
Investments and other assets . . . . . . .     140,574       190,317        433,653      693,331     872,284
Property, plant and equipment - net. . . .   1,200,467     1,444,278      1,455,295    1,528,395   1,237,090
Goodwill and other intangible assets - net       1,684         2,161            932       75,273      77,792

  TOTAL ASSETS . . . . . . . . . . . . . .  $2,569,726    $3,840,831     $6,017,825   $7,085,195  $6,140,000


Trade accounts payable and current debt. .  $3,583,856    $4,802,926     $3,653,326   $3,779,553  $1,850,493
Long-term borrowings . . . . . . . . . . .   3,150,845     1,395,089      2,568,413    1,486,641   2,275,676
                                           -----------    ----------       ---------   ---------   ---------
  Total liabilities. . . . . . . . . . . .  $6,734,701     6,198,015      6,221,739    5,266,194   4,126,169

Minority interest. . . . . . . . . . . . .           -             -          6,593       26,691      35,669
Shareholders' equity . . . . . . . . . . .  (4,164,975)   (2,357,184)      (210,507)   1,792,310   1,978,162
                                                          ----------      ---------    ---------  ----------
   TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY. . . . . . . . . .  $2,569,726     3,840,831     $6,017,825   $7,085,195  $6,140,000
</TABLE>

<TABLE>
<CAPTION>

<S>   <C>             <C>                                <C>          <C>
YEAR  AT DECEMBER 31  ANNUAL AVERAGE RATE PER $1.00 US*  ANNUAL HIGH  ANNUAL LOW
----  --------------  ---------------------------------  -----------  ----------
1999      1136                   1188.2                      1243       1124.5
----  --------------  ---------------------------------  -----------  ----------
2000      1267                   1140.0                      1267       1105.5
----  --------------  ---------------------------------  -----------  ----------
2001      1314                   1293.4                      1369       1234.0
----  --------------  ---------------------------------  -----------  ----------
2002      1186                   1242.1                      1332       1160.6
----  --------------  ---------------------------------  -----------  ----------
2003      1192                   1193.0                      1262       1146.0
----  --------------  ---------------------------------  -----------  ----------

</TABLE>

Exchange rate information
The  following  table  sets  forth, for the periods and dates indicated, certain
information  concerning  the  noon  buying  rate  of  a  U.S.  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>

1999      1136                   1188.2                      1243       1124.5
----  --------------  ---------------------------------  -----------  ----------
2000      1267                   1140.0                      1267       1105.5
----  --------------  ---------------------------------  -----------  ----------
2001      1314                   1293.4                      1369       1234.0
----  --------------  ---------------------------------  -----------  ----------
2002      1186                   1242.1                      1332       1160.6
----  --------------  ---------------------------------  -----------  ----------
2003      1192                   1193.0                      1262       1146.0
----  --------------  ---------------------------------  -----------  ----------
* The average of the noon buying rates on the last date of each month during the
  period.
</TABLE>

                                       5
<PAGE>

B.     Capitalization and indebtedness
Not applicable

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.

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
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 a delay or an indefinite postponement in providing 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.

Subsequent  to  year-end,  in February 2004, the Company received approval for a
debt  rescheduling  plan  for a total of $3,589,271 from the Chooncheon District
Court,  Korea,  whereby a group of creditors of the Company and a representative
of  the Company agreed to reschedule the payments on $3,589,271 of the Company's
debt  which  constitute  approximately  68%  of  the  total outstanding accounts
payable and borrowings of the Company.

The Company also received funds of US$530,000.00 from investors through an
equity financing whereby, on June 8, 2004, the Company issued 3,312,500 common
shares of the Company to three investors at the price of US$0.16 per share. Th
shares issued are restricted from trading for one year.  The Company intends to
raise additional financing through the issuance of debt or equity instruments.
However, if the Company's efforts are not successful, the Company may not be
able to realize its assets and discharge its liabilities in the normal course
of operations.

The Company anticipates that losses may continue
For the year ended December 31, 2003 the Company had a net loss of  $2,243,504
and an accumulated deficit of $8,384,693. The Company recognizes the possibility
of 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.

                                        6
<PAGE>

Competition from larger companies
The  markets  in  which  the  Company competes are intensely competitive and the
Company  competes  and  will  compete with companies that have greater financial
and  technical  resources.  Therefore, to the extent that the Company is able to
establish sales revenues, there is no assurance that it would be able to sustain
such  sales  revenues.  Moreover  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  risk  to the Company's markets could impair the Company's growth and have a
negative  effect  on  the  Company's  business.

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 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 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,
results  of  operations  and  financial  condition. 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.

                                        7
<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 the Company's products
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 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.

                                        8
<PAGE>

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.

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.

                                        9
<PAGE>

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:
- difficulty  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 competing new
products
There  may  be  new products being introduced by competitors 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.

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 51.51% 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.

                                       10
<PAGE>

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.

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  to  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 t hat 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 sustained 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  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.

The Korean  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 1996 (base  year)  and  2003  is  as  follows:

                                       11
<PAGE>


<TABLE>
<CAPTION>

Year         CPI        Annual increase (%)
<S>          <C>           <C>
1996 (Base)  86.4            -
1997. . . .  90.2          4.4
1998. . . .  97.0          7.5
1999. . . .  97.8          0.8
2000. . . .  100.0         2.3
2001. . . .  104.1         4.1
2002. . . .  106.9         2.7
2003. . . .  110.7         3.6
</TABLE>

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 could continue to be
affected for the foreseeable future, by the general unstable economic conditions
in  the  country  and in the Asia Pacific region. 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.

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.

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.

                                       12
<PAGE>

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 are likely to occur it may impose
necessary restrictions. Emergency circumstances include, but are 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. The restrictions imposed by the Korean government
could  include  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, dividend or sales proceeds arising from  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.

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 acquire in
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.

                                       13
<PAGE>

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 February 13, 2002, the  Company's common stock  was accepted for quotation by
the NASD on the OTC Bulletin Board under the symbol MRDAF.

The Company's Corporate head office is located at 4F, Heungseong Bldg., 197-3,
Jamsil-Dong, Songpa-gu,  Seoul, Korea.

In  February 2004, the Company received an approval for a debt rescheduling plan
for  a  total  of $3,589,271 from Chooncheon District Court, Korea. The adjusted
period of payment is 3 to 7 years.

B. Business Overview
The  Company is engaged in the research, development, manufacturing and sales of
medical  devices  for the 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, Latin America, North America and to the Association of South East
Asian  Nations  (ASEAN).  The  Company  intends to continuously expand its sales
efforts in several countries through establishment of additional branch offices,
distributors,  and  sales  agencies.  The  Company  has sales agencies in Daegu,
Daejeon, Pusan, Gwangju in Korea and in California, U.S.A.

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 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. During 2002, the Company completed the
development  of  the  Composition Corpulence Curer as an aid in the reduction of
body fat.

On  September  26,  2001  the  Beijing  Meridian  Medical  Equipment  Co., Ltd.
(hereafter BMMEC)  was  established  to further pursue the Company's business in
China.  BMMEC is a joint corporation formed by Meridian Co., Ltd. and Mr. Trigon
Jung,  investor  and president of BMMEC. The main business of BMMEC is publicity
activities and setting up dealership networks for sales in China. Also, Meridian
is  planning  to  give  BMMEC  a  manufacturing  license for its products in the
future.  Meridian  has  made  over US $600,000 direct sales in China since 1999,
including  $2,330  during 2002.  Expected  sales  in China have not materialized
according  to  the Company's expectations, however, the Company will continue to
market  their  product to the Chinese market and is currently designing two more
products  for  release  in 2004.

                                       14
<PAGE>

The  Company  identified  the  United  States  as  a  significant  market  and
incorporated  Meridian America Medical Inc (MAMI) in the United States as a 100%
owned subsidiary of the Company, in February 2002, in preparation for the launch
of  the  Meridian products into the US market.  The Company has invested $53,587
in  expanding  into the U.S. market since inception. For the year ended December
31, 2002, the  Company achieved $360,449 in sales to the U.S. market and expects
a  further significant increase in sales to the United States in the  next year.
The  Company  initially  sold  3  meridian  lines  to  the  American market, the
Meridian II,  Meridian-Plus,  and  Meridian-Portable.  The  FDA  approved  the
ABR - 2000, an automatic whole body-screening device on August 14, 2002, and the
McPulse,  a  pulse waveform analyzer, on February  19, 2003.  The  Company  also
received the European CE Mark for the LAPEX-2000  on  March  19, 2002.

The  CE  (Conformities  European)  Marking  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.  These approvals
increase the product line the Company is able to market to  the  different world
markets,  and  will  hopefully  in  turn  increase sales.

South  Baylor University, one of the major Oriental Medical/ Acupuncture Schools
in  California,  is  home  to the South Baylor University Research Center. After
testing  initial  units  the research center placed an order for several more of
the  Meridian II. The Meridian II is a computer-assisted meridian assessment and
evaluation  device.  The  units  will be placed in their Anaheim and Los Angeles
campuses  as  training  equipment  for the Oriental Medical Intern Program. Both
campuses  are located in California, one of the largest Oriental and alternative
medical  States  in  the US.

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 any
energetically  unbalanced  points. It is believed that the energetic equilibrium
of  a  human  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 ailments.

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  early  and  to  treat it before the problem manifests itself. Using the
Meridian-II, the practitioner can 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.

                                       15
<PAGE>

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
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

                                       16
<PAGE>

     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

     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
The  MERIDIAN-Portable  is  structured  as  a  compact and transportable console
unit  separate from but packaged with the assistant computer.
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.

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

                                       17
<PAGE>

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  increases  blood  flow, vitalization of cells, and increases 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

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

                                       18
<PAGE>

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

-     Exam needed for preventing  geriatric  diseases.
-     Hardening  the arteries, arterial elasticity, and obstruction of periphery
      can  be  detected  in  early  stages.
-     The  Pulse  can  be  seen  while  analysing  the  pulse  waveform.
-     Not  harmful  to  the  human  body
-     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, and it can
analyze  heart  rate variability (HRV) from EKG data. The computer can store all
of  the  patient's data. The structure is configured with a 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 immune bodies &
diseases.  It utilizes  a  powerful  microscope using phase differences and dark
vision  to  assess a  person's blood and possibly detect the cause of functional
diseases.

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

VENUS 21C - COMPOSITION CORPULENCE CURER
Obesity Treatment Machine
This  product's  target  markets  include  plastic surgery, sports medicine, the
Oriental  medicine  clinic, and the Corpulence Clinic. This product obtained the
manufacturing approval in Korea in February 2004.

Features:   - Supersonic waves, low frequency
            - Various computer-programming modes to control frequency and
              intensity
              for sebaceous decomposition (Medical treatment solution)
            - The product includes a 10 x 4 inch color TFT LCD Touch Screen
              Display (safe and convenient)

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.

                                       19
<PAGE>

Industry Trends
Throughout  the  world,  the  medical  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 a report by Korea Medical Devices Industry Association, the size of
the Korean medical instrument industry was $976 million in 2000, showing a huge
increase from $325 million in 1991, and was estimated to be approximately
$1,600million in 2002. In 2001, over 750 companies manufactured medical
instruments in Korea and generated export revenue of $402million.A recent report
by the Korean Institute of Oriental Medicine states that until 2005, the trend
of the Korean medical instrument market is anticipated to show 10% annual growth
and the size of the market in 2005 is expected to be about $1.8 trillion.

