Meridian Co., Ltd.: Form 20-F - Filed by newsfilecorp.com

[ ] 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

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

4F, 196-35, Anyang-Dong, Manan-Gu, Anyang-Si, Gyeonggi-Do, Korea 430-857 (Tel: 82-31-463-7700)
(Address of principal executive offices)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

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.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]

If this report is an annual report or transition report, indicate by check mark if the registrant is not required to file reports pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes [ ] No [X]

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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

Indicate by check mark which financial statement item the registrant has selected to follow.
Item 17 [ ] Item 18 [X]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

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 100 (US $0.09 at December 31, 2010).

In this annual report, references to "Won" or "\" 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 and presented in accordance with accounting principles generally accepted in the United States for the fiscal years ended December 31, 2010, 2009, 2008, 2007 and 2006. Solely for the convenience of the reader and to improve clarity, certain items in this annual report were expressed in US$ at specified rates. Those US$ amounts are not audited. All translations from Won to US$ 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, 2010, which was Won 1,130.60 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 US$. On June 30, 2011 the exchange rate was Won 1,066.3 to US$1.00.

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, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 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, 2010, 2009, 2008, 2007 and 2006 are derived from the audited consolidated financial statements of Meridian, which have been audited by Choi, Kim and Park LLP, independent accountants

Our consolidated financial statements are compiled in Won and presented in accordance with accounting principles generally accepted in the United States.

Meridian Co., Ltd. and Subsidiaries
Condensed Consolidated Statements of Operations
For the years ended December 31, 2010, 2009, 2008, 2007 and 2006
(Korean Won (\) in thousands, except per share amounts)

Condensed Consolidated Balance Sheets
As of December 31, 2010, 2009, 2008, 2007, and 2006
(Korean Won (\) in thousands)

(1) For convenience only, the Won amounts are expressed in U.S. dollars at the rate of Won 1,130.6 to US$1.00, the noon buying rate as quoted by the Federal Reserve Bank of New York in effect on December 31, 2010. This translation should not be construed as a representation that the Won amounts represent, have been or could be converted to US$ at that rate or any other rate.

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.

	Won per U.S dollar(noon buying rate)
YEAR	Period-End	Average⁽¹⁾	High	Low
2006	930.0	954.3	1,002.9	913.7
2007	935.8	929.0	950.2	903.2
2008	1,262.0	1,098.7	1,507.9	935.2
2009	1,163.7	1,274.6	1,570.1	1,149.0
2010	1,130.6	1,155.7	1,253.2	1,104.0
2011
January	1,119.1	1,118.9	1,128.1	1,111.0
February	1,123.7	1,117.4	1,130.6	1,100.9
March	1,097.3	1,119.3	1,135.6	1,097.3
April	1,068.4	1,083.2	1,091.8	1,068.4
May	1,078.0	1,084.4	1,101.6	1,065.5
June	1,066.3	1,080.5	1,091.2	1,066.3

(1) The average of the daily noon buying rates of the Federal Reserve Bank in effect during the relevant period (or portion thereof)

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 has limited financial resources. The Company will require additional cash to implement its business strategies, including cash for (i) payment of long-term and short-term borrowings (ii) payment of operating expenses, (iii) costs associated with bringing new products to market, (iv) continued research and development and (v) 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.

In February 2004, the Company received approval for a debt restructuring plan for a total of 4,697,927 thousand Won 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 4,697,927 thousand Won of the Company's debt.

In January 2005, Woori Bank exercised its security right on the apartment owned by Meridian. The proceeds of 42,837 thousand Won from foreclosure were used to pay debt principal, interest and other direct expenses related to foreclosure.

Aside from the debt restructuring, Meridian had a borrowing from Chohung Bank (Chohung Bank has been merged into Shinhan Bank as of April 1, 2006), which was not included in the original restructuring plan, as the bank did not agree to the terms. In December 2005, Chohung Bank exercised its security right on the land and building, which had been provided as collaterals by Meridian. The proceeds of 883,308 thousand Won from the foreclosure, was paid to preemptive other creditors and Chohung Bank. Subsequent to the foreclosure, the original debt restructuring plan was modified to include the outstanding principal of 1,074,455 thousand Won to Chohung Bank.

In December 2008, Korea Technology Credit Guarantee Fund reduced their original principal from 1,151,884 thousand Won to 1,142,064 thousand Won. The repayments under the re-modified plan were scheduled as follows:

(in thousand)
		2007		2008		2009		2010		2011		2012		2013		Total
Principal	\	462,656	\	649,082	\	\ 649,082	\	649,082	\	649,082	\	649,082	\	649,081	\	4,357,147
Interest		447,346		158,465		162,399		150,251		68,180		45,461		22,727		1,054,829
Total	\	910,002	\	\ 807,547	\	811,481	\	799,333	\	717,262	\	694,543	\	671,808	\	5,411,976

However, due to the recurring losses from operations, Meridian was not able to meet the repayment schedule. As of December 31, 2010, Meridian has not paid 2,409,902 thousand Won of principal and 918,461 thousand Won of accrued interest outstanding to financial institutions, and 863,102 thousand Won of accounts payable to various vendors.

In June, 2004, the Company received funds of US$530,000 from investors through an equity financing whereby, the Company issued 3,312,500 common shares of the Company to three non-U.S. investors at the price of US$0.16 per share.

In April 2007, the Company raised 517,000,000 Won from twenty non-U.S. investors for total 933,506 common shares at the price of 554 Won per share and warrants to purchase 133,358 common shares at 950 Won per share. As of December 31 2009, due to the end of exercisable period, those warrants are not effective any more.

In June 2007, the Company raised US$350,000 from one non-U.S. investor for 700,000 common shares at the price of US$0.50 per share.

In December 2007, the Company raised 1,779,000,000 Won from forty nine non-U.S. investors for total 1,976,666 common shares at the price of 900 Won per share.

In January 2011, the Company raised US$150,000 from one U.S. investor for 1,500,000 common shares at the price of US$0.10 per share.

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 incurred significant operating losses in the past and may not be able to achieve or sustain profitability in the future.

For the year ended December 31, 2010, the Company had a net loss of 1,413,358 thousand won ($1,250,100) and an accumulated deficit of 19,121,226 thousand won ($16,912,461). The extent of future losses will depend, in part, on 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 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 is no assurance that the Company will sustain profitability or that its operating losses will not increase in the future.

The Company operates in a highly competitive industry and competes against many large companies.

Increased competition in the medical device manufacturing industry in our markets from existing and potential competitors could make it difficult for us to retain existing customers and attract new customers. Many of our competitors have significantly greater financial, marketing and development resources than we have. As a result, we may not be able to devote adequate resources to develop new product. The risk to the Company's markets could impair the Company's growth and have a negative effect on the Company's business.

The Company may need to upgrade products and develop new technologies to succeed in product life cycles.

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 on 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.

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.

The Company currently depends on a limited number of domestic suppliers to manufacture certain key components and these manufacturers may not be able to satisfy requirements and could cause 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.

Macroeconomic factors in regional markets may adversely affect the business.

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 on 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 affect these companies could also have a material adverse effect on the Company's business, results of operations and financial condition.

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.

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.

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.

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:

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:

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.

A limited number of customers generate a significant portion of the Company’s revenue.

The Company's accounts receivable are derived primarily from revenue earned from customers located in the U.S. and Korea. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collaterals from its customers. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. There was 522,823 thousand won write-off in the year ended December 31, 2010 and was no write-off in 2009.

In 2010, the Company had one customer represented approximately 55.8% of revenues. In 2009, the Company had two customers that each represented more than 10% of its revenues, one of which represented approximately 47.5% of revenues and the other which represented approximately 11% of revenues. In 2008, the Company had three customers that each represented more than 10% of its revenues, one of which represented 29% and two of which represented approximately 11% of revenues.

At December 31, 2010, the Company had one customer that accounted for 77% of accounts receivable. At December 31, 2009, the Company had one customer that accounted for 65% of accounts receivable.

Expansion of the Company’s operations abroad is important to its long-term successes, but its limited experience in the operation outside of Korea increases the risk that the performance in oversea markets would not be successful with the large expenditure for various license acquisition fees and marketing cost.

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:

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.

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.

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.

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:

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.

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.

Compliance with corporate governance regulations could increase the cost of our operations

As a result of changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, the costs of being a public company in general have increased in recent years. The Sarbanes-Oxley Act of 2002 requires changes in some of corporate governance and securities disclosure or compliance practices. The Company expects that the on-going implementation of these regulations will further increase its legal compliance costs and will make some activities more time consuming. The Company is presently planning and implementing regulatory developments and cannot estimate the magnitude of additional costs it may incur as a result of such developments in connection with its future implementation of Section 404 of the Sarbanes-Oxley Act of 2002, which governs.

Meridian Co., Ltd. (“Meridian” or the “Company”) was incorporated in the Republic of Korea on April 19, 1994 for the purpose of developing and manufacturing medical devices, particularly to the integrative medical markets. 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 acquired 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.

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.

In February 2004, the Company received an approval for a debt restructuring plan for a total of 4,697,927 thousand Won from Chooncheon District Court, Korea. The adjusted period of payment is generally 7 years after 3 years of grace period.

The Company's corporate head office is located at 4F, 196-35, Anyang-Dong, Manan-Gu, Anyang-Si, Gyeonggi-Do, Korea 430-857.

Meridian is an established leader in the research, development, manufacturing, and marketing of integrative medical devices in the healthcare industry.

With a dynamic research and development team, Meridian is at the forefront in the development of cutting edge medical technologies. The Company presently holds a total of 5 registered and pending patents, 2 design rights and 7 trademarks and has received 4 FDA 510(k) clearances for their medical devices. In order to distribute worldwide, Meridian has also gained 3 SDA approvals in China and 3 FIP approvals in South America. Successfully marketed in Korea, Japan, EU, Middle East, USA, Canada, and China, Meridian continues to provide its superior product line to a growing number of clients worldwide. Meridian has over 5,000 clients, which include physicians, hospitals, healthcare professionals, medical device manufacturers, beauty salons and health and fitness centers.

The Company currently sells three different products to healthcare practitioners throughout the domestic and overseas market. These include DPA (Digital Pulse Analyzer), Lapex-2000 and Lapex BCS (Lapex-2000 LipoLaser)

The Company believes that blending together a combination of intrinsic medical knowledge with superior software and technology it can create high quality physiological monitoring applications that capitalize on the growing wellness market.

Meridian’s strength lies in the unique knowledge base and skills of our team who possess medical backgrounds, software engineering skills, and a sincere passion for preventative medicine that can improve the quality of one’s life.

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. (“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. 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.

The Company identified the United States as a significant market and incorporated Meridian America Medical Inc (“MAMI”) in the United States as a subsidiary of the Company, in February 2002, in preparation for the launch of the Meridian products into the US market.

In 2004, Meridian Co. Ltd. entered into an exclusive distribution agreement with a corporation in Vancouver, BC, Canada, Meridian Medical Inc. has been fully concentrating on the marketing and sales of the DPA and Lapex-2000. Meridian Medical has secured valuable strategic relationships since its inception and is expected to continue its success in the market adding further value to Meridian Co. Ltd.

On March 4, 2002, Meridian acquired 100% ownership of Meridian America Medicals, Inc. located in the city of Irvine, California, USA to establish distribution post for the North American market. On December 13, 2004 and February 15, 2005, Meridian America Medicals, Inc. issued new common stock, of which the shares were entirely subscribed by a non-controlling shareholder, Meridian Medical, Inc. Consequently; the ownership by Meridian was diluted from 100% to 75.76% .

On September 29, 2005, Meridian acquired 100% ownership of Rapha & Health Co., Ltd. for 50 million Won in cash to systemize its sales process in domestic (Korea) market. On June 7, 2006, Rapha & Health Co., Ltd. changed its name to Meitian Co., Ltd. However, Meitian Co., Ltd. closed down in April 2008, so that Meridian could concentrate its resources on the overseas markets.

In April 2007, Meridian expanded its business in the European market by signing a distribution agreement with Laser Lipo based in the U.K. Meridian has 7 regional distributors in Europe and achieved 1,444,010 thousand Won in 2008. Since then, the Company’ revenue in Europe market was 186,687 thousand Won and 327,126 thousand Won for the year ended 2009 and 2010, respectively.

In 2009, Meridian has entered into new markets, such as Portugal, Bulgaria, Albania in EU and South Africa, Egypt, Kuwait for the diversification of revenue. The revenue from new markets accounted to 136,369 thousand Won and 44,993 thousand Won for the year ended 2009 and 2010, respectively.

In 2010, the aggressive marketing and sales channel development for North America and Europe market has increased the amount of two region’s revenue, respectively 855,509 thousand Won and 327,126 thousand Won, occupying 88.3% of the Company’s total revenue. Especially, North American market has increased 23%, compared to last year. In Europe, the Company has begun selling LAPEX BCS Pro in France and Turkey.

The Meridian line of products includes DPA (Digital Pulse Analyzer), Lapex-2000, LAPEX BCS (Lapex-2000 LipoLaser), and Meridian II.

The DPA uses pulse waveform analysis to measure arterial compliance. 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. DPA 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.

The DPA (Digital Arterial Pulsewave Analyzer) has the additional feature of measuring heart rate variability(HRV), which gives a good indication of the condition of the autonomic nervous system. The software has the capability to store all of the patient's data. The structure is configured with a DPA console, SpO2 electrode, and computer software with WINDOWS base.

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.

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:
Point Laser Probe - Trigger Point Monitoring Function and Applying Laser to Trigger Point
Multi Laser Probe - To address the largely affected parts at once
LIB (Laser Irradiation of Blood) probe - Non-invasive irradiation of venous blood, easy to operate, solid curative effect

LAPEX BCS is a modified version of the Lapex-2000 specifically to target the growing obesity market. The LAPEX BCS's non-invasive treatment is considered one of the most innovative methods of body contouring to liquefy adipose tissue under skin layer, and the demand for this type of treatment is expected to grow rapidly, not only in the plastic surgery profession, but in any clinical and aesthetic setting, such as spas and wellness centers, that treat localized body fat deposits which may not have responded to diet and exercise.

It uses 2 multi-beam and 2 enhanced probes which irradiate a powerful cold red laser (635 – 680nm/ 40mW) on adipose (fat) Cell.

LAPEX BCS Pro is an upgraded version of the Lapex BCS specifically to target the growing obesity market.

- New technologies on the platform of the main body. (i.e. main chip, color LCD, Interface etc.)
- Enhanced design and color of the main body
- New technologies, materials and designs on the Laser applicators in order to make it slimmer and more effective
- 4 multi-beams and 2 enhanced probes

The Meridian-II is a computer assisted assessment and diagnostic device, which is 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.

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.

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

Structure:
Main body - CART in exclusive use PC:
P-233MHz CPU, 32MB MEMORY, 6.4GB HDD
WINDOWS 98 OS, 40X CD-ROM, AGP 4MB VGA

Sales revenue is attributable to geographic locations based on the location of the customer, as follows:

		2010		2009		2008
Export
North America	\	855,509	\	693,543	\	1,143,757
Asia		49,220		111,835		544,461
Europe		327,126		186,687		1,444,010
Other		44,993		107,966		15,615
		1,276,848		1,100,031		3,147,843

Domestic Sales		61,842		273,348		177,080
	\	1 338 690	\	1,373,379	\	3 324 923

The medical instruments industry is characterized by low-volume production of various medical equipments 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.

The demand for medical devices is influenced by an increasing patient population and the focus on health care cost containment and preventative therapies. Medical devices include a broad range of surgical devices and equipment used in cardiovascular, orthopedics, respiratory, ophthalmic, neurology, urinary, disposable, infection and more. The world medical device industry is expected to grow at a compound annual growth rate of 4.0 percent between 2010 and 2015.

The global market for medical equipment and supplies is valued at US $ 254.6 billion in 2010. The CAGR for the 2006-2010 periods is 5.3%, although this masks the major reduction in growth which has occurred in 2009 and 2010. Many markets which experienced very rapid growth in the years prior to 2009 have experienced a fall due to reduced spending, exchange rate movements or a combination of both. Market growth is expected to resume in 2011 and beyond, although it will not be as rapid as before the global economic downturn. Espicom projects that the total market will rise to US$310.9 billion by 2015, equal to US$54 per capita. Some of the best prospects for growth will be in the developing markets of Asia, Latin America and Central Europe, while traditional Western markets represent more steady performers. The USA is the world largest market, valued at US$94.9 billion in 2010, equal to 38.6% of the global total. Japan is the second largest, with US$23.9 billion (9.7%), and Germany third with US$18.9 billion (7.7%) . All three count among the world richest markets, although Switzerland and the Scandinavian countries generally outperform them in terms of per capita spending. The value of the four BRIC markets (Brazil, Russia, India and China) amounted to US$18.1 billion in 2010, equal to 7.4% of the world total. The value of the Chinese and Russian markets in particular have grown strongly in recent years, and China is set to further climb the rankings. While Chinese per capita spending remains very low, the market is the 7th largest in the world in 2010 and is set to become the fourth largest by 2015.

According to US Medical Device Industry Outlook, released by Frost & Sullivan, the total revenue generated from medical device market in the U.S. was close to $83 billion in 2006. The revenue in the U.S. medical device market is expected to grow average 11.7% annually until 2011. The revenue from cardiovascular devices was the highest, $21.3 billion with the expected annual growth rate at 7.6% until 2013, the cardiovascular device industry is expected to be remaining the biggest industry in the U.S. medical device market for next several years. The total cardiovascular device market in the U.S. is forecasted to reach $35.6 billion by way of revenues by 2013.

In 2007, Global Industry Analysts, Inc. reported that the estimated size of the world medical laser system market US$4 billion in 2007. United States is the largest market for medical laser systems worldwide at an estimated US$2.4 billion in 2007. Europe is the second largest market followed by Japan at a distant third. United States and Europe together account for about 82 percent of the global share. The global and regional markets are expected to grow at a compound annual grow rate ranging between 9% and 13%.

Aesthetic laser applications for cellulite reduction require ongoing follow-up maintenance procedures, resulting in recurring revenue source. It is estimated that 80% of adult women have cellulite in U.S. Revenue from body shaping procedures is forecasted to grow to $61.4 million in 2012. A recent 2008 survey conducted by the ASDS reported that consumers are electing minimally invasive treatments to boost their appearance and be more competitive in workplace. (US Direct-energy Based Medical Devices Market – Aesthetic; Cardiovascular; Gynecology; Orthopedics; Urology. Frost & Sullivan, March, 2011)

Body Contouring Devices market is composed of Cellulite Reduction Device, Fat Reduction Device and Skin Tightening Device mainly. By 2012, Body Contouring Device market in the United States will be expanded because of the increases of SPA facilities and the increasing demands for patients who are interested in invasive and non invasive treatments. Cellulite removal treatment and skin tightening is used in Plastic Surgery and cosmetic skin medical area also and this makes it possible the body contouring markets continuously increase. Especially the combination of the traditional fat reduction and laser skin tightening will effects on the growth of the body contouring device market.

Medical Device (MD) Resource: Body Contouring Device Market, by Indication, US (US $), 2006-2012

Year	Cellulite Reduction Device Market Value (US$M)	Growth (%)	Fat Reduction Device Market Value (US$M)	Growth (%)	Skin Tightening Device Market Value (US$M)	Growth (%)	Total Market Value (US$M)	Growth (%)
2006	$67.7		$38.1		$38.2		$144.1
2007	$78.7	16.2%	$65.2	70.9%	$43.9	14.9%	$187.8	30.4%
2008	$92.7	17.7%	$74.0	13.5%	$50.3	14.5%	$216.9	15.5%
2009	$112.8	21.7%	$120.3	62.7%	$57.5	14.3%	$290.6	34.0%
2010	$139.1	23.3%	$148.2	23.2%	$65.7	14.3%	$352.9	21.5%
2011	$172.4	24.0%	$175.7	18.6%	$75.0	14.3%	$423.1	19.9%
2012	$214.4	24.3%	$202.9	15.5%	$85.8	14.3%	$503.0	18.9%
CAGR (’08-’12)		23.3%		28.7%		14.3%		23.4%

Meridian Co., Ltd. was incorporated under the laws of Korea on April 19, 1994 as a private company. The Company operates corporate head office and manufacturing plant are located at 4F, 196-35, Anyang-Dong, Manan-Gu, Anyang-Si, Gyeonggi-Do, Korea 430-857.