World Market
The  size  of  the  world  medical  instrument  industry was estimated to be $45
billion  in  2000,  according to the Korean Institute. Its annual average growth
rate  has  been  approximately  2.5%. Oriental medical instruments and biorhythm
recorders  have  approximately  $5.4 billion and $4.6 billion of market share in
2000,  translating  to  approximately  4.7%  and 3.6% of the total world medical
instrument  market, respectively.  It is expected that by 2005 the total medical
instrument  market  will  show  3% annual growth and the size is estimated to be
$51.4 billion. In addition, the market share of Oriental medical instruments and
biorhythm recorders in 2005 will be about $7.6 billion and $6 billion, which are
6.1%  and  4.7%  of  the  total  world  medical  instrument  market accordingly.

C.  ORGANIZATIONAL  STRUCTURE
Meridian Co., Ltd. was incorporated under the laws of Korea on April 19, 1994 as
a private company.  The Company operates from its corporate headquarters located
at4F, Heungseong Bldg., 197-3, Jamsil-Dong, Songpa-Gu, Seoul, Korea and has a
manufacturing plant in Kangwon Province.


MANAGEMENT  TEAM
HYEON-SEONG  MYEONG, President, CEO and a Director
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.

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.

                                       20
<PAGE>

SUNGPIL HONG, Secretary and a Director
Mr. Hong  graduated from  Sin-Gu University in South Korea with Physiotherapy as
his major. From 1993 to 1995 he was the Business Manager for Dasin Medical Ltd..
From 1996 to 1998 he managed Hippo Medica Ltd.. From 1998 to the present, he was
the  Senior Manager for Meridian. On March 29, 2003, he was appointed a Director
of Meridian.

D. Property, Plants 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

A.  Operating Results

Year comparisons between 2003, 2002, and 2001
For the year ended December 31, 2003, the Company achieved sales revenues of
$ 2,894,559 resulting in a gross margin of $ 1,641,015 compared with sales
revenues of $3,521,657 that resulted in a gross margin of $1,605,846 for the
year ended December 31, 2002 and sales revenues of $5,289,561 that resulted in a
gross margin of $2,811,455 for the year ended December 31, 2001. The Company's
operating loss decreased to $1,441,696 in 2003 from a loss of $1,527,838 in
2002, but increased from a loss of $1,184,695 in 2001. The  decrease in the
operating loss in 2003 from 2002, in spite of the decreased sales revenue, was
due primarily to a reduction in cost of sales and operating expenses. The
overall increase in the operating loss over the three years from 2001 to 2003
was caused by economic uncertainty in South Korea and a slower then expected
sales growth in China and the United States. The increase in commissions is a
reflection of the Company's increased selling and marketing efforts. Total
selling, general and administrative expenses decreased to $3,082,711 for the
year ended December 31, 2003 from $3,133,684 for the year ended December 31,
2002 and from $3,996,150 for the year ended December 31, 2001. The Company spent
$227,078 on research and development for the year ended December 31, 2003 as
compared to $379,059 in 2002 and $555,865 in the year 2001. For the year ended
December 31, 2003 the Company recorded an inventory write-down due to a decline
in market value amounting to $4,188 as compared to $0 for 2002 and $140,936 for
2001.    In the same period, working capital slightly increased to $2,356,855 in
deficit in 2003 from working capital of $2,598,851 in deficit in 2002. However,
the working capital decreased by $2,831,474 in 2003 compared to the working
capital of $474,619 in 2001.  As of the year ended December 31, 2003, the
Company had an accumulated deficit of $8,384,693.

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 the 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.  The  Company's  land  and buildings were
pledged  as  collateral  for  the Company's short-term and long-term borrowings.
At December 31, 2003, the Company has a working capital deficiency of $2,356,855
(December 31, 2002 working capital deficit of $2,598,851).

                                       21
<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 18 registered patents at the Korea Industrial Property Office, 7
of  which  were  registered  during  2002.  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  summarized  in  the  following  table:


<TABLE>
<CAPTION>

TECHNOLOGY DESCRIPTION          REGISTRATION NUMBER  DATE OF REGISTRATION
------------------------------  -------------------  --------------------
<S>                             <C>                  <C>
Nervature analysis device . .               0368021  December  - 02
------------------------------  -------------------  --------------------
Pulsecare . . . . . . . . . .               0538120  December - 02
------------------------------  -------------------  --------------------
Mcview . . . . . . . . . . . .              0531965  October - 02
------------------------------  -------------------  --------------------
Electrode holder for
laser treatment . . . . . . .                302314  June - 02
------------------------------  -------------------  --------------------
Electrode for laser treatment               0302315  June - 02
------------------------------  -------------------  --------------------
McPulse . . . . . . . . . . .            2002-29908  June - 02
------------------------------  -------------------  --------------------
Biomeridian . . . . . . . . .               0522196  June - 02
------------------------------  -------------------  --------------------
Lapex . . . . . . . . . . . .                500915  September - 01
------------------------------  -------------------  --------------------
Hemoscope . . . . . . . . . .            2001-38478..August - 01
------------------------------  -------------------  --------------------
Laser beam irradiation
device . . . . . . . . . . . .           2001-35814..July - 01
------------------------------  -------------------  --------------------
Pulseview . . . . . . . . . .            2001-21430..May - 01
------------------------------  -------------------  --------------------
Pulsetron . . . . . . . . . .            2001-21431..May - 01
------------------------------  -------------------  --------------------
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>

                                       22
<PAGE>

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  personnel.  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 personnel.

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 of clinical safety for 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
                                                ABR-2000,McPulse

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>

D. Trend information

The operations of the Company have been significantly affected, and may continue
to  be  affected  for  the  foreseeable future, by the general unstable economic
conditions  in  Korea  and  in  the  Asia Pacific region. The curtailed economic
activity  in the Company's traditional markets resulted in a significant decline
in  the  Company's  sales,  production  and  inventory.  The Company is actively
seeking  to  expand  its  sales into new markets, principally the United States.

E.  Off-balance sheet arrangements
Not applicable

F.  Tabular disclosure of contractual obligations

<TABLE>
                                                Payments due (by period)
                                                   Less than                           more than
<S>                                     <C>          <C>         <C>          <C>        <C>
Contractual Obligations . . . . . . . .   Total      one year    1-3 years    3-5 years   5 years
Long-term debt obligations . . . . . . $1,733,143    $ 80,765            -     $829,896   $741,717
Debentures . . . . . . . . . . . . . . $1,252,233           -            -           -  $1,252,296
Long-term accounts payable . . . . . .   $105,474           -      $70,316      $35,158-         -
Retirement and severance indemnities. .  $140,697     unknown*     unknown*     unknown*  unknown*
</TABLE>

                                       23
<PAGE>

*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  according to the National Pension Law of Korea for employees
with  more  than  one  year of service and who are entitled to receive severance
indemnities,  based  on  length  of service and rate of pay, upon termination of
their  employment.


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  according to the National Pension Law of Korea for employees
with  more  than  one  year of service and who are entitled to receive severance
indemnities,  based  on  length  of service and rate of pay, upon termination of
their  employment.

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               Stock option

                       2001      45,500  Nil        Nil               Stock Option

                       2002      47,541  Nil        Nil               Nil

                       2003      49,329  Nil        NIl               NIl
Park, Sang - yeul
(Director of ManufacturingA ffairs)

 . . . . . . . . . .   1998      Nil     Nil        Nil               Nil

                       1999      Nil     Nil        Nil               Nil

                       2000      42,000  Nil        Nil               Stock option

                       2001      39,000  Nil        Nil               Stock option

                       2002      37,357  Nil        Nil               Nil

                       2003      42,282  Nil        Nil               Nil

Hong, sung Phil
(Director and Secretart)
 . . . . . . . . . .   2003      39,262  Nil        Nil               Nil

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

                       2002  Nil         Nil        Nil               NIl

                       2003  Nil         Nil        Nil               NIl

*Hyeon Seong Myeong was granted options for 4,130 shares of the Company's common
stock at the price of  $0.88 in February 2000 and for 2,218 shares at the price
of 680 Won (approximately $0.52)  in March 2001.  Sang Yeul Park was granted
options for 3,097 shares at the price of 1,000 Won in February 2000 and for
1,849 shares at the price of 680 Won in March 2001.

</TABLE>

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.

                                       24
<PAGE>

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.

C. Board practices

Not applicable

D. Employees

The Company has 19 employees in the following areas:

<TABLE>

Area                             Department                     Team Name                      Number of Staff
<S>                      <C>                          <C>                                              <C>
Seoul, Korea             Administration department     The ministry of Finance and Economy               3
                         Business Headquarters         sales  Department                                 2
                                                       Customer Support Team                             2
                                                       Marketing Team                                    1
                                                       Clinical Team                                     1
                                                       Business administration team                      1
                         Research Institute                                                              2
Hong Chun, Korea         Production Department         Manufacturing Technical Team                      5
                                                       Purchasing Team                                   1
                                                       Guality Guarantee Team                            1
Total                                                                                                   19
The president excepted in employee's number, and head count is 27 with  Hyeon-seong Myeong

</TABLE>

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

                                       25
<PAGE>

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.

On  February  23,  2000,  the  Company  granted  stock  options to its executive
officers,  directors  and  16 employees to purchase 496,850 shares of its common
stock  at  a  price  of  $0.88 per share. 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 options 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 December 31, 2003, after
taking  into  effect  the  Acquisition  and  the Stock Split of: (a) each of the
Company's  directors  and officers,  and  (b)  all directors and officers of the
Company, as a group:

                                       26
<PAGE>

<TABLE>
<CAPTION>

Name and address of beneficial owner           Amount Stock          Percentage of           Percentage of
and position with the company              Beneficially Owned    Class as of Dec.31,2003    Class as of June 30, 2004

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

Myeong, Hyeong-seong. . . . . . . . .  971,500 common shares              5.07%                   4.32%
(President, CEO and Director)
#997-4 Daechi-dong
Gangnam-gu, Seoul, Korea

Park, Sang-yeul (Director). . . . . .   87,500 common shares              0.46%                   0.39%
687-6 Sangoan-ri, Hongchun-eup,
 Hongchun- kun, Kangwon-do, Korea

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

--------------------------------------------------------------------------------------------------------
All officers and Directors as a Group  1,059,000                          5.53%                    4.71%
</TABLE>

On June 8, 2004, the Company issued 3,312,500 common shares for US$530,000.00
received by the Company from individuals. The total number of issued and
outstanding shares is 22,463,984.



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 December 31, 2003 and June 30, 2004), by each
person  known  to  us  to  own  beneficially  more than five percent (5%) of our
shares.

                                       27
<PAGE>

<TABLE>
<CAPTION>
Name and address                                  Amount Stock    Percentage of Class   Percentage of Class    Number of
                                            Beneficially Owned     of Dec.31,2003       of June 30,2004     Stock Option Held

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

Terasource Kosdaq Venture Investment.
8FR Dongshin Bldg. 141-30   . . . . .        2,066,700 common shares             12.03%                 9.20%          Nil
Samseong-dong, Kangnam-gu Seoul Korea

Terasource Venture Investment Capital
8FR Dongshin Bldg. 141-30   . . . . . .        403,900 common shares              2.35%                 1.80%          Nil
Samseong-dong, Kangnam-gu Seoul, Korea

Terasource Venture Capital Fund 2
8FR Dongshin Bldg. 141-30 . . . . . .        1,070,270 common shares              6.23%                 4.76%          Nil
Samseong-dong, Kangnam-gu Seoul, Korea

Terasource Venture Capital Fund 3
8FR Dongshin Bldg. 141-30 . . . . . .        1,551,350 common shares              9.03%                 6.91%          Nil
Samseong-dong, Kangnam-gu Seoul, Korea

Terasource Venture Capital Fund 4
8FR Dongshin Bldg. 141-30 . . . . . . .        378,380 common shares              2.20%                 1.68%          Nil
Samseong-dong, Kangnam-gu Seoul, Korea

The Hong Group of Companies
including:
Serome Investment Co. Ltd. (1,085,675shares),
151-7 Samseong-Dong ; . . . . . . . . .       3,325,900 common shares             19.36%               14.81%          Nil
Kangnam-Gu Seoul Korea
Mok-Won Assets Management Co. Ltd
(1,375,000 shares),2004 Ho, Anam tower 702-10
Yuksam-dong Kangnam-ku, Seoul, Korea;
Bio & Medical Research Co. Ltd. (524,425 shares),
702-10 Yuksam-dong, Kangnam-ku, Seoul, Korea;
Ki-tae Hong (127,800 shares) and Hye-sook Lee
(213,000 shares)151-7 Samseong-Dong, Kangnam-Gu,
Seoul, Korea

Myoung, Hyeong Seong                            971,500 common shares              5.07%                4.32%       6,348
(President, CEO and Director
#997-4 Daechi-dong, Gangnam-gu,
Seoul, Korea

Hsiu Chen Cheng                                1,450,000 common shares                0%                6.45%         Nil
12F, No. 388 Chun Shan E. Rd.,                     as of June 30, 2004
Taipei, Taiwan

Qi Ai                                           1,375,750 common shares               0%                6.12%         Nil
Fei Tai Lian Hua Chi Xi Zi, Beijing, China          as of June 30 2004

                                       28
<PAGE>

</TABLE>

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.

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.
The transactions between the Company and its subsidiaries are disclosed in the
Note 14 to the consolidated financial statements, page 67.

Item 8. Financial Information

A. Consolidated  Statements  and  Other  Financial  Information
See "Item  18- Financial  Statements"

Legal  Proceedings
On February 27, 2004, the Company received approval for a debt rescheduling plan
for  a  total of $3,589,271 from the Chooncheon District Court, Korea, whereby a
group  of creditors of the Company and a representative of the Company agreed to
reschedule  the  payments  on  $3,589,271 of the Company's debt which constitute
approximately  68%  of  the total outstanding accounts payable and borrowings of
the  Company.  An  application  for the rescheduling plan was subsequently filed
with Chooncheon District Court and approved by the court on the same day.

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.

B. Significant Changes
At an extraordinary general meeting of shareholders of the Company, on April 27,
2004, it was approved that the par value of the common stock of the Company be
reduced from 200 Korean Won per share (equivalent to US$0.17 per share) to 100
Korean Won per share (equivalent to US$0.09 per share). The new par value was
registered with the Korean registrar of companies on June 1, 2004 and will be
effective as of July 1, 2004.
The Company received funds of US$530,000.00 from investors through an equity
financing whereby, on June 8, 2004 the Company issued 3,312,500 shares of common
stock ($ 0.16 per share). Share issue costs of $ 26,500 were paid in connection
with the financing. The stock issued is restricted from trading for one year.

                                       29
<PAGE>

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 stock 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 stock 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").

B. Memorandum and Articles of Association
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  December  31,  2003  there were 19,151,854 shares of the Company's stock
issued  and outstanding, and as of June 30, 2004, there are 22,463,984 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 ratably 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,  preemptive 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.

                                       30
<PAGE>


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.

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  th e 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

                                       31
<PAGE>

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
preemptive  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.

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 o f 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.

                                       32
<PAGE>

Registration of Shareholders and Record Date
Pacific  Corporate Trust Company of Vancouver BC Canada ("Pacific Corporate") is
the  Company's  sole transfer agent. Pacific Corporate maintains 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.

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.

                                       33
<PAGE>

C.  Material contracts
None

D.  Exchange Controls
General

The  Foreign  Exchange  Transaction Law of Korea and the Presidential Decree and
regulations  established  thereunder  (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  amount
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.

                                       34
<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 o f 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.

                                       35
<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.

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;

                                       36
<PAGE>

-     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


I.     SUBSIDIARY  INFORMATION
See  Item  18.  Notes  to  Financial  Statements

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.

                                       37
<PAGE>

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. The details of the
debt  restructuring  of the Company, which is disclosed in Item 8. and Note 1 to
the  consolidated financial statements in this report, were reported in the form
6-K filed on March 28, 2004.

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

ITEM  15. Controls and Procedures
----------------------------------
Based on their evaluation as of a date within 90 days of the filing date of this
Annual  Report  on  Form 20-F, the principal executive officers and directors of
the  Company  have  concluded that the disclosure controls and procedures of the
Company  as  defined in  240.13a-15(c) and 240.15d-15(c) of the Securities
Exchange Act of 1934 (the Exchange Act) are effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission's rules and
forms.
There were no significant changes in internal controls or in other factors of
the Company that could significantly affect these controls subsequent to the
date of their evaluation and up to the filing date of this Annual Report on
Form 20-F. There were no significant deficiencies or material weaknesses, and
therefore no corrective actions were taken or may occur and not be detected.


ITEM  16. Audit Committee Financial Expert
-------------------------------------------
The Company does not yet have an audit committee financial expert.

Item 16B.  Code of Ethics
--------------------------
The  Company does not have in place a written code of ethics that applies to its
executive,  financial  or  accounting  officers or to persons performing similar
functions.  The  Company  is dependent upon its president to lead by example and
has  faith  in  his  ability  to do so. The Company does not plan to grant any
waiver, including an implicit waiver, from a provision of the code of business
conduct and ethics to any person.

Item 16C.  Principal Accountant Fees and Services
--------------------------------------------------
(a)Audit Fees
During the last two fiscal years, the Company paid $80,602.31 for professional
services rendered by the former auditors for the audit of the Company's annual
financial statements or services normally provided in connection with statutory
and regulatory filings for those fiscal years.
(b)Audit-Related Fees
During the last two fiscal years, the Company paid $nil for professional
services rendered by the current or former auditors for audit-related services..

                                       38
<PAGE>

(c)Tax Fees
During the last two fiscal years, the Company paid $nil for professional
services rendered by the principal accountant for tax compliance, tax advice and
tax planning.
(d)All Other Fees
During the last two fiscal years, the Company paid $nil for professional
services rendered by the principal accountant for services other than those
described under (a) through (c).
(e) The Company's board of directors is currently acting as the audit committee.
The board approves all of the services provided by the principal accountants.
(f)Percentage of work performed by persons other than the principal accountant's
full-time, permanent employees: 0%

Item 16D.  Exemptions from the Listing Standards for Audit Committees
----------------------------------------------------------------------
Not Applicable

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
--------------------------------------------------------------------------------
Not Applicable

Part III

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

ITEM  18.  FINANCIAL  STATEMENTS
--------------------------------

Meridian Co., Ltd.

CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2003, 2002 and 2001

Table of Contents


Independent Auditors' Report                                                  39

Consolidated Balance Sheets                                                   42

Consolidated Statements of Operations and Comprehensive income                45

Consolidated Statements of Stockholders' Equity                               47

Consolidated Statements of Cash Flows                                         48

Notes to consolidated Financial Statements                                    52

                                       39
<PAGE>


MERIDIAN CO., LTD.

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2003, 2002 and 2001

with

INDEPENDENT AUDITORS' REPORT




Shinhan Accounting Corporation

                                       40
<PAGE>

AUDITORS' REPORT TO THE DIRECTORS OF:
MERIDIAN Co., Ltd.

We  have  audited  the  accompanying consolidated balance sheet of Meridian Co.,
Ltd.  ("the Company")  and  its  subsidiaries  as  of  December 31, 2003 and the
related consolidated statements of operations and comprehensive loss, statements
of chages in shareholder's equity and cash flows for the year then ended. These
consolidated financial  statements  are  the  responsibility  of  the  Company's
management. Our responsibility  is  to express an opinion on these financial
statements based  on our audit.  The  accompanying financial statements for the
years ended December 31,  2002  and  2001  were  audited by other auditors whose
report dated May 14, 2003, expressed an unqualified opinion  thereon,  including
an  explanatory paragraph describing conditions that  raised  substantial  doubt
about  the Company's ability to continue as a going concern.

We conducted our audit 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  audit  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, 2003, 2002 and 2001, and the results of
its  operations  and  its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.


Without qualifying our opinion, we draw your attention to the following matters.

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 has suffered recurring losses
and  negative  cash  flows  from  operations  since  inception  and  has current
liabilities which significantly exceed its current assets that raise substantial
doubt  about  its  ability  to  continue  as  a  going concern. The consolidated
financial  statements  do not include any adjustments that might result from the
outcome of this uncertainty. Management's plans in regards to these matters  are
described in Note 1.

Certified Public Accountant
Republic of Korea
April 2, 2004 except for Note 20 (a) which is as of April 27, 2004 and Note 20
(b) which is as of June 8, 2004

Il-Heung bldg. Suite #8
126-1 ChungMu-Ro 4Ka, Chung-Ku
Seoul, Korea

                                       41
<PAGE>


NEXIA INTERNATIONAL
SAMDUK ACCOUNTING CORPORATION

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, 2002 and 2001 and
the related consolidated statements of operations and comprehensive loss,
changes in shareholders' equity and cash flows for each of the two years in the
period ended December 31, 2002. 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, 2002 and 2001 and the results of their
operations and their cash flows for each of the two years in the period ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.

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 has suffered recurring losses
from operations and has net capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The outcome of the Company's
financing efforts cannot presently be predicted. The consolidated financial
statements do not contain any adjustments that might result from the outcome of
this uncertainty.

As discussed in Note 21 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 subsidiary. 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.

SamDuk Accounting Corporation
May 14, 2003


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

                                       42
<PAGE>

<TABLE>
<CAPTION>
                                      MERIDIAN CO., LTD.
                                  CONSOLIDATED BALANCE SHEETS
                             As of December 31,2003, 2002 and 2001
                                       (in U.S. dollars)



A S S E T S                                                          2003            2002          2001
---------------------------------------------------------------   ----------     ------------  ------------
<S>                                                                <C>            <C>           <C>
Current assets :
  Cash and cash equivalents . . . . . . . . . . . . . . . . . .  $   31,557     $   128,674   $   105,216
  Short-term investments(Note 9). . . . . . . . . . . . . . . .           -         189,760       841,476
  Accounts receivable - trade, net of allowance for doubtful
    accounts of $128,403,$1,505,409 and $863,327, respectively      405,471       1,058,953     1,759,821
  Short-term loans-net (Note 3) . . . . . . . . . . . . . . . .      52,426          62,810        89,798
  Accounts receivable - other  . . . .  . . . . . . . . . . . .         744          15,326        20,231
  Inventories (Note 4). . . . . . . . . . . . . . . . . . . . .     700,166         702,097     1,187,989
  Other current assets (Note 5) . . . . . . . . . . . . . . . .      32,909          46,455       123,414
                                                                 ----------    ------------  ------------

    Total current assets. . . . . . . . . . . . . . . . . . . .   1,223,273       2,204,075     4,127,945
                                                                 ----------    ------------  ------------

Investments and other assets
  Investments (Note 6). . . . . . . . . . . . . . . . . . . . .      18,897          45,293        41,216
  Long-term and restricted bank deposits. . . . . . . . . . . .      33,448          11,633        80,929
  Long-term loans-net (Note 3). . . . . . . . . . . . . . . . .           -               -       220,672
  Guaranty deposits . . . . . . . . . . . . . . . . . . . . . .      88,229         133,391        90,836
                                                                    -------    ------------  ------------

    Total . . . . . . . . . . . . . . . . . . . . . . . . . . .     140,574         190,317       433,653
                                                                   --------    ------------  ------------

Property, plant and equipment - net (Note 7)
  Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     778,843         782,355       706,591
  Buildings . . . . . . . . . . . . . . . . . . . . . . . . . .     574,831         580,404       524,198
  Furniture and fixture . . . . . . . . . . . . . . . . . . . .     647,313         680,627       752,628
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . .     137,697         126,399       142,675
                                                                  ---------    ------------  ------------
                                                                  2,134,684       2,169,785     2,126,092
  Less accumulated depreciation . . . . . . . . . . . . . . . .    (934,217)       (820,559)     (670,797)
                                                                  ---------    ------------  ------------

    Net . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,200,467       1,444,278     1,455,295
                                                                 ----------    ------------  ------------

Intangible assets
  Patents and trademarks. . . . . . . . . . . . . . . . . . . .       1,684           2,161           932
                                                                    -------    ------------  ------------

    TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . $  2,565,998    $ 3,749,507   $ 6,017,825
                                                                ============   ============  ============

                                       43
<PAGE>


(Continued)
MERIDIAN CO., LTD.