As of December 31, 2010, the Company had one subsidiary. The acquisition dates and Meridian Co., Ltd.'s ownership percentages of its consolidated subsidiaries as at December 31, 2010, 2009 and 2008 are as follows:

			Acquisition	Percentage ownership at December 31,
Subsidiary	Country of Incorporation	Primary Business	Date	2010	2009	2008
Meridian America Medicals, Inc.	USA	Wholesale and retail of medical equipment	March 4, 2002	75.76%	75.76%	75.76%
Meitian Co., Ltd	Korea	"	September 29, 2005	Dissolved	Dissolved	100.00%

On September 29, 2005, Meridian acquired 100% ownership of Rapha & Health Co., Ltd. for 50 million Won in cash to systemize its sales process in domestic (Korea) market. On June 7, 2006, Rapha & Health Co., Ltd. changed its name to Meitian Co., Ltd. However, Meitian Co., Ltd. ceased its operation in April 2008, so that Meridian could concentrate its resources on the overseas markets.

Mr. Park graduated from the Seoul National University with a degree in Sociology. From 1991 to 1998 he was the head of the Development & Planning Department of Kia Techono Co., Ltd. He was the Founder of Eduevision Korea Co., Ltd. in 1999. Mr. Park joined Meridian in 2002 as the head of the Planning Department and CFO and was appointed as CEO in November 2009.

Mr. Myung graduated from the Pusan University with a degree in Computer Statistics. From 1985 to 1991 he worked in the R&D department of LG Electronics. He was appointed as a chief of Planning Department of Medison Co., Ltd. in 1991 and later appointed and served as a director of international sales. While he was in charge of international sale in Medison, he contributed on significant growth of oversea sales in Europe, North America, Japan and Southeast Asia and the oversea sales was increased from US$20M to $70M. He also served as a director of Management & International Marketing Business of Korea Strategic Partners that the primary businesses are dental X-ray and panoramic sales in Korea from 2001 to 2007. Mr. Myung joined Meridian in 2007 as an international sale director and was appointed as CEO in April 2009. In November 2009, Mr Myung resigned and appointed Secretary and CFO.

Mr. Kim graduated from Seoul National University a degree in Anthropology in 1989. From 1995 to 2007 he was the manager of the Security Trading department of Daewoo Securities. In April 2006, he was appointed a Director of Meridian.

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 Coordination and the Vice President of a Joint Corporation with Russia (Ultramed) as a director of Medison Co., Ltd. Since the Company's founding until October 2009, Mr. Myeong had been the President and CEO of the Company and was the founder of the Company. In March 2011, Mr Myeong appointed Secretary and CFO and Director.

Mr. J. Richard Landreth graduated from the Guiford College with a degree in Administrative Science-Management. From 1969 to 1986 worked in Flakt Products as a master scheduler. From 1987 to 2000 he worked in the manufacturing department of Grass America. From 2001 to present he served as office manager in Salvage Discount Inc. In March 2011, Mr J. Richard appointed Director.

The Company relocated its factory from Kangwon Province to Seoul in November 2005. The previous factory in Kangwon Province (687-6, Sangohan-Ri, Hongchun-Eup, Hongchun-Kun, Kangwon-Do, Korea) was disposed to repay its debts to pre-emptive creditors and Chohung Bank.

The Company signed the lease contract for its current office and factory at 4F, 196-35, Anyang-Dong, Manan-Gu, Anyang-Si, Gyeonggi-Do, Korea in October 2009. The Company's products are assembled from purchased and manufactured components at its factory. Virtually all of the components making up the Company's products are readily available from domestic suppliers. Some of the components have been designed by the Company and/or are custom manufactured to its specifications.

The following discussion and analysis is based on and should be read in conjunction with the Company's audited consolidated financial statements, including the notes thereto, and other financial information appearing elsewhere herein. The audited consolidated financial statements have been prepared using Korean Won and presented in accordance with accounting principles generally accepted in the United States.

The following table sets forth, for the periods indicated, our consolidated revenue by product:

The following table sets forth, for the periods indicated, our consolidated revenue by market:

The following table sets forth, for the periods indicated, financial data as percentage of total revenues by item as a percentage of the amount over the comparable period in the previous years.

	Percentage of Sales For the year ended
	December 31,
	2010		2009		2008
Sales	100		100		100
Cost of sales	52.5		32.1		28.4
Gross profits	47.5		67.9		71.6
Operating expenses	120.7		217.3		78.5
Loss from operations	(73.2	)	(149.4	)	(6.9	)
Other income (expenses)	(32.4	)	(32.4	)	12.1
Minority interest	-		-		-

The sales revenue of the Company for the year ended December 31, 2010 decreased by 2.53% to 1,338,690 thousand Won from 1,373,379 thousand Won for the year ended December 31, 2009. The slight decreases in the sales revenue during the year ended December 31, 2010 and 2009 were mainly attributable to:

In 2010, the increase in manufacturing cost caused by rising raw material cost resulted in the decrease of gross profit. The manufacturing cost of 2010 was 702,851 thousand won, compared to 441,416 thousand won in 2009. The Company intended to differentiate its product from competitors’ products, especially for the LAPEX BCS and BCS Pro products. The differentiation strategy and changes in the specification of the products need more sophisticated and high-performance parts. In addition, some parts of the supply price rises were the other causes of increase in manufacturing cost. In 2011, the Company is trying to find out competitive new vendors for diversifying the suppliers for the decreasing in the price of raw materials.

The Company’s operating loss has decreased to 979,457 thousand Won for the year ended December 2010 from loss of 2,053,055 thousand Won in 2009 and from the loss of 228,105 thousand Won in 2008. The decrease in the operating loss in 2010 was primarily due to the decrease of operating expenses. Operating expenses as a percentage of total sales was to 120.7% for the year ended December 31, 2010, as compared to 217.3% in 2009 and 78.5% in 2008. The decrease compare to 2009 was mainly attributable to decrease in salary cost by 52% to 262,625 thousand Won in 2010 from 550,253 thousand Won in 2009 and decrease in bad debt expenses by 50.5% to 614,137 thousand Won in 2010 from 1,240,146 thousand Won in 2009.

Research and development expenses consist primarily of payroll, depreciation expense and other overhead expenses which are all expensed as incurred until technological feasibility is reached. The Company has expensed 170,506 thousand Won, 283,237 thousand Won and 392,902 thousand Won as research and development expenses during the years ended December 31, 2010, 2009 and 2008, respectively.

Other expense was 433,901 thousand Won in 2010, as compared to other expense of 444,353 thousand Won in 2009 and other expense 401,809 thousand Won in 2008. This was primarily due to 230,784 thousand Won of interest expense and 54,606 thousand Won of loss on disposal of inventory. For the year ended December 31, 2010, the Korean Won appreciated by approximately 2.5% against the U.S. dollar compared to the exchange rate for the year ended December 31, 2009. This appreciation resulted loss on foreign currency transactions to the Company.

The following table sets forth the summary of our cash flows for the periods indicated:

For the convenience of the reader, the Won amounts are expressed in US$ at the rate of Won 1,130.6 to US$1.00, the exchange rate announced by the Federal Reserve Bank of New York on December 31, 2010.

Net cash provided by (used in) operating activities was 100,829 thousand Won ($89,181) in 2010, (17,698) thousand Won in 2009 and (282,775) thousand Won in 2008. The main reason of the positive net cash provided in operating activities is from the bad debt expenses and decrease in operation assets and increase of operation liabilities.

Net cash provided by (used in) investing activities was 12,064 thousand Won ($10,970) in 2010, (35,000) thousand Won in 2009 and (68,484) thousand Won in 2008. The main reason of the positive net cash from investing activities is the disposal of tangible asset for the year ended 2010. The main reason of the negative net cash in investing activities for the year ended 2009 and 2008 was the increase of the tangible asset acquisitions and the increase of short-term loan.

Net cash used in financing activities was 111,100 thousand Won ($98,265) in 2010, mainly due to the repayment of short-term and long-term borrowings. We generated positive cash flow from financing activities of 55,401 thousand Won in 2009 and 250,321 thousand Won in 2008 reflecting the increase in our short-term borrowing.

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.

The Company has 5 registered and pending patents, 2 design rights and 7 trademarks at the Korea and Japan Industrial Property Office. The Company also has 1 pending patent under the Patent Cooperation Treaty at China. 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.

TECHNOLOGY DESCRIPTION	REGISTRATION	DATE OF REGISTRATION
	OR PUBLICATION NUMBER	OR PUBLICATION
(PATENTS)
Diagnostic device using the electric features of the human body	KR130791	November – 97
Automatic detection of meridians by probe device	KR210233	April – 99
Pulse formation analysis device	KR0368021	December – 02
Laser beam irradiation device	KR0457964	November – 04
Adipose Resolve Apparatus for Low-Power LASER: Korea	KR0653441	November – 06
Adipose Resolve Apparatus for Low-Power LASER: PCT	PCT – KR20061000694 WO 2006/093384 A1	September – 06

Adipose Resolve Apparatus for Low-Power LASER: Japan	JP4143114	June – 08
Adipose Resolve Apparatus for Low-Power LASER: China (pending)	Pub.#: CN101115449	January – 08

(DESIGN)
Electrode holder for laser treatment	0302314	June – 02
Electrode for laser treatment	0302315	June – 02

(TRADEMARK)
Lapex	0500915	September – 01
Biomeridian	0522196	June – 02
Pulsecare	0538120	December – 02
Mcview	0531965	October – 02
Meridian CI Logo	0685047	November – 06
DPA
USA	3658804	July – 09
Korea	40-0755763	August – 08
Lapex
USA	3523481	December - 08
EU	006327399	September - 08
Japan	5134672	May – 08
China	6312375	February - 10

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.