CONSOLIDATED BALANCE SHEETS, CONTINUED
As of December 31,2003 2002 and 2001
(in U.S. dollars)


LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . . . . .            2003           2002           2001
---------------------------------------------------------------         ----------     ---------     ---------

Current liabilities
  Accounts payable - trade. . . . . . . . . . . . . . . . . . .        $   649,796   $   625,593   $   965,502
  Short-term borrowings (Notes 8) . . . . . . . . . . . . . . .          1,230,970     1,671,246     1,587,573
  Accounts payable - other. . . . . . . . . . . . . . . . . . .          1,244,030     1,024,185       636,342
  Current portion of long-term debt (Notes 1, 9). . . . . . . .             80,765     1,276,718       251,535
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . .            378,295       205,184       212,374
                                                                       ------------  -----------  ------------

    Total current liabilities . . . . . . . . . . . . . . . . .          3,583,856     4,802,926     3,653,326
                                                                       ------------  -----------  ------------

Long-term borrowings (Note 1,9) . . . . . . . . . . . . . . . .          2,904,674       779,120     1,094,057
Long-term accounts payable-other . . . .  . . . . . . . . . . .            105,474        56,784        90,207
Retirement and severance indemnities-net (Note 10). . . . . . .            140,697       138,909       247,701
                                                                       -----------  ------------  ------------

    Total liabilities . . . . . . . . . . . . . . . . . . . . .          6,734,701     6,198,015     6,221,739
                                                                      ------------  ------------  ------------

Commitments and contingencies (Note 13)                                          -             -             -

Minority interest . . . . . . . . . . . . . . . . . . . . . . .                  -             -         6,593
                                                                      ------------  ------------  ------------

Shareholders' equity
  Common stock - par value $0.17 per share : issued and
    outstanding  17,182,583 shares and 15,899,875 shares
    as of December 31,2003, 2002 and 2001 (Note 11) . . . . . .          3,567,959     3,233,026     3,011,984
  Additional paid-in capital. . . . . . . . . . . . . . . . . .            951,099       901,099       817,769
  Appropriation for business rationalization(Note 12) . . . . .            206,286       223,385       224,659
  Accumulated deficit . . . . . . . . . . . . . . . . . . . . .         (8,384,693)   (6,219,635)   (3,869,737)
  Accumulated other comprehensive loss. . . . . . . . . . . . .           (455,626)     (586,508)     (395,182)
                                                                      ------------  ------------  ------------

    Total shareholders' equity  . . . . . . . . . . . . . . . .          4,164,975    (2,448,508)     (210,507)
                                                                      ------------  ------------  ------------

    TOTAL LIABILITIES AND
       SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . .          2,569,726   $ 3,749,507   $ 6,017,825
                                                                      ============  ============  ============


See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       44
<PAGE>

<TABLE>
<CAPTION>
                          MERIDIAN CO., LTD.
        CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
           For the years ended December 31, 2003, 2002 and 2001
                          (in U.S. dollars)

                                                                     2003           2002           2001
                                                                 -------------  -------------  ------------
<S>                                                              <C>            <C>            <C>

Sales
  Product . . . . . . . . . . . . . . . . . . . . . . . . . . .   $2,894,559    $  3,521,657   $  5,289,561

Cost of sales
  Cost of goods sold. . . . . . . . . . . . . . . . . . . . . .    1,249,356      1,915,811      2,337,170
  Inventory write-down due to decline in market value (Note 2h)        4,188              -        140,936
                                                                 -------------  -------------  ------------
                                                                   1,253,544       1,915,811      2,478,106
                                                                 -------------  -------------  ------------

Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . .   $1,641,015       1,605,846      2,811,455
                                                                 -------------  -------------  ------------

Selling, general and administrative expenses
  Advertising . . . . . . . . . . . . . . . . . . . . . . . . .       44,503          62,944         94,664
  Bad debt expense. . . . . . . . . . . . . . . . . . . . . . .      900,334         615,688        791,118
  Commissions. . . . . . . .. . . . . . . . . . . . . . . . . .      815,854         653,937        518,484
  Depreciation. . . . . . . . . . . . . . . . . . . . . . . . .      117,752          69,251        103,026
  Employee benefit. . . . . . . . . . . . . . . . . . . . . . .       72,005         108,501        163,351
  Entertainment . . . . . . . . . . . . . . . . . . . . . . . .       22,191          41,672        135,333
  Overseas market development . . . . . . . . . . . . . . . . .       12,768          95,773         96,664
  Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       79,012          78,402         65,618
  Research and development. . . . . . . . . . . . . . . . . . .      227,078         379,059        555,865
  Salaries. . . . . . . . . . . . . . . . . . . . . . . . . . .      469,708         585,393        854,137
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . .      321,506         443,064        617,890
                                                                 -------------  -------------  ------------
                                                                   3,082,711       3,133,684      3,996,150
                                                                 -------------  -------------  ------------

Operating loss. . . . . . . . . . . . . . . . . . . . . . . . .   (1,441,696)    (1,527,838)    (1,184,695)
                                                                 -------------  -------------  ------------

Other income
  Interest income . . . . . . . . . . . . . . . . . . . . . . .        9,986          27,271         60,520
  Gain on disposal  of investment securities. . . . . . . . . .            -               -         41,372
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,900          57,147         87,033
                                                                 -------------  -------------  ------------
                                                                      11,886          84,418        188,925
                                                                 -------------  -------------  ------------
Other expenses
  Interest expense. . . . . . . . . . . . . . . . . . . . . . .      396,290         393,138        360,239
  Non-trade bad debt expense. . . . . . . . . . . . . . . . . .      328,451         895,509        460,889
  Write off of goodwill . . . . . . . . . . . . . . . . . . . .            -               -         30,020
  Equity in loss of investee    . . . . . . . . . . . . . . . .       26,510          99,506         18,765
  Loss on bankruptcy of a Subsidiary. . . . . . . . . . . . . .       19,175               -         10,212
  Others . . . . . . . . . . . . . . . . . . . . . . . . . . . .      43,268         173,051         59,529
                                                                 -------------  -------------  ------------
                                                                     813,694       1,461,698        939,442
                                                                 -------------  -------------  ------------

Minority interest in net loss of consolidated affiliates. . . .            -               -         19,302
                                                                 -------------  -------------  ------------

Loss before provision for income taxes. . . . . . . . . . . . .   (2,243,504)    (2,905,118)    (1,905,910)

  Income tax expense (Note 15). . . . . . . . . . . . . . . . .            -              -              -
                                                                 -------------  -------------  ------------
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (2,243,504)    (2,289,825)    (1,916,122)

Other comprehensive loss
  Foreign currency translation gain(loss) . . . . . . . . . . .      100,780       (161,224)       (26,236)
                                                                               -------------  -------------
Comprehensive loss. . . . . . . . . . . . . . . . . . . . . . .  ($2,142,724)   ($2,451,049)   ($1,942,358)
                                                                               =============  =============

Weighted average number of common shares. . . . . . . . . . . .   18,094,211      16,472,700     15,703,850
                                                                =============  =============  =============

Basic and diluted loss per common share
  Net loss                        . . . . . . . . . . . . . . .        (0.12)        ($0.18)        ($0.12)

See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       45
<PAGE>

<TABLE>
<CAPTION>
                                                       MERIDIAN CO., LTD
                                                    CONSOLIDATED STATEMENTS
                                              OF CHANGES IN SHAREHOLDERS' EQUITY
                                       For the years ended December 31, 2003, 2002 and 2001
                                                       (in U.S. dollars)


                                      Common Stock Issued                                         Accumulated
                                      ------------------- 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>
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 common shares . . . . . 1,703,550    270,620    (270,620)
Net loss                                                                             (1,916,122)                     (1,916,122)
Other comprehensive income (loss):
  Foreign currency translation gain                                                                   (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)
Issuance of common shares . . . . . 1,282,708    221,042     78,958                                                     300,000
Changes in interest of subsidiary .                           4,372                                                       4,372
Net loss                                                                             (1,916,122)                     (1,916,122)
Other comprehensive income (loss):                                                                                            -
  Foreign currency translation gain                                                                  (161,224)         (161,224)
Reclassification adjustment pursuant                                                                                          -
  to legal appropriation requirement                                      (3,732)         3,732                               -
                                    ----------    ---------  -------    -----------    ----------    --------      ---------------

Balance at December 31, 2002. . . .17,182,583  3,233,026    901,099      220,927     (6,155,830)     (556,406)       (2,357,184)
Issuance of common shares . . . .   1,968,901    334,933 .                                                              334,933
Net loss                                                                             (2,243,504)                     (2,243,504)
Other comprehensive income (loss):                                                                                            -
    Foreign currency translation gain                                                                 100,780           100,780
    Unrealized holding gain                                                                                                   -
Reclassification adjustment pursuant                                                                                          -
     to legal appropriation requirement . . .                            (14,641)        14,641                               -
                                    ----------    ---------  -------    -----------    ----------    --------      ---------------
Balance at December 31, 2003. . .  19,151,484 $3,567,959   $901,099     $206,286    $(8,384,693)    $(455,626)      $(4,164,975)
                                   ========== ===========  ========== ============= ============  ===============   =============

See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       46
<PAGE>

<TABLE>
<CAPTI0N>

                                            MERIDIAN CO., LTD
                                         CONSOLIDATED STATEMENTS
                                   OF CHANGES IN SHAREHOLDERS' EQUITY
                            For the years ended December 31, 2002, 2001 and 2000
                                             (in U.S. dollars)

                                                                         2003           2002           2001
                                                                     -------------  -------------  ------------
<S>                                                                  <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES :
  Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . .   ($2,243,504)   ($2,289,825)  ($1,916,122)
                                                                     -------------  -1-----------  ------------
  Add (deduct) items not using (providing) cash
    Depreciation and amortization . . . . . . . . . . . . . . . . .       117,752         39,954       103,026
    Depreciation expense included in cost of goods sold . . . . . .       129,843         85,754       100,711
    Provision for severance indemnities . . . . . . . . . . . . . .        62,700         89,912       120,972
    Provision for doubtful accounts . . . . . . . . . . . . . . . .     1,228,785      1,511,197     1,252,007
    Service fees by issuing common shares . . . . . . . . . . . . .       334,933        300,000             -
    Inventory write-down due to decline in market value . . . . . .         4,811              -       140,936
    Gain on disposal of subsidiaries. . . . . . . . . . . . . . . .                     (615,293)            -
    Equity in loss of investee . . . . . . . . . . . . . . . . . .         26,510              -        18,765
    Gain on sale of investment securities . . . . . . . . . . . . .             -              -       (41,372)
    Decrease (increase) in accounts receivable - trade. . . . . . .      (246,852)       339,678       100,475
    Decrease (increase) in accounts receivable - other. . . . . . .       328,397        (53,263)      191,914
    Decrease (increase) in inventory. . . . . . . . . . . . . . . .        (6,608)       305,846      (387,744)
    Decrease (increase) in other current assets . . . . . . . . . .        13,546         53,703        35,629
    Increase (decrease) in accounts payable - trade . . . . . . . .        24,203       (364,415)     (210,125)
    Increase (decrease) in accounts payable - other . . . . . . . .       219,845        355,161       168,607
    Increase (decrease) in other current liabilities. . . . . . . .       173,111           (926)       56,301
    Increase in long-term accounts payable - other. . . . . . . . .        48,690        (41,163)      (39,528)
    Retirement and severance payment. . . . . . . . . . . . . . . .       (60,912)      (190,294)      (31,961)
    Minority interest in net loss of consolidated affiliates. . . .       (11,995)             -       (19,302)
    Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      100,018        28,179
                                                                     -------------  -------------  ------------
       Sub-total. . . . . . . . . . . . . . . . . . . . . . . . . .    $1,729,965     $1,915,869    $1,568,725
                                                                     -------------  -------------  ------------

                                                                         $513,539)    ($ 373,956)   ($ 347,397)
                                                                     -------------  -------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES :
  Decrease in short-term loans. . . . . . . . . . . . . . . . . . .       331,480             -         37,023
  Proceeds from sale of investment securities . . . . . . . . . . .             -             -         74,137
  Decrease in long-term and restricted bank deposits. . . . . . . .        11,633        74,477         24,123
  Decrease in long-term loans . . . . . . . . . . . . . . . . . . .             -        20,129              -
  Decrease in short-term investments. . . . . . . . . . . . . . . .       189,760       708,370              -
  Increase in short-term investments. . . . . . . . . . . . . . . .                           -       (852,273)
  Increase in short-term loans. . . . . . . . . . . . . . . . . . .      (321,096)      (169,506)     (201,781)
  Acquisition of investment securities. . . . . . . . . . . . . . .             -              -       (59,501)
  Disposition of property, plant and equipment . . . . . . . . . . .                      23,419             -
  Acqusition of property, plant and equipment. . . . . . . . . . . .          (95)       (47,442)      (64,282)
  Cash held by former subsidiaries. . . . . . . . . . . . . . . . .       (10,251)       (12,464)            -
  Decrease in guaranty deposits . . . . . . . . . . . . . . . . . .        45,162              -             -
  Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -        (85,148)       12,581
                                                                     -------------  -------------  ------------
                                                                         $246,593        511,835     (1,029,973)
                                                                     -------------  -------------  ------------

                                       47

CASH FLOWS FROM FINANCING ACTIVITIES :
  Increase in short-term borrowings . . . . . . . . . . . . . . . .                      158,700     1,360,659
  Increase in long-term borrowings. . . . . . . . . . . . . . . . .                            -       209,242
  Proceeds from issuance of debentures. . . . . . . . . . . . . . .                            -     1,150,646
  Repayment of short-term borrowings. . . . . . . . . . . . . . . .      (707,045)             -    (1,209,833)
  Repayment of current portion of long-term debt. . . . . . . . . .      (118,608)      (264,569)     (416,991)
  Repayment of long-term borrowings . . . . . . . . . . . . . . . .      (286,008)             -             -
                                                                     -------------  -------------  ------------

                                                                          $69,049       (105,869)     1,093,723
                                                                     -------------  -------------  ------------

NET INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . . . .      (197,897)        32,010       (283,647)
                                                                     -------------  -------------  ------------

EFFECT OF EXCHANGE RATE ON CASH . . . . . . . . . . . . . . . . . .       100,780         (8,552)        (9,762)

CASH AT BEGINNING OF THE PERIOD . . . . . . . . . . . . . . . . . .      $128,674        105,216        398,625
                                                                     -------------  -------------  ------------

CASH AT END OF THE PERIOD . . . . . . . . . . . . . . . . . . . . .       $31,557       $128,674       $105,216
                                                                     =============  =============  ============

 Cash and cash equivalents are comprised of :
    Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $31,557        $16,770        $10,682
    Term deposits . . . . . . . . . . . . . . . . . . . . . . . . .            $0        111,904         94,534
                                                                     -------------  -------------  ------------
                                                                          $31,557       $128,674       $105,216
                                                                     =============  =============  ============
</TABLE>
                                       48
<PAGE>

See accompanying Notes to Consolidated Financial Statements

1. Going Concern

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 medical equipment for sale in domestic and overseas
markets.

The  Company  has  suffered  recurring  losses  and  negative  cash  flows  from
operations  since  inception  and  has  current  liabilities which significantly
exceed  its  current  assets  that  raise substantial doubt about its ability to
continue  as  a  going  concern.  The  consolidated  financial statements do not
include  any adjustments that might result from the outcome of this uncertainty.

For  the fiscal year ended December 31, 2003, the Company incurred a net loss of
$2,243,504  ($2,289,825  for 2002 and $1,916,122 for 2001) and net negative cash
flow  from  operating activities of $513,539 ($373,956 for 2002 and $347,397 for
2001). On August 4, 2003, the Company's banking privileges were suspended on its
accounts  of  credit/bill  by  the  KFTC  (Korea  Financial Telecommunications &
Clearings  Institute)  ,  which  was established as a non-profit organization to
build  up  and  operate  the  Financial  Information  Network  Systems(FINS)  by
integrating  the  Korea  Clearing  &  Credit Reporting Center in charge of check
clearing  systems and the Korea Bank Giro Center in charge of bank giro systems.

Subsequently  on  February  27,  2004,  the Company received approval for a debt
rescheduling  plan for a total of $3,589,271 from the Chooncheon District Court,
Korea,  whereby  a group of creditors of the Company and a representative of the
Company  agreed  to  reschedule the payments on $3,589,271 of the Company's debt
which constitute approximately 68% of the total outstanding accounts payable and
borrowings  of  the  Company.  An  application  for  the  rescheduling  plan was
subsequently  filed  with Chooncheon District Court and approved by the court on
the  same  day.  The group of creditors who have agreed to the debt rescheduling
includes the following.

     Creditor                                         Amount of debt rescheduled
Woori Bank                                                             $301,375
SMI II ABS Specialty Co., Ltd                                           769,231
Rainbow Specialty Securitization Co., Ltd                               384,615
Korea Technology Credit Guarantee Fund                                  862,177
Small Business Corporation                                              230,769
Korea Foreign Exchange Bank                                              96,162
Shinhan Bank                                                             32,008
Other                                                                   912,934
Total                                                                $3,589,271


Of  the $3,589,271, $26,323 is secured debt to a financial institutiona and will
now  be  repaid  over 7 years from 2007 to 2013; the Company will be exempt from
paying  interest  already  accrued,  and  future  interest  will  accrue at 3.5%
interes t per  annum.
Of  the $3,589,271, $626,102 due to financial institutions is unsecured and will
be  repaid  over  5  years  from 2006 to 2010. The Company will be exempted from
paying interest already accrued, and the future interest will accrue at the rate
of 5% per annum.
Accounts payable due to parties other than financial institutions will be repaid
over  3  years from January 2005 to December 2007 and will be exempt from paying
any interest.
Progress  on  the  execution of the plan will be reported to Chooncheon District
Court,  Korea  every  quarter. Except for this, there are no further obligations
relating  to  debt  rescheduling  to  the  court. . The  court does not have any
authorities  such  as  having  the  Company  cease  operations and liquidate the
assets.  The  Company  does  not  need  to  get  an approval from the court when
additionally  borrowing  from  financial  institutions. The new borrowing of the
company depends on the Company's credit evaluated by the creditors.

Above  arrangement  do  not  allow  the creditors obtaining new common shares or
other  rights  in  respect  of  management  or  strategic  control.

As  discussed  in  Note  20  (b),  subsequent  to  December 31, 2003 the Company
completed  a  sale of 3,312,500 shares of common stock for cash of $530,000. The
Company  intends  to  raise additional financing through the issuance of debt or
equity instruments.

                                       49
<PAGE>

2. Basis  of Financial Statements and Summary of Significant Accounting Policies

(a) Basis of Financial Statements

The  Company  and  its subsidiaries maintain its books of accounts in accordance
with  generally accepted accounting principles in the Republic of Korea ("Korean
GAAP").  However  the  accompanying  consolidated financial statements have been
prepared  in  conformity  with  generally  accepted accounting principles in the
United States of America ("U.S. GAAP").


(b) Basis of Consolidation
The  consolidated  financial  statements include the accounts of the Company and
its  subsidiaries.  All significant inter-company balances and transactions have
not  been included on consolidation.  The Company consolidates corporations over
which it exercises control.


(c) Changes of Consolidated Subsidiary

The consolidated financial statements include the accounts of Meridian Co., Ltd.
and  its  subsidiaries.  The  following  table  reflects the Company's ownership
percentages  and  acquisition  dates  of  its  consolidated  subsidiaries  as at
December 31, 2003, 2002 and 2001:

                                             Acquisition    Percentage ownership
Subsidiary              Primary Business          Date     2003     2002    2001
Meridian America        Wholesaler, retailer    March 4,   100%     100%       -
Medicals, Inc.          of medical equipment     2000

Pusan Meridian Co.,Ltd. Wholesaler, retailer    March 3,     -    54.50%  54.50%
                        of medical equipment      2000

Chunee Soft Co., Ltd.   Developer of software   March 28,    -        -   50.00%

On  March  28,  2000,  the Company acquired 50% of the share ownership in Chunee
Soft  Co., Ltd.  for  $135,111 (by the spot exchange rate of Won 1,110.20 to $1)
in cash.

                                       50
<PAGE>

As  Chunee  Soft.  Co.,  Ltd.  was  declared  bankrupt in December 28, 2001, the
accompanying  2001 consolidated financial statements reflected a loss of $10,212
on bankruptcy  of  the  Company's  investment  in  this  subsidiary.

On  March  3,  2000,  the Company acquired 54.5% of the share ownership in Pusan
Meridian Co., Ltd. for $53,443 (by the spot exchange rate of Won 1,122.70 to $1)
in cash.
As  Pusan  Meridian  Co., Ltd.  was  declared bankrupt in November 11, 2003, the
accompanying  2003  consolidated  financial  statements  reflects  a  loss  on
bankruptcy  of  a subsidiary of $ 19,175 relating to the Company's investment in
Pusan Meridian Co., Ltd. as at December 31, 2003.

(d) Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of
credit  risk  consist  of  cash.  The  Company   maintains  cash accounts at two
financial institutions. The Company periodically evaluates the credit worthiness
of  financial  institutions,  and  maintains  cash  accounts  only in large high
quality  financial  institutions,  thereby  minimizing  exposure for deposits in
excess  of  federally  insured  amounts.  The  Company believes that credit risk
associated with cash is remote.
Credt  risk associated with trade accounts receivable 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.

(e) Translation of Financial Statements and Foreign Currency

The  accompanying financial statements have been translated into U.S. dollars in
accordance  with  SFAS  No.52.  All assets and liabilities are translated at the
exchange  rates  as  at  the balance sheet date. The exchange rate applied as of
December 31,  2003,  2002  and  2001  were  ?1,197.8/US$1, ?1200.4/US$1 and
?1,326.1/US$1,  respectively.  Elements  of  income  are translated at weighted
average  exchange rates for the period. The exchange rate applied for the period
were  ?1,191.89/US$1  for 2003 ?1,255.21/US$1 for 2002 and ?1,290.83/US$1 for
2001.  Equity  accounts  other  than  accumulated  deficits  are  translated  at
historical exchange rates. The resulting translation adjustment is recognized as
a component of other comprehensive income or loss.