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, Taiwan, South Africa 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. The table below includes all the regions in the world where Meridian’s products have been approved for sale.

The operations of the Company have been significantly affected, and may continue to be affected for the foreseeable future, by the general unstable global economic conditions, especially U.S and Europe region. The curtailed economic activity in the Company’s traditional markets resulted in a significant decline in the Company’s sales, production and inventory from 2009 to 2010. The Company is actively seeking to expand its sales into North America, Europe and the Company is in transition of its target market, mainly preventive medicine and aesthetic laser market with Lapex BCS and DPA. These two products contributed 82.2% of the total sales revenue in 2010 and 78.4% in 2009. In 2010, the sales portions from North America, Europe and Asia (excluding Korea) were 63.9%, 24.4% and 3.7% of the total revenue of the Company.

		Payments due (by period) (Korean Won (\) in thousands)
				Less than						more than
Contractual Obligations		Total		one year		1-3 years		3-5 years		5 years
Long-term accounts payable	\	863,102	\	863,102	\	-	\	-	\	-
Operating lease obligations		50,000		50,000		-		-		-

Long-term debt obligations ⁽¹⁾		4,642,146		3,343,983		1,298,163		-		-
Grand total	\	5,555,248	\	4,257,085	\	1,298,163	\	-	\	-

(1) See Note 11. “Long-Term Borrowings” of consolidated financial statements.

		Salary	Bonus	Accrued Severance
Name & Principal (Position)	Year	(Korean Won	(Korean Won	Benefits (Korean Won	All Other
		(\))	(\))	(\))	Compensation

Park, In Beom (Director, President, CEO appointed in November 2009)	2010	50,400,000	Nil	21,700,000	Nil

John Y.C. Myung (Director, Secretary, CFO resigned in March 2011)	2010	54,799,630	Nil	11,552,740	Nil

Hyung Kyoon Kim (Director resigned in March 2011)	2010	Nil	Nil	Nil	Nil

Myeong, Hyeon-Seong (Director, Secretary, CFO appointed in March 2011)	2010	58,800,000	Nil	79,103,676	Nil

J, Richard Landreth (Director appointed in March 2011)	2010	Nil	Nil	Nil	Nil

*Hyeon Seong Myeong was granted options for 2,218 shares of the Company’s common stock at the price of 680 Won in March 2001 (expired in February 2008).

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

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

Department	Number of Employees

CEO	1
CFO	1
Finance and Accounting	3
Sales and Customer Support	1
Research and Development	3
Technical Support	2
Purchasing	1
Quality Control	2
Total	14

The following table sets forth certain information regarding the beneficial ownership of the common stock of the Company as of December 31, 2010 and June 30, 2011, (a) each of the Company’s directors and officers, and (b) all directors and officers of the Company, as a group:

Name and address of beneficial owner	Amount Stock	Percentage of	Amount Stock	Percentage of
	Beneficially		Beneficially
and position with the company	Owned as of Dec. 31,	Class as of	Owned as of June	Class as of June 30,
	2010	Dec.31,2010	30, 2011	2011

In Beom Park (Director, President, CEO appointed in November 2009) #909-202, JungSan Maeul 9 Danji Apt, Jungsan-dong, Ilsandong-gu, Goyang-si, Gyeonggi-do, Korea	Nil	Nil	Nil	Nil

John Y.C. Myung (Director, Secretary, CFO resinged in March 2011) 476-2, munhwa-dong, joong-gu, Deajeon-si, Korea	Nil	Nil	Nil	Nil

Hyung Kyoon Kim (Director resinged in March 2011) Dongil-hivill apt, 2102-802, joong-dong, kiheung-gu, Yongin-si, Gyeonggi-do, Korea	Nil	Nil	Nil	Nil

Hyeong Seong Myeong (Director, Secretary, CFO appointed in March 2011) 201-2101, Hyundai I-Park 2cha APT. 815,Chang-dong, Dobong-gu, Seoul, Korea	971,500 common shares	2.77%	971,500 common shares	2.65%

J. Richard Landreth (Director appointed in March 2011) 4307 Kernersville Road, Kernersville, N.C. 27284, USA	Nil	Nil	Nil	Nil

All officers and Directors as a Group	971,500	2.77%	971,500	2.65%

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

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 per share. The options vested on March 19, 2004 and were exercisable until March 18, 2008. At December 31, 2010 there was no stock option plan outstanding.

The following table sets forth information with respect to the beneficial ownership of our shares as of December 31, 2010 and June 30, 2011), by each person known to us to own beneficially more than five percent (5%) of our shares.

Name and address	Amount Stock	Percentage	Amount Stock	Percentage of	Number of Stock
		of Class		Class	Option
	Beneficially Owned	of Dec.31,	Beneficially Owned as of	of June 30,	Held
	As of Dec. 31 2010	2010	June 30 2011	2011

The Hong Group of Companies including:	3,171,400 common shares	9.04%	3,171,400 common shares	8.67%	Nil
Solbon Venture Investment Co. Ltd. (931,175 shares),
Cheongdam Spopia 1st, Cheongdam dong,
Gangnam-Gu Seoul Korea
Mok-Won Assets Management Co. Ltd(1,375,000 shares),
2004 Ho, Anam tower 702-10
Yuksam-dong Gangnam-ku, Seoul, Korea
Bio & Medical Research Co. Ltd. (524,425 shares),
702-10 Yuksam-dong, Gangnam-ku, Seoul, Korea
Ki-tae Hong (127,800 shares)
Cheongdam Spopia 1st, Cheongdam dong,
Gangnam-Gu, Seoul, Korea
Hye-sook Lee (213,000 shares)
Cheongdam Spopia 1st, Cheongdam dong,
Gangnam-Gu, Seoul, Korea

The Company has legally issued its shares and complied with the filing requirements pursuant to the SEC regulations. However, 13,975,159 common shares issued through S-8 registrations, (i) for acquisition of By George Holdings, (ii) debt-for-equity swap on October 21, 2004 and (iii) service fee for IR and marketing activities, have not been included in the Korean Commercial Registration Office due to the different requirements of the share issuance between the US and Korean Commercial Laws. The number of outstanding shares and capital stock as of December 31, 2008 in SEC and in Korean Commercial Registration Office are as follows:

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 or on 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 subsidiary are disclosed in the Note 18 to the consolidated financial statements.

On February 27, 2004, the Company received approval for a debt restructuring plan for a total of 4,697,927 thousand Won 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 4,697,927 thousand Won of the Company’s debt. An application for the restructuring plan was subsequently filed with Chooncheon District Court and approved by the court on the same day.

Meridian America Medical Inc., a subsidiary of Meridian Co., Ltd. was served in October 2007 as a defendant in a lawsuit claiming trademark infringement and false advertising filed by Therapy Products, Inc. d/b/a Erchonia Medical to the United States District Court for the Southern District of New York. The Court dismissed Erchoina’s claims in May 2009.

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.

On April 30, 2008, Meitian Co., Ltd., a subsidiary in Korea, closed down and discontinued its operations. The decision was made by management to concentrate the Company’s resources on growing overseas markets.

The common shares of the Company began trading on the OTC Bulletin Board on February 13, 2002 under the symbol MRDAF. The following table sets forth the high and low sales of prices of our common shares on the OTC Bulletin Board for the periods indicated.

	OTC Bulletin Board
	High (U.S.$)	Low (U.S.$)
Annual Highs and Lows
2009	0.3	0.06
2008	1.35	0.16
2007	1.54	0.4
2006	0.74	0.11

Quarterly Highs and Lows
2010
Fourth Quarter	0.15	0.02
Third Quarter	0.17	0.05
Second Quarter	0.19	0.05
First Quarter	0.21	0.07
2009
Fourth Quarter	0.1	0.06
Third Quarter	0.16	0.07
Second Quarter	0.25	0.09
First Quarter	0.3	0.09

The transfer of our common shares is managed by our transfer agent, Computershare Investor Services (formerly called Pacific Corporate Trust Company), 3rd Floor – 510 Burrard Street, Vancouver, British Columbia, V6C 3B9 (Telephone: 604.689.9853; Facsimile: 604.689.8144) .

Our common shares are quoted on the Over-the-Counter Bulletin Board (as they have been quoted since February 13, 2002). Our symbol is "MRDAF" and our CUSIP number is Y6020X 10 3.

The Company is authorized to issue 100,000,000 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, 2010 there were 35,094,156 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.

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.

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 from the capital surplus or legal reserve to stated capital in the form of free shares. Such distribution must be made pro rata.

The authorized but unissued shares may be issued at such times and, unless otherwise provided in the Commercial Code, upon such terms as the board of directors of a company may determine. The new shares must be offered on uniform terms to all shareholders who have preemptive rights and who are listed on the shareholders' register as of the record date. The Company's shareholders are entitled to subscribe for any newly issued shares in proportion to their existing shareholdings, provided that pursuant to the Articles of Incorporation, new share that are (i) issued by public offering in accordance with the Securities and Exchange Law of Korea, (ii) represented by depositary receipts, (iii) issued to foreigners in accordance with the Foreign Investment Promotion Law of Korea within 33% of the total number of shares outstanding, (iv) issued to the Company's employee stock ownership association up to 20% of the newly issued shares (to the extent the total number of shares so subscribed and held by the members of the employee stock ownership association does not exceed 20% of the total number of shares), (v) issued outside Korea for listing on a foreign stock exchange or foreign securities market trading securities by means of an electronic or a quotation system, (vi) issued according to a stock option plan, (vii) issued to a domestic corporation having a strategic relationship with the Company in connection with the Company's management or technology of up to 5% of the total number of issued and outstanding shares after such issuance, (viii) issued as consideration for the acquisition of the stock or assets of another company up to less than 20% of the total number of issued and outstanding shares, or (ix) issued through general public offering in accordance with the Securities and Exchange Law of Korea may be issued pursuant to a resolution of the board of directors to persons other than existing shareholders. Under the Commercial Code, a company may vary, without shareholder approval, the terms of such 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.

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

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

Registration of Shareholders and Record Date Computershare Investor Service of Vancouver BC Canada is the Company's sole transfer agent. Computershare Investor Service 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.

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.

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.

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.

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.

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.

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.

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 for the 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

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.

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.

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.

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.

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.

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.

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.

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:

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, 2010, the Company had an aggregate 1,276,848 thousand Won export sales, accounting for 95.4% 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, 2010, 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, 2010, the Company estimates that the payment receivable from its overseas customers will decrease by approximately 2,607 thousand Won ($2,289) in 2010. 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, 2010, 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.

The Company currently has the default tax payment of 30,194 thousand Won ($26,706) to the federal tax office and the default interest payment of 919,804 thousand Won ($813,554).

Due to the recurring losses from operations, Meridian was not able to meet the repayment schedule. As of December 31, 2010, Meridian has not paid 2,409,902 thousand Won of principal and 918,461 thousand Won of accrued interest outstanding to financial institutions, and 863,102 thousand Won of accounts payable to various vendors.

The details of the debt restructuring of the Company, which is disclosed in Item 8 and Note 2 to the consolidated financial statements in this report, were reported in the form 6-K filed on March 28, 2004.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Our management has evaluated, with the participation of our Chief Executive Officer and Director, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2010. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our Chief Executive Officer and Director concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Director, as appropriate to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed by, and under the supervision of, our principal executive, principal operating and principal financial officers, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management has completed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2010 based on criteria in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO" ). Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2010.

This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits the company to provide only management's report in this annual report.

There has been no change in our internal control over financial reporting that occurred during the year covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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.

(a) Audit Fees: In the fiscal year 2010, the Company was charged 60,186,885 Won ($50,092) for professional services rendered by its auditors for the audit of the Company's annual financial statements or services normally provided in connection with statutory and regulatory filings for the fiscal year 2010.

(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..

(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 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

We have audited the accompanying consolidated balance sheets of Meridian Co., Ltd., and subsidiary (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of operations, shareholders’ deficiency, and cash flows for the years ended December 31, 2010, 2009 and 2008. Our responsibility is to express an opinion on the consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, such consolidated financial statements present fairly, in all material respects, the financial position of Meridian Co., Ltd. and subsidiary as of December 31, 2010 and 2009, and the results of their operations and cash flows for the years ended December 31, 2010, 2009 and 2008 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 2 to the consolidated financial statements, the Company's significant operating losses and working capital deficit 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.

Meridian Co., Ltd. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2010 and 2009
(in thousands of Korean Won (\))

The accompanying notes are an integral part of these Consolidated Financial Statements.

(Continued)
Meridian Co., Ltd. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2010 and 2009
(in thousands of Korean Won (\))

The accompanying notes are an integral part of these Consolidated Financial Statements.

Meridian Co., Ltd. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Years Ended December 31, 2010, 2009 and 2008
(in thousands of Korean Won (\), except per share amounts and number of shares)

The accompanying notes are an integral part of these Consolidated Financial Statements

Meridian Co., Ltd. and Subsidiaries
Consolidated Statement of Changes in Shareholders' Deficiency
For the Years Ended December 31, 2010, 2009 and 2008
(in thousands of Korean Won (\), except shares data)

The accompanying notes are an integral part of these Consolidated Financial Statements.

Meridian Co., Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2010, 2009 and 2008
(in thousands of Korean Won)

The accompanying notes are an integral part of these Consolidated Financial Statements.

Meridian Co., Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands of Korean Won (\ ))

Meridian Co., Ltd. (“Meridian”), incorporated on April 19, 1994 under the laws of the Republic of Korea ("Korea"), and its subsidiary (hereinafter collectively referred to as the “Company”), are in the business of developing, manufacturing and selling of integrated medical equipment in domestic (Korea) and overseas markets.

On March 4, 2002, Meridian acquired 100% ownership of Meridian America Medicals, Inc. located in the city of Irvine, California, USA to establish distribution post for the North American market. On December 13, 2004 and February 15, 2005, Meridian America Medicals, Inc. (“MAMI”) issued new common stock, of which the shares were entirely subscribed by a non-controlling shareholder, Meridian Medical, Inc. (“MMI’) Consequently; the ownership by Meridian was diluted from 100% to 75.76% .

On September 29, 2005, Meridian acquired 100% ownership of Rapha & Health Co., Ltd. for \ 50 million in cash to systemize its sales process in domestic (Korea) market. On June 7, 2006, Rapha & Health Co., Ltd. changed its name to Meitian Co., Ltd. However, Meitian Co., Ltd. ceased its operation in April 2008, so that Meridian could concentrate its resources on the overseas markets.

In addition to the large scale net loss \ 2,497,408 in 2009, the Company had recorded \ 1,413,358 net loss in this fiscal year. The Company has an accumulated deficit of \ 19,121,226 and working capital deficits of \ 8,221,694 of as of December 31, 2010. As of December 31, 2010, the Company’s principal source of liquidity is \ 7,423 of cash and \ 94,915 of trade and other accounts receivable. Such conditions including the Company's inability to comply with debt restructuring approved by Court as of December 31, 2009 and 2010 and its negative working capital position raise substantial doubt about its ability to continue as a going concern. These operating results occurred while the Company continues to develop and commercialize new products. These factors have placed a significant strain on the financial resources of the Company. The ability of the Company to overcome these challenges depends on its ability to continue to generate higher revenue, and achieve positive cash flows from continuing operations, profitability and continued sources of debt and equity financing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, classification of liabilities, or any other adjustments that might result should the Company be unable to continue as a going concern.

On August 4, 2003, when Meridian suffered deteriorated liquidity, the bank accounts of Meridian were suspended from the transactions such as check clearing and direct deposits. In addition, on February 27, 2004, Chooncheon District Court in Korea approved the Company’s debt restructuring plan (or composition) for the total debt of \ 4,697,927, which constituted approximately 68% of the total outstanding borrowings and payables of Meridian at that time. The creditors who have agreed to the debt restructuring include the following:

Account	Creditor		Amount
Borrowings	Woori Bank	\	391 787
	SMIII ABS Specialty Co., Ltd.		1,000,000
	Rainbow Specialty Securitization Co., Ltd.		500,000
	Korea Technology Credit Guarantee Fund		1,151,884
	Small Business Corporation		300,000
	Korea Exchange Bank		125,831
	Shinhan Bank		41,612
	Subtotal – financial institutions		3,511,114
Accounts payable	Various vendors		1,186,813

	Total	\	4,697,927

The original terms of the borrowings, which include secured \ 34,200 and unsecured \ 3,476,914 of debts to various financial institutions, were alleviated. The new terms require installment payments over 7 years through 2013 at the fixed interest rate of 3.5% per annum. All accrued and unpaid interests on the borrowings were forgiven.

New terms were obtained for the accounts payable due to various vendors, which require installment repayments over 3 years through 2007 at no interest.

In January 2005, Woori Bank exercised its security right on an apartment owned by Meridian. The proceeds of \ 42,837 from foreclosure were used to pay debt principal, interest and other direct expenses related to the foreclosure.

Aside from the debt restructuring, Meridian had a borrowing from Chohung Bank (Chohung Bank has been merged into Shinhan Bank as of April 1, 2006), which was not included in the original restructuring plan, as the bank did not agree to the terms. In December 2005, Chohung Bank exercised its security right on the land and building, which had been provided as collaterals by Meridian. The proceeds of \ 883,308 from the foreclosure, was paid to preemptive other creditors and Chohung Bank. Subsequent to the foreclosure, the original debt restructuring plan was modified to include the outstanding principal of \ 1,074,455 to Chohung Bank. The repayments under the modified plan were scheduled as follows:

	2007	2008	2009	2010	2011	2012	2013	Total
Principal	\ 650 757	\ 650 757	\ 650 757	\ 650 757	\ 650 757	\ 650 757	\ 650 756	\ 4 555 298
Interest	159,435	136,659	113,883	91,106	68,329	45,553	22,777	637,742
Total	\ 810 192	\ 787 416	\ 764 640	\ 741 863	\ 719 086	\ 696 310	\ 673 533	\ 5 193 040

In December 2008, Korea Technology Credit Guarantee Fund reduced their original principal from \ 1,151,884 to \ 1,142,064. The repayments under the re-modified plan were scheduled as follows:

	2007	2008	2009	2010	2011	2012	2013	Total
Principal	\ 462 656	\ 649 082	\ 649 082	\ 649 082	\ 649 082	\ 649 082	\ 649 081	\ 4 357 147
Interest	447,346	158,465	162,399	150,251	68,180	45,461	22,727	1,054,829
Total	\ 910 002	\ 807 547	\ 811 481	\ 799 333	\ 717 262	\ 694 543	\ 671 808	\ 5 411 976

However, due to the recurring losses from operations, Meridian was not able to meet the repayment schedule. As of December 31, 2010, Meridian has not paid \ 2,409,902 of principal and \ 918,461 of accrued interest outstanding to financial institutions, and \ 863,102 of accounts payable to various vendors. However, the Company continuously tries to pay overdue principal and interest under the consultation with the creditor.

The status of the restructuring plan is reported to Chooncheon District Court, Korea every quarter. However, under the restructuring plan (or composition), the Court does not have authorities to dictate or supervise day-to-day financial activities, which is typical for court receivership. Therefore, any additional debt or equity financing could be made with no intervention from the Court.

Meridian carried out an aggressive global marketing in last 3 years with the funds raised in late 2007. Despite of this effort, due to the global financial crisis and the entrance of imitation machines in export market, the company’s performance has stagnated in 2009 and 2010. However, the Company has a plan for attract new foreign investment that will improve financial structures and reinforce the R&D activity and marketing activity.

The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

The accompanying consolidated financial statements include the accounts of Meridian, the parent company, and its majority-owned subsidiary, Meridian America Medicals, Inc. and its wholly-owned subsidiary, Meitian Co., Ltd. All significant inter-company balances and transactions have been eliminated. Non-controlling interest in consolidated financial statements represent the share of Meridian Medical Inc. who owns 24.24% of common stock of Meridian America Medicals, Inc.