The  company  maintains  its  books  of  accounts  in  Korean  Won. Transactions
involving  foreign  currencies are recorded in the accounts at the exchange rate
prevailing  at  the  time  the  transactions  are  made.  Assets and liabilities
denominated  in  foreign  currencies  are translated into Korean Won at exchange
rates.  in  effect  at  year-end.  The  resulting  foreign  currency  exchange
gains/losses  are  credited/charged  to  current  operations.
The  exchange rates we used in this report were announced by The Korea Financial
Telecommunications & Clearings Institute as basic rates.


(f) Use of Estimates

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  reported.  period. Actual results could differ from those
estimates.

                                       51
<PAGE>

(g) Cash Equivalents

Term  deposits  of  nil  at December 31, 2003 ($73,457 for 2002, and $75,287 for
2001)  consists of term deposits with an initial term of less than three months.
For  purposes  of the statements of cash flows, the Company considers all highly
liquid  debt  instruments with original maturities of three months or less to be
cash  equivalents.

(h) Allowance for Doubtful Accounts

Amounts  receivable  are  assessed  for  impairment  on  a  regular  basis. When
circumstances  indicate  collection  of  an  amount  receivable  is doubtful, an
allowance.  and  a  charge  against  earnings are recognized. When circumstances
indicate  collection  of  an  amount  receivable  is  not  to   be realized, the
outstanding amount and the associated allowance are written off.

(i) Value - Added Taxes

Under the Korean value-added tax ("VAT") law, the Company pays a 10% VAT on each
purchase of VAT-taxable goods or services("input tax") and collects VAT from its
customers  equal  to 10% of revenue("output tax"). The net amount is recorded as
prepaid  value-added  taxes,  if  the  input tax is greater than the output tax.
However,  if  the  output  tax  is greater than the input tax, the net amount is
recorded  as  a  current  liability.

(j) Inventories

Inventories  are valued at the lower of cost and net realizable value. Costs are
determined  using the average cost method, except for materials in transit which
are valued by the specific identification method.

(k) Property, Plant and Equipment

Property,  plant and equipment are stated at cost less accumulated depreciation.
Depreciations of tangible assets are provided using the declining balance method
over the following estimated useful lives:

                                   Years
Building and structure              40
Machinery and equipment              4
Other tangible asset                 4

Expenditures  that prolong the useful lives or enhance the value of fixed assets
are  capitalized,  while  expenditures   incurred  for  routine  maintenance are
expensed  in  the  year  in  which  they are incurred.
For the years ended December 31, 2003, 2002 and 2001, the Company recorded total
depreciation expense of $247,595, $125,708, and $203,737 respectively.

(l) Impairment of 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, a charge to earnings is
recognized based on the amount by which the carrying value exceeds the estimated
fair value.


                                       52
<PAGE>

(m) Intangible Assets

Intangible  assets,  which consist of patents and trademarks, are stated at cost
less accumulated amortization computed using the straight-line method over their
estimated useful lives of between 5 and 10 years.

(n) 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 products.

(o) Severance and Retirement Benefits

Pursuant  to the Korean National Pension Law and the Company's employment policy
the  Company  is  required to accrue an estimated liability, equal to the amount
which  would  be  payable if all employees left the Company at the balance sheet
date.  As  such,  the  Company  has  provided  an  allowance  for  severance and
retirement benefits of $62,700 for the year ended December 31, 2003 ($89,912 for
2002 and $120,972 for 2001).

(p) Research and Development Costs

Research and development costs are charged to earnings as incurred. Research and
development costs amounted to $227,078 in 2003 ($379,059 in 2002 and $555,865 in
2001).

(q) Advertising and shipping/handling costs

The  Company  expenses  advertising  and  shopping/handling  costs  as t hey are
incurred.  Advertising  expense  for the years ended December 31, 2003, 2002 and
2001 are $44,503, $62,944 and $94,644, respectively.

(r) Shipping/handling costs

All  amounts billed to a customer in a sales transaction related to shipping and
handling  represent  revenues  earned and are reported as revenue, and the costs
incurred  by  the  company for shipping and handling are reported as an expense.


(s) Income Taxes

Income  taxes  are accounted for under the asset and liability method.  Deferred
tax  assets  and  liabilities  are  recognized  for  the future tax consequences
attributable  to differences between the financial statement carrying amounts of
existing  assets  and  liabilities  and their respective tax bases and operating
loss  carry  forwards.  Deferred  tax  assets and liabilities are measured using
enacted  tax  rates  expected  to  apply to taxable income in the years in which
those  temporary  differences  are expected to be recovered or settled. Deferred
tax  assets  are  reduced  by  a  valuation  allowance  when,  in the opinion of
management,  it is more likely than not that some portion or all of the deferred
tax  assets  will  not  be  realized.  Deferred  tax  assets and liabilities are
adjusted  for  the  effects  of  changes  in  tax  laws and rates on the date of
enactment.


                                       53
<PAGE>

(t) Loss Per Share

In February, 1997, the Financial Accounting Standards Board issued Statement No.
128,  Earnings  Per  Share  (SFAS 128),  which  established  new  standards  for
computing  and  presenting  earnings per share effective for fiscal years ending
after December 15, 1997.
With  SFAS 128,  primary  earnings  per  share is replaced by basic earnings per
share,  which is computed by dividing income available to common shareholders by
the  weighted  average number of shares outstanding for the period. In addition,
SFAS 128 requires the presentation of diluted earnings per share, which includes
the potential dilution that could occur if dilutive securities were exercised or
converted  into common stock. The computation of diluted EPS does not assume the
conversion  or  exercise of securities if their effect is anti-dilutive.  Common
equivalent  shares  consist of the common shares issuable upon the conversion of
the  convertible loan notes and special warrants (using the if-converted method)
and  incremental  shares  issuable  upon the exercise of stock options and share
purchase warrants (using the treasury stock method).
Outstanding  stock  options  are not included in the calculation of diluted loss
per share as their effect would be anti-dilutive.

(u) Fair Value of Financial Instruments

The  following  methods  and assumptions were used to estimate the fair value of
each  class  of  financial  instruments  for which an estimate can reasonably be
obtained:

(i) Cash  and  cash  equivalents, short-term bank deposits, accounts receivable,
short-term  borrowings,  accounts  payable  and  accrued  liabilities

The  carrying  amount  approximates  fair  value because of the nature and short
maturity of those instruments.

(ii) Investment  securities,  long-term  bank  deposits,  long-term  loans  to
employees and guarantee deposits

The  fair value of market-traded investments is 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. The Company has no derivative contracts.
In relation with long-term loans to employees, the carrying amounts of the loans
are  equal  to their face values, which represent the amount of cash the company
will receive at maturity.

(iii) Long-term debts

The  fair  values  of long-term debt and bonds are estimated based on the quoted
market  prices  for  the  same  or  similar issues or based on the current rates
offered  for  debt  of  the  same  remaining  maturities.

(v) Stock Option Plan

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.


                                       54
<PAGE>

The  Company  has  adopted  the  disclosure-only  provisions  of  SFAS  123. Had
compensation cost for the Company's stock option plan been determined  based  on
the fair value at the grant date consistent with the provisions of SFAS123,  the
Company's net loss and loss per share for 2003 would have been  increased to the
pro forma amounts indicated below:


                                   2003
  Net income(loss)
  As reported                $(2,243,504)
  Pro forma                  $(2,264,475)
  Basic earnings per share
  As reported                   $(0.1240)
  Pro forma                     $(0.1286)

The fair value of stock options granted  were  estimated  on  the dates of grant
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 5.64% to 9% and expected lives of 4  years.  The  weighted  average fair
value per stock option granted during  2001  and  2000  was  $0.47  and  $ 0.26,
respectively.


(w) Asset retirement obligations

The  fair  value of a liability for an asset retirement obligation is recognized
when  a  reasonable  estimate  of  fair  value can be made. The asset retirement
obligation  is  recorded  as  a  liability  with a corresponding increase to the
carrying  amount  of  the  related  long-lived  asset.  Subsequently,  the asset
retirement  cost is allocated to expenses using a systematic and rational method
and  is  adjusted to reflect period-to-period changes in the liability resulting
from  the  passage  of  time and revisions to either timing or the amount of the
original  estimate  of  the undiscounted cash flow. As at December 31, 2003, the
Company  does  not  have  any asset retirement obligations.

(x) Recent Accounting Pronouncement

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45") -
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 elaborates on the
disclosures to be made by a guarantor about its obligations under certain
guarantees issued. It also clarifies that a guarantor is required to recognize,
at the inception of certain guarantees, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The initial recognition and
measurement provisions of FIN 45 apply on a prospective basis to guarantees
issued or modified after December 31, 2002. The disclosures are effective for
the Company's annual financial statements for the year ended December 31, 2002.
The adoption of this Interpretation did not have a significant impact on the
Company's consolidation financial position or results of operations.


In April 30, 2003, the FASB issued Statement No. 149 - "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." The statements amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under
Statement 133. The new guidance amends Statement 133 regarding implementation
issues raised in relation to the application of the definition of a derivative,
particularly regarding the meaning of an underlying and the characteristics of a
derivative that contains financing components. The amendments set forth in SFAS
No. 149 improve financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. In particular, this statement
clarifies under what circumstances a contract with an initial net investment
meets the characteristic of a derivative as discussed in SFAS No. 133. In
addition, it clarifies when a derivative contains a financing component that
warrants special reporting in the statement of the statement of cash flows. The
adoption of SFAS No. 149 did not have a significant impact on its consolidated
financial position or results of operations.

                                       55
<PAGE>

On May 15, 2003, the FASB has issued Statement No. 150 - "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." The
standard improves the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity. The new statement
requires that the following instruments be classified as liabilities on the
consolidated balance sheet. One type of instrument is mandatory redeemable
stock, which the issuing company is obligated to buy back in exchange for cash
or other assets. A second type of instrument, which includes put options and
forward purchase contracts, involves instruments that may require the issuer to
buy back some of its shares in exchange for cash or other assets. The third type
of instrument is obligation that can be settled with the Company's equity
shares. The monetary value of the obligation is fixed or tied solely or
predominantly to a variable such as a market index. The statement does not apply
to features embedded in a financial instrument that is not a derivative in its
entirety. SFAS No. 150 also requires disclosures about alternative ways of
settling the instruments and the capital structure of entities, all of whose
shares are mandatory redeemable. Most of the guidance in this statement is
effective for all financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of SFAS No. 150 had no significant
impact on the Company's consolidated financial position or results of
operations.


3. Short-Term and Long-Term Notes Receivable

Short-term and long-term loans receivable as of December 31, 2003, 2002 and 2001
are as follows:

<TABLE>
                                   Final      Annual
...                                Maturity   Interest
...                                  Year      Rate(%)     2003           2002         2001

<S>                              <C>       <C>         <C>             <C>            <C>
Short-term loans
Meridian Oriental Clinic           -            -            -               -     $158,333
Sales agent                        -            -            -          34,140      160,100
Other                           2004           0%      $107,131        111,691       37,081
                                                      ----------      ---------     --------
                                                       $107,131        145,831      265,716

Allowance for doubtful accounts                         (54,705)       (83,021)     (89,798)
                                                      -----------      ----------     -------
Net                                                    $ 52,246       $ 62,810      $146,327
                                                      -----------       ---------    --------
Long-term loans                    -           -
Meridian Oriental Clinic           -           -                                    $519,505
Other                              -           -                -              -       7,614
                                                       -----------      ---------    --------
                                                                -              -     527,119
Allowance for doubtful accounts                                 -              -    (213,059)
Present value discounts                                         -              -     (93,388)
                                                       -----------      ---------    --------
Net                                                             -              -    (220,672)
                                                       -----------      ---------    --------
</TABLE>

                                       56
<PAGE>

In calculating the present value of non-interest bearing long-term loans as of
December 31, 2001, the Company had utilized a 9% imputed interest rate, based on
the weighted average interest rate of short-term and long-term borrowings.

During the year ended December 31, 1999, the Company made a 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 was non-interest bearing and would be repaid annually
until 2006. The amount of repayment was determined annually by offsetting
clinical experiment expenses incurred by the Clinic on behalf of the Company and
only the advances would be paid in excess of these expenses. Such expenses
incurred by the Clinic were nil, nil and $35,088 for the years ended December
31, 2003, 2002 and 2001, respectively. These amounts were offset against the
short-term loan made to the Clinic in the respective years.
During the year ended December 31, 2002, Meridian Oriental Clinic ceased
business operations because of recurring operating losses and working capital
deficiencies. Therefore the remaining balance of short-term and long-term loans
to the Clinic, amounting to $142,435 and $562,564, was written-off for the 2002
fiscal year.
During the years ended December 31, 2003 and 2002, short-term loans receivable
from sales agents of $28,326, ($720,210 in 2002) were written-off when the sales
agents ceased to operate their business.
During the year ended December 31, 2003, a short-term loan to Chunee Soft Co.,
Ltd of $57,211 was written off due to Chunee Soft Co., Ltd going out of
business.

Interest income arising from these loans has been classified as other income.
Any provision for bad debts has been classified as non-trade bad debt expense as
a component of other expenses.


4. Inventories

Inventories as of December 31, 2003, 2002 and 2001 are as follows:
<TABLE>
<CAPTION>

                        December 31,
                       --------------
                     2003            2002            2001
                    ------          -----            ----
<S>              <C>              <C>            <C>
Merchandise . .  $  203,415         $  109,095     $  448,622
Finished goods.  $  150,045            250,625        325,200
Work in-process  $  141,600            134,854        223,650
Raw materials .  $  208,834            207,523        190,517
               ------------       ------------     -----------
                 $  703,894        $  702,097       $1,187,989
</TABLE>


Merchandise consists of medical equipment, medical supplies and electronic
equipment purchased and held for resale by the Company. Finished goods are
comprised principally of oriental and alternative medical equipment manufactured
by the Company.

                                       57
<PAGE>

5. Other Current Assets

Other current assets as of December 31, 2003, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>


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

                           2003      2002      2001
                         --------   --------   ------
<S>                      <C>         <C>       <C>
Accrued interest income  $1,176   $  5,447  $  9,510
Advance payments. . . .  25,071      6,933    96,894
Prepaid income taxes. .   6,662      5,593     8,301
Prepaid expenses. . . .       -      8,482     8,709
                     -----------  ---------  ----------
                      $  32,909  $  46,455  $123,414
</TABLE>



6. Investments in Nonconsolidated Affiliates

The Company accounts for investments in which it exerts significant influence
over using the equity method. The Company's ownership as of December 31, 2003,
2002 and 2001 are as follows:

                                                     Ownership percentage
                                               2003      2002      2001
Beijing Meridian Medicals
    Equipment Co., Ltd.                       25.00%     33.30%   45.00%
Meridian Asia Co., Ltd.                            -     49.00%   49.00%
True World Co., Ltd.                               -     47.90%   47.90%


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



The changes of ownership percentage occurred in 2003 and 2002 when Beijing
Meridian increased its issued capital stock.


The carrying amount of investment as of December 31, 2003, 2002 and 2001 are as
follows:

The Company lost the ability to exercise control over Meridian Asia Co., Ltd and
True World Co., Ltd. ("True World") effective on December 31, 2001. As a
consequence, the equity method has been applied to the investments since January
1, 2002 and losses in excess of the initial investment in the investees have not
been recognized.

                                       58
<PAGE>

7. Property, Plant and Equipment

As of December 31, 2003, the Company's land and buildings were pledged as
collateral for the Company's lines of credit totaling $925,591 with ChoHung Bank
and Woori Bank


8. Short-term Borrowings

Short-term borrowings at December 31, 2003, 2002 and 2001 consist of the
following:

<TABLE>
<CAPTION>
                                       Annual      Final                       December 31,
                                      Interest    Maturity
Lender                                 rate (%)    Date               2003           2001          2000
                                     ----------  ----------           ------         ------         -----
<S>                                <C>         <C>                 <C>              <C>         <C>

ChoHung Bank                             5%    December 31,2004      $816,176       1,055,168   $1,040,142
Shinhan Bank                                   Aug.17.2003                  -          84,281       70,774
Woori Bank                                     May 15.2003                  -         201,941      159,968
Korea Exchange Bank                            Sep.05.2003                  -         168,591      190,331
Small/Medium Ind. Bank                         Aug.20.2003                  -               -       20,556
Medison Co., Ltd.                              Dec 31.2003              1,015           1,025          926
Other                                          Jan 2. 2003            413,779         160,239      104,876
                                                                                 -----------    ----------
                                                                   $1,230,970    $  1,671,246  $ 1,587,573
                                                                         --------------     --------------
</TABLE>

                                       59
<PAGE>

9. Long-term Borrowings

Long-term borrowings at December 31, 2003, 2002 and 2001 consist of the
following:

<TABLE>
<CAPTION>

                                          Annua        Final
                                      interest rate   maturit           2003        2002        2001
Lender
<S>                                      <C>      <C>                  <C>        <C>        <C>
Chohung Bank                                5%    December 31,2004     $80,765    $927,666   $1,029,928
Korea Technology Credit
     Guarantee Fund                       3.5%    December 31,2013     935,724           -           -
Korea Foreign Exchange Bank               3.5%    December 31,2013     104,367           -           -
Woori Bank                                3.5%    December 31,2013     327,089      32,327      29,692
Small/Medium ind. Bank                    3.5%    December 31,2013     250,458     252,887     247,431
Shinhan Bank                              3.5%    December 31,2013      34,740           -      30,453
Daewoo Capital Co., Ltd                     -                    -           -           -       8,088
SMI II ABS Specialty Co., Ltd.(Note a)    3.5%    December 31,2013     834,864     841,755     755,786
Rainbow Specialty Sec Co., Ltd.(Note a)   3.5%    December 31,2013     417,432     421,479     380,662
                                                                    $2,985,439  $2,476,114  $2,482,040

Less portion due within one year                                       (80,765) (1,276,718)   (251,535)
Long-term portion                                                   $2,904,674  $1,199,396  $2,230,505
</TABLE>

In accordance with a court-approved rescheduling plan, the above rescheduled
long-term borrowings are to be repaid over 10 years beginning 2007 to 2013,
after a 3-year grace period.

(Note a) The Company had issued two series of non-guaranteed corporate bonds in
2001. As discussed in Note 1, the Company received an approval for debt
rescheduling plan including debentures. According to that approval, two series
of debentures were reclassified to long-term borrowings and the Company extended
the maturity date of those long-term borrowings to December 31, 2013 with a
reduced interest rate (3.5% per annum). Details of debentures (reclassified to
long-term borrowings) as of December 31, 2003, are as follows:

<TABLE>
<CAPTION>

                                       Rescheduled                    Original
                     Amount    interest rate    Maturity       interest rate    Maturity
<S>                <C>            <C>        <C>                 <C>         <C>
1st debentures     $834,864        3.5%     December 31,2013      12.15%     January 31,2003
2nd debentures     $417,432        3.5%     December 31,2013      13.92%      August 14,2004
Total            $1,252,296
</TABLE>


                                       60
<PAGE>

The repayment schedule for long-term debts as of December 31, 2003 is as follows
(in U.S. dollars):

2004     2005     2006     2007     2008     Thereafter
80,765      -        -   414,948   414,948     2,074,778

10. 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.
The term pension is used differently in Korea as compared to that used by the
National Pension Law ("Law") and National Pension Fund ("NPF"). A Korean pension
is a one-time lump sum payment upon the termination of 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 be terminated 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)
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,
2003, 2002 and 2001 are as follows:

                                              2003           2002          2001
Beginning balance                         $232,653       $317,285      $238,067
Provision                                   62,700         89,912       120,972
Payments                                   (60,912)      (190,294)      (31,961)
Belonged to formal subsidiaries             (2,971)       (12,245)            -
Translation adjustment                      (9,831)        27,995        (9,793)
Ending Balance                             221,639        232,653       317,285
Transferred to NPF                          17,477         18,440        25,368
                                          ---------      ---------     ---------
                                           204,162        214,213       291,917
Less current portion                        63,465         75,304        44,216
                                          ---------      ---------     ---------
Net                                       $140,697       $138,909      $247,701
                                          =========      =========     =========

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


                                       61
<PAGE>

11. 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).
(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.
(e) A shareholder resolution was passed on February 15, 2001, whereby 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.
(f) On July 22, 2002, the Company issued 1,282,708 shares of common stock (par
value 0.17 at the spot exchange rate) in exchange for investor relations and
marketing services with the fair value of $300,000.
(g) On July 16, 2003, the Company issued 1,968,901 shares of common stock (par
value 0.17 at the spot exchange rate) in exchange for investor relations and
marketing services with the fair value to the Company of $334,933. The shares
issued were valued at the trading price of the company's common stock as of the
date of authorization for the issuance.


12. Appropriation for Business Rationalization

The Company has appropriated $ 206,286 ($ 220,927 for 2002 and $224,659 for
2001) of retained earnings for future investment and business rationalization.
The appropriation was a legal requirement in Korea until 2001 when the
applicable statute was repealed. There are presently no restrictions on the use
of the appropriation.


13. Commitments and Contingencies

As of December 31, 2003, the Company is contingently liable for promissory notes
of $8,632 guaranteed to banks for consumers' loan. The Company's management
believes that, based upon its past history of similar transactions, the
possibility of the consumer's defaults on the bank-loan is remote.

                                       62
<PAGE>

14. Related Party Transactions

Significant transactions between the company and related parties for the years
ended December 31, 2003, 2002 and 2001 are summarized as follows:

                                                 2003          2002         2001
Account Balances
  Accounts receivable-trade
     Beijing Meridian Medicals                 $26,650        $26,967         -
  Short-term loans
     Beijing Meridian Medicals                                      -   $28,771
  Short-term borrowings
    Beijing Meridian Medicals                  $31,550        $31,856         -

Transactions
  Sales to Meridian Asia Co., Ltd.              $3,415              -         -
  Sales to True World Co., Ltd.                               $62,995         -
  Purchases from True World Co., Ltd.                            $362         -

In connection with the related party transactions, unearned gross profit in
inventory is eliminated for equity-accounted investees.