Revenue is recognized pursuant to applicable accounting standards including Securities and Exchange Commission ("SEC" ) Staff Accounting Bulletin ("SAB" ) No. 101 (SAB 101), "Revenue Recognition in Financial Statements" , and SAB 104, Revenue Recognition. SAB 101 as amended and SAB 104 summarize certain points of the SEC staff's views in applying generally accepted accounting principles to revenue recognition in financial statements and provide guidance on revenue recognition issues in the absence of authoritative literature addressing a specific arrangement or a specific industry. The Company's revenue recognition policy complies with the requirements of SAB 101 and SAB 104.

Revenues from the sale of products and the rendering of services are recognized when the significant risks and rewards of ownership of the goods have been transferred to the customer and collectability is reasonably assured. The Company recognizes revenue from sales of products when the products are shipped to the customers. For medical equipment, the Company's sales policy does not allow returns unless the products are defective. The customer's acceptance is governed by the terms on the contract or arrangement, and any transactions not meeting the predetermined conditions are not recorded as revenue.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. The most significant estimates and assumptions relate to the allowance for doubtful accounts, inventory write-down due to decline in market value and deferred tax valuation allowance. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the estimates.

Cash and cash equivalents include all cash balances and highly liquid investments, including term deposits and short-term bonds which are readily convertible into known amounts of cash and have an original maturity of three months or less. For the purposes of the statements of cash flows, the Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.

Allowance for doubtful accounts is estimated based on analysis of individual accounts and past experience of collection. When circumstances indicate that collection of an accounts receivable is doubtful, an allowance and a charge against earnings are recognized. When circumstances indicate that collection of an accounts receivable is not to be realized, the outstanding accounts receivable and the associated allowance are written off.

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, short-term and long-term investments and accounts receivable. The Company places its cash primarily in deposit accounts with reputable financial institutions. The Company's accounts receivable are derived primarily from revenue earned from customers located in the U.S., Europe and Korea. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collaterals from its customers. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. There was \ 522,823 write off in the year ended December 31, 2010 and was no write off in 2009.

As of December 31, 2010, the Company had one customer that accounted for 77% of accounts receivable. At December 31, 2009, the Company had one customer that accounted for 65% of the total outstanding accounts receivable.

Under the Korean Value-Added Tax ("VAT") law, the Company pays a 10% VAT on each purchase of VAT-taxable goods or services("input VAT") and collects VAT from its customers equal to 10% of sales ("output VAT"). The net amount is recorded as prepaid VAT, if the input VAT is greater than the output VAT, or VAT payable if the output VAT is greater than the input VAT.

Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated selling cost. The cost of inventories is determined on the average cost method. The Company reviews the components of inventories on a regular basis for excess or obsolete inventories and makes appropriate adjustments to the value of inventories in the period that such excess or obsolete inventories are identified.

Investee entities, in which the Company may exercise significant influence, but not control, are accounted for under the equity method of accounting. Whether the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the entity's board of directors and ownership level, generally 20% to 50% interest in the voting securities of the entity including voting rights associated with the Company's holdings in common, preferred and other convertible instruments in the entity. Under the equity method of accounting, the Company's share of the earnings or losses of these entities is included in the equity income (loss) section of the consolidated statements of operations.

Determination of impairment is based on the consideration of such factors as operating results, business plans and estimated future cash flows. Net realizable value is determined through the use of such methodologies as discounted cash flows, valuation of recent financings and comparable valuations of similar companies.

Property, plant and equipment are stated at cost less accumulated depreciation. Significant additions or improvements extending useful lives of assets are capitalized. However, normal maintenance and repairs are charged to expense as incurred.

Depreciation is computed by the declining-balance method using rates based on useful lives of 4 years.

The Company reviews for the impairment of long-lived assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the 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 10 years.

Employees who have been with the Company for more than one year are entitled to lump-sum payments based on current rates of pay and length of service when they leave the Company. The Company's estimated liability under the plan which would be payable if all employees left on the balance sheet date is accrued in the accompanying balance sheets.

Through March 1999, under the National Pension Plan in Korea, the Company was required to transfer a certain portion of retirement allowances of employees to the National Pension Fund. The amount transferred will reduce the retirement and severance benefit amount to be payable to the employees and is accordingly reflected in the accompanying financial statements as a reduction from the accrued severance benefits liability. Since April 1999, however, under a new regulation, such transfers to the National Pension Fund became no longer required.

The Company includes shipping and handling costs in selling, general and administrative costs. Shipping and handling costs for the years ended December 31, 2010, 2009 and 2008, amounted to \ 2,623, \ 4,202, and \ 13,440, respectively.

Research and development costs consist primarily of payroll, depreciation expense and other overhead expenses which are all expensed as incurred until technological feasibility is reached. The Company has expensed \ 170,506, \ 283,237 and \ 392,902 during the years ended December 31, 2010, 2009 and 2008, respectively.

The Company expenses advertising expenses as they are incurred. Advertising expenses for the years ended December 31, 2010, 2009 and 2008 were \ 5,099, \ 10,372 and \ 45,290, respectively.

The estimated fair value of amounts reported in the consolidated financial statements have been determined using available market information and valuation methodologies, as applicable. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and all other current assets and liabilities approximate their fair value because of their short term maturities at December 31, 2010 and 2009, unless otherwise stated. The fair value of non-current assets and liabilities approximate their carrying value unless otherwise stated. The fair value of the Company's long-term debt is based on interest rates that would be available to the Company for the issuance of debt with similar terms.

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.

Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders' deficiency. The Company's other comprehensive income is primarily comprised of foreign currency translation gain (loss).

The Company applies ASC 830, Foreign Currency Matters, for translating foreign currency into Korean Won in its consolidation of the financial statements. Upon consolidation of the Company's foreign subsidiary into the Company's consolidated financial statements, any balances with the subsidiary denominated in the foreign currency are translated at the exchange rate at year end. The financial statements of Meridian America Medicals, Inc. ("MAMI" ) have been translated based upon US Dollar as the functional currency. MAMI's assets and liabilities were translated using the exchange rate at year end and income and expense items were translated at the average exchange rate for the year. The resulting translation adjustment was included in other comprehensive income (loss).

The Company used the exchange rates published by The Korea Financial Telecommunications & Clearings Institute.

The Company's consolidated financial statements include 100% of the assets, liabilities, revenues and expenses of its majority-owned subsidiary over which it has effective control. The ownership interests of the other stockholders are reflected as noncontrolling interests.

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for all periods. Diluted earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding, increased by common stock equivalents. Common stock equivalents are calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company's outstanding stock options. However, potential common shares are not included in the denominator of the diluted earnings (loss) per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

The Company previously applied 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 permitted, the Company had previously elected to adopt provisions of ASC 718, "Compensation - Stock Compensation" , for options granted to non-employees who perform services for the Company and the disclosure-only provisions of options granted to employees.

Pursuant to ASC Topic 718, the company measures the cost of employee services received in exchange for an award of stock-based compensation based on the grant-date fair value of the award. The cost is recognized over the requisite service period, except for awards granted to retirement-eligible employees, which are fully expensed by the grant date. No compensation cost is recognized for awards that are subsequently forfeited. However, the Company did not recognize compensation cost related with stock options as the vesting period was completed up prior to 2004 for all outstanding options.

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 was \ 607.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification ("ASC" ) and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162. This statement modifies the GAAP hierarchy by establishing only two levels of GAAP, authoritative and nonauthoritative accounting literature. Effective July 2009, the FASB ASC, also known collectively as the "Codification," is considered the single source of authoritative U.S. accounting and reporting standards, except for additional authoritative rules and interpretive releases issued by the SEC. Nonauthoritative guidance and literature would include, among other things, FASB Concepts Statements, American Institute of Certified Public Accountants Issue Papers and Technical Practice Aids, and accounting textbooks. The Codification was developed to organize GAAP pronouncements by topic so that users can more easily access authoritative accounting guidance. It is organized by topic, subtopic, section, and paragraph, each of which is identified by a numerical designation. This statement is effective for financial statements for interim and annual reporting periods ending after September 15, 2009. All accounting references have been updated, and therefore SFAS references have been replaced with ASC references.

In December 2007, the FASB issued SFAS No. 141 (revised), Business Combinations, which was primarily codified into the Business Combinations Topic, ASC 805. This guidance changes the accounting for business combinations, including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gain and loss contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition related transaction costs, and the recognition of changes in the acquirer's income tax valuation allowance. This guidance is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of this guidance did not have any impact on the Company's consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51, which was primarily codified into the Consolidations Topic, ASC 810-10-65. This guidance establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This guidance is effective for fiscal years beginning on or after December 15, 2008. The adoption of this guidance did not have any impact on the Company's consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, which was primarily codified into the Subsequent Events Topic, ASC 855. This guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet data but before financial statements are issued. This guidance is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this guidance did not have any impact on the Company's consolidated financial statements.

In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosure, or ASU 2009-12. This standard provides additional guidance on using the net asset value per share, provided by an investee, when estimating the fair value of an alternate investment that does not have a readily determinable fair value and enhances the disclosures concerning these investments. Examples of alternate investments, within the scope of this standard, include investments in hedge funds and private equity, real estate, and venture capital partnerships. This standard is effective for interim and annual periods ending after December 15, 2009. The Company does not expect the adoption of this guidance to have any impact on our consolidated financial statements.

In December 2009, the FASB issued ASU No. 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, or ASU 2009-17. The amendments in this update replace the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. The amendments in this update also require additional disclosures about a reporting entity's involvement in variable interest entities, which will enhance the information provided to users of financial statements. This standard is effective for fiscal years beginning on or after December 15, 2009. The Company does not expect the adoption of this guidance to have any impact on our consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASC Topic 820) — Improving Disclosures About Fair Value Measurements. The amendments in this update require new disclosures about transfers into and out of Levels 1 (fair value determined based on quoted prices in active markets for identical assets and liabilities) and 2 (fair value determined based on significant other observable inputs), and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. Except for the detailed Level 3 roll-forward disclosures, the new standard is effective for interim and annual reporting periods beginning after December 31, 2009. The requirement to provide detailed disclosures about the purchases, sales, issuances, and settlements in the roll-forward activity for Level 3 fair value measurements is effective for interim and annual reporting periods beginning after December 31, 2010. We do not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855) — Amendments to Certain Recognition and Disclosure Requirements, which amends ASC 855, Subsequent Events, so that SEC filers, as defined in the ASU, no longer are required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The Company adopted the amendments effective immediately, and the adoption did not impact the Company’s financial condition and results of operations.

In December 2010, the FASB issued ASU 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations”. This ASU specifies that if a public company presents comparative financial statements, the entity should only disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. ASU 2010-29 is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The Company early adopted this amendments as of January 1, 2010, however, the adoption of ASU 2010-29 did not impact our financial position, results of operations, or cash flows, as its requirements only pertain to financial statement footnote disclosure.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC did not or are not believed by management to have a material impact on our company’s present or future consolidated financial statements.

The Company reports its consolidated financial statements in Korean Won. The United States dollar (“US dollar”) amounts disclosed in the accompanying consolidated financial statements are presented solely for the convenience of the reader, and have been converted at the rate of 1,163.70 Korean Won to one US dollar, which is the noon buying rate of the U.S. Federal Reserve Bank of New York in effect on December 31, 2010. Such translations should not be construed as representations that the Korean Won amounts represent, have been, or could be, converted into, US dollars at that or any other rate. The US dollar amounts are unaudited and are not presented in accordance with generally accepted accounting principles generally accepted either in the Republic of Korea or the United States of America.

		2010			2009
Trade	\	352 727		\	2 750 141
Others		40,028			51,380
		392,755			2,801,521
Allowance for doubtful accounts		(297,840	)		(2,000,898	)
Accounts Receivable, net	\	94 915		\	800 623

	2010		2009
Merchandise	\ 54 352		\ 71 949
Finished goods	33,965		193,680
Work-in-process	91,604		106,098
Raw material	219,420		248,432
	399,341		620,159
Reserves	(264,409	)	(267,454	)
	\ 134 932		\ 352 705

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

		2010			2009
Machinery	\	55 276		\	55 416
Vehicles		-			32,769
Tools		47,900			47,900
Furniture and fixtures		930,281			930,281
		1,033,457			1,066,366
Less accumulated depreciation		(1,016,991	)		(1,006,698	)
Property, plant and equipment, net	\	16 466		\	59 668

Depreciation expenses for the years ended December 31, 2010, 2009 and 2008 were \ 24,912, \ 38,172 and \ 53,325, respectively.

The Company accounts for its ownership interest in Beijing Meridian Medicals Equipment Co., Ltd. ("Beijing Meridian") under the equity method of accounting and adjusts its investment balance for its share of Beijing Meridian income and losses. Beijing Meridian’s primary business is wholesale and retail of medical equipment in China.

On November 10, 2001, the Company acquired 45% ownership of Beijing Meridian for \ 76,956 in cash. The changes of ownership percentage occurred in 2002 and 2003 when Beijing Meridian issued additional capital stocks. The ownership percentage was 25% in 2010 and 2009.

The recognized loss on this investment was \ 393 in 2009. And the carrying amount of the investment was \ 37,382 as of December 31, 2009. In 2010, however the Company recognized \ 37,382 loss on impairment of equity method investments securities considering the factors indicating that a decrease in value of the investment has occurred.

Amortization expenses for the years ended December 31, 2009, 2008 and 2007 were \ 189, \ 189 and \ 189, respectively.

(Note b) The Company had issued two series of non-guaranteed corporate bonds in 2001. As explained in Note 2, the Company entered into debt restructuring plan including debentures. As a result, two series of debentures were reclassified to long-term borrowings and the maturity date was extended to December 31, 2013 with a reduced interest rate of 3.5% per annum. Details of debentures as of December 31, 2010, are as follows:

Restructured

Original

Amount

Interest rate

Maturity

Interest rate

Maturity

1^stdebentures

\1,000,000

3.5%

December 31, 2013

12.15%

January 31, 2003

2^nddebentures

500,000

3.5%

December 31, 2013

13.92%

August 14, 2004

\1 500 000

The repayment schedule for long-term borrowings as of December 31, 2010 is as follows:

Changes in accrued severance benefits for the years ended December 31, 2010 and 2009 are summarized as follows:

		2010			2009
Accrued severance benefits at beginning of year	\	192 214		\	194 114
Provision		33,322			75,584
Payments		(11,553	)		(77,486	)
Transfer to National Pension Fund		(4,063	)		(4,063	)
		209,920			188,149
Less current portion		(42,797	)		(38,442	)
Balance at end of year	\	167 123		\	149 707

The Company leases its manufacturing and office facilities from non-affiliates. Current lease will be expired in October 2011. Thereafter, the management expects to renew its lease agreement on an annual basis. Total rent expense were \ 72,438, \ 135,735 and \ 165,338 for the years ended December 31, 2010, 2009 and 2008, respectively.

Total future minimum lease payment under current operating lease is \ 50,000 for the year ending December, 31.

The Company’s capital stock consists entirely of common stock with a par value of 100 Won and the number of authorized, issued and outstanding shares as of December 31, 2010 and 2009 are as follows:

In April 2007, the Company raised 517,000 Won from twenty non-U.S. investors for total 933,506 common shares at the price of 554 Won per share and warrants to purchase 133,358 common shares at 950 Won per share. As of December 31 2009, due to the end of exercisable period, those warrants are not effective any more.

In June 2007, the Company raised US$350,000 from one non-U.S. investor for 700,000 common shares at the price of US$0.50 per share.

In December 2007, the Company raised 1,779,000 Won from forty nine non-U.S. investors for total 1,976,666 common shares at the price of 900 Won per share.

On September 4, 2008, the Company issued 90,000 shares of common stock (par value 100 Won) in exchange for investor relations and marketing services with the fair value to the Company of \ 51,822. The shares issued were valued at the trading price of the company's common stock as of the date of authorization for the issuance.

However, regardless of registration in Korean Commercial Registration Office, every shareholder’s right and interest is not different.

The Company classifies income (expense) items not generated from the routine business operation as net other of other income (expense). Net other for the years ended December 31, 2010, 2009 and 2008 are \ (128,036), \ (49,878) and \ 161,963, respectively. The main components of net other of other income (expense) from the statements of operations and comprehensive income are as follows. For the year ended 2010, the Company classified \ (54,606) loss on disposal of inventory, \ (37,382) loss on impairment of equity method investment securities and \ (29,617) loss on obsolete inventory, \ (5,494) loss from correction of accounting error as net other. For the year ended 2009, the Company classified \ (74,302) loss from correction of accounting error as net other. For the year ended 2008, the Company classified \ 102,700 refund of service fee as net other.

The Company adopted ASC Subtopic 740-10-Income Taxes-Overall (FASB Interpretation No. 48), “Accounting for Uncertainty in Income Taxes” which prescribes a recognition threshold and measurement process for recording in the financial statements, uncertain tax positions taken or expected to be taken in a tax return. Under ASC Subtopic 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. ). Management believes that there are no significant unrecognized tax expense (benefits) as of December 31, 2010.

The Company recognizes federal and state tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal and state tax liabilities or assets based on its estimate of future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. A valuation allowance is required when it is more likely than not that the Company will not be able to realize all or a portion of our deferred tax assets.

Income tax provision from continuing operations for the years ended December 31, 2010 and 2009 were $0.

The provisions for income taxes reconcile to the amount computed by applying effective federal statutory income tax rate to income before provision for income taxes as follows:

	2010		2009
Foreign tax	(23.98%	)	(15.02%	)
Federal tax at statutory tax rate	(2.27%	)	(13.92%	)
State tax, net of valuation allowance	(0.39%	)	(2.39%
Nondeductible expenses	0.65%		0.25%
Tax Credits	0.00%		0.00%
AMT	0.00%		0.00%
Expired NOL	50.42%		19.64%
Change of Valuation Allowance	(24.43%	)	11.44%
Income Tax Provision	0.00%		0.00%

Deferred income taxes reflect the net 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 deferred tax assets at December 31 consisted of the following:

		2010			2009
Current Deferred Tax Asset (Liabilities)
Foreign currency translation	\	(56,404	)	\	(69,784	)
Allowance for accounts receivable		208,145			152,238

Non-current Deferred Tax Asset (Liabilities)
Net Operating Losses		2,398,406			3,092,000
Investment		134,624			134,624

Intangible asset		(100,634	)		(107,986	)
Severance		45,295			42,253

Total Deferred Tax Asset		2,629,433			3,243,345
Less Valuation allowance		(2,629,433	)		(3,243,345	)
Net, deferred tax asset	\	-		\	-

The significant component of the deferred tax asset (liability) at December 31, 2010 and 2009 resulted from net operating loss carry-forwards in the amount of approximately 10.5 billion Won and 11.2 billion Won, respectively.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon factors such as the scheduled reversal of temporary differences and projected future taxable income, management considers the scheduled reversal of deferred income tax assets and liabilities, the projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical and projected taxable income, management believes it is more likely than not that the deferred tax assets will be realized. The valuation allowance increased by 613.9 million Won for the year ended December 31, 2010.

Income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the year. Diluted income (loss) per share is computed in a manner consistent with that of basic loss per share while giving effect to all potentially dilutive common shares that were outstanding during the period.

Income (loss) per share for the years ended December 31, 2010, 2009 and 2008 is calculated as follows (in thousands of Korean won, except for per share amount and number of shares):

The Company has potentially dilutive common shares as of December 31, 2007, 2005 and 2004, however there were no dilutive effects as of December 31, 2010, 2009 and 2008. Therefore, income (loss) per share is same as the diluted income (loss) per share.

Significant account balance with related company as of December 31 are summarized as follows:

In 2010, the Company recognized \ 602,872 bad debt expenses and wrote off all remaining balance of \ 1,686,454 in regard to account receivables of Meridian Medical, Inc (‘MMI”). The allowances for doubtful accounts were \ 0 and \ 135,735 for the years ended December 31, 2010 and 2009, respectively.

Significant transactions with related company for the years ended December 31, 2010, 2009 and 2008 are summarized as follows:

In June 2004, the Company entered into an exclusive distribution agreement with MMI. Under the agreement, MMI was entitled to an exclusive distribution right in North American Market.