15. Income Taxes

The Company is subject to corporate income tax and resident surtax normally at
an aggregate rate of 16.5% on taxable income up to $83,486 (100,000,000 Korean
Won) and 29.7% on taxable income over that amount.
At December 31, 2003, the Company had technology and human resources development
tax credit carryforwards of $26,708 ($238,743 in 2002). The Company does not
expect to realize the tax benefits from such tax credit carryforwards before
their expiration in 2009 (2008 for 2002). A valuation allowance of $1,192,218
($1,423,967 in 2002) 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 purposes. Significant components of
the Company's deferred tax assets as of December 31, 2003, 2002 and 2001 are as
follows:

                                                2003          2002          2001
Deferred tax assets
Accruals and reserves                        $1,165,510   $1,185,224    $637,791
Technology and human resources                   26,708      238,743     179,025

Total deferred tax asset(liability)          $1,192,218   $1,423,967    $816,816
Valuation allowance for deferred tax assets  (1,192,218)  (1,423,967)  (816,816)
Net deferred tax asset(liability)                     -            -          -

                                       63
<PAGE>

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, 2003, 2002 and 2001 is as
follows:

<TABLE>
<CAPTION>
                                                            2003          2002              2001
<S>                                                       <C>           <C>            <C>
Income tax recovery at statutory rate                    (566,669)     (862,820)       (577,774)
Reduction of income tax benefit
 due to lower tax rate on first W100,000,000               11,020        10,628           10,206
Temporary difference - primarily non-deductible
expenses under Korean Tax Law                               8,335       457,563          557,214
Permanent difference - expenses(primarily entertainment
 and others) in excess of tax deductible limitation        39,392       115,599           35,473
Others - net                                              276,973       886,181          529,778
Changes in valuation allowance                            231,749      (607,151)        (554,897)

Income tax expenses                                             -             -                -
</TABLE>


16. Stock Options

Under the Company's Articles of Incorporation, the Company's Board of Directors
may grant stock options to officers and key employees. 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.

Details of stock option rights granted by the company as of December 31, 2003,
are presented below:

<TABLE>
<CAPTAION>

                                                   Exercise Price
<S>            <C>              <C>              <C>                   <C>          <C>                 <C>
Grant          Options          Type of           (By the Spot          Fair                             Exercisable
Date         Outstanding     Stock Options        Exchange Rate)        Value       Vesting Period         Period
February       322,625        Issuance of            $0.88              $0.26       February, 2000     February, 2003
23,2000                     common shares                                           to January, 2003   to January, 2007
March          258,825       Issuance of             $0.25              $0.47          March, 2001        March, 2004
19,2001                     common shares                                           to February, 2004  to February, 2008
               581,450

To December 31, 2003 no issued stock options have been exercised.
</TABLE>


                                       64
<PAGE>

To December 31, 2003 no issued stock options have been exercised. The Company
will disclose the pro forma impact on operations, comprehensive income and
earnings per share beginning in the 2004 fiscal year when the stock options
which issued at March 19,2001 begin to become exercisable.


17. Fair Value of Financial Instruments

The estimated fair value of financial instruments has been determined using
available market information or other appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to
develop estimates of fair value; therefore, the estimates are not necessarily
indicative of the amounts that could be realized or would be paid in a current
market exchange. The effect of using different market assumptions and/or
estimation methodologies may be material to the estimated fair value amounts.

Fair value of financial instruments as of December 31, 2003 and 2002, are as
follows:
<TABLE>
<CAPTION>

                                               2003                          2002
<S>                            <C>               <C>            <C>              <C>
                                Carrying amount  Fair value     Carrying amount  Fair value
Financial assets
Cash and cash equivalents           $31,557        $31,557         $128,674       $128,674
Short-term investments                    -              -          189,760        189,760
Accounts receivable-trade           405,471        405,471        1,058,953      1,058,953
Accounts receivable-other               744            744           15,326         15,326
Short-term loans                     52,426         52,426           62,810         62,810
Investments(Note a                        -              -           45,293       (Note a)
Long-term bank deposits              33,448         33,448           11,633         11,633
Long-term loans                           -              -          113,391        113,391
                                  ----------                    -------------
                                   $523,646              -       $1,625,840
                                   =========                    ============
Financial liabilitie
Account payable-trade or other   $1,893,826     $1,893,826       $1,649,778     $1,649,778
Short-term borrowings             1,382,816      1,382,816        1,671,246      1,671,246
Long-term borrowings              2,752,828      2,752,828        1,055,838      1,055,838
Debentures                                -              -          420,276        420,276
Long-term accounts payable          105,474        105,474           56,784         56,784
                                ------------                    ------------
                                 $6,134,944                      $4,853,922
                                ============                    ============
</TABLE>
(Note a) Fair value of these investments were estimated by the Company's
management as the investments are not publicly traded.

                                       65
<PAGE>

18. Statements of Cash Flows

(a) Transactions Not Involving Cash
For the years ended December 31, 2003, 2002 and 2001, the Company's main
transactions not involving cash are as follows:

<TABLE>
<CAPTION>
<S>                                                          <C>              <C>           <C>
Transactions not involving cash                                2003            2002          2001
Transfer of debentures to long-term borrowings               $420,276             -             -
Transfer of short-term debt to long-term borrowings          $762,095             -             -
Transfer of current portion of long-term debt to
long-term borrowings                                       $1,077,345              -            -
Transfer of long-term borrowings to current
portion of long-term debt                                           -      1,276,718     $251,535
Issuance of common stock for a 100% equity
interest in a U.S. corporation named By
George Holding, Corp. valued at                                     -              -     $270,620
Issuance of common stock for services valued at              $334,933       $300,000            -

</TABLE>

(b) Interest and Income Taxes Paid and Received
Interest and income taxes paid and received in cash for the years ended December
31, 2003, 2002, and 2001, are as follows:

                                         2003         2002            2001
Cash paid for interest                 $118,692     $386,839        $333,084
Cash refunded(paid) for income tax       (7,422)     (14,095)         36,571
Cash received for interest               $1,133      $32,149         $38,641



19. Segment Information

In 2003, the Company operated in a one industry segment, the development and
manufacture of alternative medical equipment. The Company's identifiable assets
are located in one geographic area, the Republic of Korea (also known as South
Korea). Sales revenue is attributable to geographic locations based on the
location of the customer, as follows:

                         2003         2002          2001
Export
U.S.A                  $444,215    $363,306      $169,613
Canada                                            135,794
South America                                      57,199
South Asia                                         26,291
China                                 2,300        90,710
Japa                                      -             -
Other                     3,431      22,829        53,407
                       $447,646    $388,435      $533,014

Domestic Sales        2,446,913   3,133,222     4,756,547
                    ------------ ----------   -------------
                     $2,894,559  $3,521,657    $5,289,561


                                       66
<PAGE>

20. Subsequent Events

(a) At an extraordinary general meeting of shareholders of the Company, on April
27, 2004, it was approved that the par value of the common stock of the Company
be reduced from 200 Korean Won per share (equivalent to US$0.17 per share) to
100 Korean Won per share (equivalent to US$0.09 per share). Nine shareholders
representing 6,994,650 common shares (representing 36.5 % of the issued common
shares) were present and they approved the par value change by common assent.
The new par value was registered with the Korean registrar of companies on June
1, 2004 and will be effective as of July 1, 2004.

(b) The Company received funds of US$530,000.00 from investors through an equity
financing whereby, on June 8, 2004 the Company sold 3,312,500 shares of common
stock for cash of $ 530,000 ($ 0.16 per share). Share issue costs of $ 26,500
were paid in connection with the financing. The stock issued is restricted from
trading for one year.

21. Risk and Uncertainties

The Asia-Pacific regions, including the Republic of Korea, are experiencing
economic difficulties. The recoverability of the Company's assets and ability of
the Company to pay its debts as they mature are dependent to a large extent on
the efficacy of the fiscal measures and other actions, beyond the Company's
control, undertaken to achieve economic stability. The Company is exposed to
credit risk in the event of nonperformance by financial institutions with which
it conducts business. The Company minimizes exposure to such risk, however, by
dealing only with major Korean banks and financial institutions.


Item 19. Exhibits

Exhibit 12         Section 302 Certification
Exhibit 13         Section 906 Certification


SIGNATURES

The registrant hereby certifies 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 annual report on its behalf.

                                                  By:     /s/ Hyeon Seong Myeong
                                                     Name:   Myeong, Hyeon Seong
                                            Title:      President, CEO, Director
                                                         Date:     July 28, 2004


                                       67
<PAGE>

Exhibit 12.1.

Certifications


I,  Myeong, Hyeon Seong, certify, that:

1. I  have  reviewed  this  annual  report  on  Form 20-F of Meridian Co. Ltd. ;
2. Based  on  my  knowledge,  this  annual  report  does  not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based  on  my  knowledge,  the  financial  statements,  and  other  financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in this annual report;
4. The registrant's  other  certifying  officers  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:
d.  designed  such  disclosure  controls  and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period in which this annual report is being prepared;
e.  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
f.  presented  in  this annual report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on  our  evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
c.  all significant deficiencies in the design or operation of internal controls
which  could  adversely  affect  the  registrant's  ability  to record, process,
summarize  and  report  financial  data and have identified for the registrant's
auditors  any  material  weaknesses  in  internal  controls;  and
d.  any  fraud,  whether  or  not  material,  that  involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The  registrant's  other  certifying  officers  and  I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


                                                  By:     /s/ Hyeon Seong Myeong
                                                     Name:   Myeong, Hyeon Seong
                                             Title:     President, CEO, Director
                                                         Date:     July 28, 2004


                                       68
<PAGE>

Exhibit 12.2.

Certifications

I, Sang Yeul Park, certify, that:

1. I  have  reviewed  this  annual  report  on  Form 20-F of Meridian Co. Ltd. ;
2. Based  on  my  knowledge,  this  annual  report  does  not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based  on  my  knowledge,  the  financial  statements,  and  other  financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in this annual report;
4. The registrant's  other  certifying  officers  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:
d.  designed  such  disclosure  controls  and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period in which this annual report is being prepared;
e.  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
f.  presented  in  this annual report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on  our  evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
c.  all significant deficiencies in the design or operation of internal controls
which  could  adversely  affect  the  registrant's  ability  to record, process,
summarize  and  report  financial  data and have identified for the registrant's
auditors  any  material  weaknesses  in  internal  controls;  and
d.  any  fraud,  whether  or  not  material,  that  involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The  registrant's  other  certifying  officers  and  I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


                                                      By:     /s/ Sang Yeul Park
                                                          Name:   Sang Yeul Park
                                                             Title:     Director
                                                         Date:     July 28, 2004


                                       69
<PAGE>

Exhibit 13.1.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report, as amended, of Meridian Co., Ltd.
(the "Company") on  Form 20-F for the year ended December 31, 2003 as filed with
the  Securities  and  Exchange  Commission on the date hereof (the "Report"), I,
Hyeon  Seong Myeong, President of the Company, certify, pursuant to 18 U.S.C. ?
1350, as adopted  pursuant  to ?906 of the Sarbanes-Oxley Act of 2002, that to
my knowledge:
   (1) The Report fully complies with the requirements of section 13(a) or 15(d)
   of the Securities Exchange Act of 1934; and
   (2) The information contained in the Report fairly presents, in all material
   respects, the financial condition and result of operations of the Company.

By:     /s/Hyeon Seong Myeong                      Name:  Hyeon Seong Myeong
                                                  Title:  President,CEO,Director
                                                   Date:  July 28, 2004


Exhibit 13.2.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In  connection  with  the  Annual  Report,  as  amended, of Meridian Co., Ltd. .
(the "Company")  on Form 20-F for the year ended December 31, 2003 as filed with
the  Securities  and  Exchange  Commission on the date hereof (the "Report"), I,
Hyeon  Seong Myeong, President of the Company, certify, pursuant to 18 U.S.C. ?
1350,  as  adopted pursuant to ?906 of the Sarbanes-Oxley Act of 2002, that to
my knowledge:
              (1) The Report fully complies with the requirements of section
              13(a) or 15(d) of the Securities Exchange Act of 1934; and
              (2) The information contained in the Report fairly presents, in
              all material respects, the financial condition and result of
              operations of the Company.
                                                      By:     /s/ Sang Yeul Park
                                                          Name:   Sang Yeul Park
                                                             Title:     Director
                                                         Date:     July 28, 2004


                                       70
<PAGE>