On January 1 2010, the Company entered into service agreement with MMI. Based on that agreement, MMI carries out sales, marketing and admin support service on behalf of the Company in US market. However, that service agreement was terminated on June 30, 2010.

In 2010, the Company operated in one industry segment, the development and manufacturing of alternative medical equipments. 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, for the years ended December 31:

		2010		2009		2008
Export
North America	\	855,509	\	693,543	\	1,143,757
Asia		49,220		111,835		544,461
Europe		327,126		186,687		1,444,010
Other		44,993		107,966		15,615
		1,276,848		1,100,031		3,147,843

Domestic Sales		61,842		273,348		177,080
	\	1,338 690	\	1,373 379	\	3,324 923

The Company is not aware of any pending or threatened litigation, claims, or assessments or unasserted claims or assessments that are required to be accrued or disclosed in the financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification 450, Contingencies, and we have not consulted a lawyer concerning litigation, claims, or assessments.

The Company has evaluated all subsequent events to the consolidated balance sheet date of December 31, 2010 through the date that the financial statements were issued on August 12, 2011, and the subsequent events that require disclosure under FASB Accounting Standards Codification Topic 855, Subsequent Events is as follows:

In January 2011, the Company raised US$150,000 from one US investor for total 1,500,000 common shares at the price of US$0.10 per share.

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/In Beom Park
Name: In Beom Park
Title: President, CEO, Director
Date: August 19, 2011

U.S. GAAP [X]	International Financial Reporting Standards as issued	Other [ ]
	by the International Accounting Standards Board [ ]

		2010⁽¹⁾(in US$)
		(unaudited)			2010			2009			2008			2007			2006


Sales	$	1,184,053		\	1,338,690		\	1,373,379		\	3,324,923		\	2,604,541		\	1,526,828
Cost of sales		621,662			702,851			441,416			944,250			819,418			591,819
Gross profits		562,391			635,839			931,963			2,380,673			1,785,123			935,009
Operating expenses		1,428,707			1,615,296			2,985,018			2,608,778			2,347,469			1,186,416
Loss from operations		(866,316	)		(979,457	)		(2,053,055	)		(228,105	)		(562,346	)		(251,407	)
Other income(expenses)		(383,784	)		(433,901	)		(444,353	)		401,089			(45,317	)		(83,600	)

Income(Loss) before income taxes	$	(1,250,100	)	\	(1,413,358	)	\	(2,497,408	)	\	172,984		\	(607,663	)	\	(335,007	)
Income taxes		-			-			-			-			-			-
Net income(loss)		(1,250,100	)		(1,413,358	)		(2,497,408	)		172,984			(607,663	)		(324,747	)

Net income(loss) per common share Basic and diluted	$	(0.036	)	\	(40	)	\	(71	)	\	5		\	(19	)	\	(10	)
Weighted average number of common shares		35,094,156			35,094,156			35,094,156			35,033,418			32,553,528			31,393,984

		2010⁽¹⁾(in US$)
		(unaudited)			2010			2009			2008			2007			2006


Cash and cash equivalents	$	6,565		\	7,423		\	5,630		\	2,927		\	103,865		\	2,387
Accounts receivable		114,907			129,915			835,623			2,319,328			1,195,182			453,747
Inventories		119,345			134,932			352,705			491,769			549,798			371,209
Other current assets		40,994			46,348			6,843			46,124			23,893			21,337

Total current assets		281,811			318,618			1,200,801			2,860,148			1,872,738			848,680
Property, plant and equipment, net		14,563			16,466			59,668			83,304			50,565			16,546
Investments and other assets		3,887			4,396			43,614			150,564			132,090			104,792

TOTAL ASSETS	$	300,261		\	339,480		\	1,304,083		\	3,094,016		\	2,055,393		\	970,018

Trade accounts payable and current debt	$	7,553,788		\	8,540,312		\	7,450,947		\	5,902,010		\	4,457,132		\	5,085,477
Long-term borrowings		1,296,024			1,465,286			2,142,966			3,072,011			3,683,599			3,984,116
Shareholders’ deficiency		(8,549,551	)		(9,666,118	)		(8,289,830	)		(5,880,005	)		(6,085,338	)		(8,099,575	)

TOTAL LIABILITIES AND DEFICIENCY	$	300,261		\	339,480		\	1,304,083		\	3,094,016		\	2,055,393		\	970,018

-	rapidly changing technologies;
-	evolving and competing industry standards
-	changing customer needs; and
-	frequent new product introductions and enhancements.

-	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

-	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, restructuring or cancellation of customer orders.

-	Exchange rate fluctuations;
-	Interest rate fluctuations;
-	Reduced credit from foreign banks;
-	Volatile stock prices; and

-	Useful device in detecting early signs of cardiovascular dysfunction.
-	Loss of arterial compliance, can be detected in early stages.
-	Uses pulse wave analysis.
-	Completely non-invasive
-	Diagnosis can be done in a little as one minute.
-	Results are immediate and can be saved to a patient database

(Korean Won (\) in thousands)
	For the year ended Dec. 31, 2010		For the year ended Dec. 31, 2009		For the year ended Dec. 31, 2008
Product	Revenues	Revenues % to total	Revenues	Revenues % to total	Revenues	Revenues % to total

Lapex BCS	934,675	69.8%	909,583	66.2%	2,859,231	86.0%
DPA	165,229	12.4%	167,071	12.2%	258,982	7.8%
Others	238,786	17.8%	296,725	21.6%	206,710	6.2%
Total	1,338,690	100.0%	1,373,379	100.0%	3,324,923	100.0%

Income (loss) before income taxes	(105.6	)	(181.8	)	5.2
Income taxes	-		-		-
Net income (loss)	(105.6	)	(181.8	)	5.2

	-	In 2010, due to the aggressive marketing and sales channel development for the North American market and European market, the Company’s sales volume increased by 23%, 75%, respectively (855,509 thousand Won, 327,126 thousand Won in 2010) compared to for the year ended 2009. In North America market, the sales in Canada decreased, but strong sales in U.S. market increased the total sales in North America market. In European market, the successful launching of the LAPEX BCS Pro in France led the increase of sales.

	-	However, the Company couldn’t attain the good performance in Asia (including Korea), the Middle East, and Africa. In those markets, the sales volume decreased from 493,150 thousand Won for the year ended 2009 to 156,055 thousand Won for the year ended 2010. As results, the total sales volume decreased slightly.

	-	On the other hand, unit sales quantity of the Company was increased by 43% compared to 2009, but the selling price that is declined by 30% affected the Company’s sales revenue.

	For the Years Ended December 31,
	2010⁽¹⁾		2010		2009		2008
	(Korean Won (\) in thousands, and US$)

Net cash provided by (used in) operating activities	US$ 89,181		\ 100,829		\ (17,698	)	\ (282,775	)
Net cash provided by (used in) investing activities	10,670		12,064		(35,000	)	(68,484	)
Net cash provided by (used in) financing activities	(98,265	)	(111,100	)	55,401		250,321
Net increase(decrease) in cash	1,586		1,793		2,703		(100,938	)
Cash at beginning of year	4,979		5,630		2,927		103,865
Cash at end of year	6,565		7,423		5,630		2,927

REGION	REGULATION	PRODUCTS APPROVED

Korea	KFDA	Meridian-II, ABR-2000, Lapex–BCS (LipoLaser), LAPEX BCS Pro (LAPEX 2000P), DPA (Digital Pulse Analyzer)
China	SDA	Meridian-II, Lapex-2000
Taiwan	Taiwan Department of Health	LAPEX 2000
U.S.A.	FDA	Meridian-II, Meridian Portable, Lapex-2000, ABR-2000, DPA(Digital Pulse Analyzer), LAPEX BCS, Lucia (LAPEX BCS Pro)
Canada	Health Canada	DPA (Digital Pulse Analyzer), Lapex-2000 LipoLaser
South America	FIP	Meridian-II, Lapex-2000
South Africa	South African Department of Health	LAPEX BCS and BCS Pro
EU	CE EMC, CE LVD CE MDD	Lapex-BCS, Lapex BCS Pro : CE LVD, CE EMC DPA, LAPEX BCS and Pro: CE MDD (CE0123)
International	ISO13485:2003 ISO13485:CMDCAS	Quality Assurance System for DPA and Laser Therapy Device

-	persons entitled to receive stock options has been expanded to include researchers, faculty members of a university, practicing 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; and.

-	stock option holders shall be entitled to exercise their stock options only after having served in the Company for two (2) years.

				Korean Commercial
		SEC		Registration Office
Number of outstanding shares		35,094,156		19,421,182
Capital Stock	\	3,509,415	\	1,942,118

	2010	2011	2012	2013	2014	2015	CAGR(’10 ~ ’15, %)
Market size	245,633	256,253	270,349	284,126	298,079	310,835	4.0

-	dealers in securities or currencies;
-	financial institutions;
-	tax-exempt entities;
-	banks;

Monthly Highs and Lows

2011
June	0.04	0.01
May	0.05	0.02
April	0.05	0.04
March	0.08	0.04
February	0.08	0.03
January	0.08	0.03

-	life insurance companies;
-	traders in securities that elect to mark-to-market their securities;
-	persons that hold common shares as a part of a straddle or a hedging, or conversion transaction;
-	persons liable for the alternative minimum tax;
-	persons that actually or constructively owns 10% or more of our voting stock; or
-	persons whose "functional currency" is not the U.S. dollar. This discussion is based on the Internal Revenue Code of 1986, as amended, its legislative history, final, temporary, and proposed Treasury regulations, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. You are a "U.S. Holder" if you are:
-	a citizen or resident of the United States;
-	a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof;
-	an estate the income of which is subject to United States federal income taxation regardless of its source;
-	a trust:
-	if a United States court can exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust; or
-	that has elected to be treated as a United States person under applicable Treasury regulations. This discussion addresses only United States federal income taxation.

	Independent Auditors' Report

	Consolidated Balance Sheets

	Consolidated Statements of Income

	Consolidated Statements of Changes in Shareholders' Deficiency

	Consolidated Statements of Cash Flows

	Notes to Consolidated Financial Statements

		2010(in US$)
		(Note 4)
ASSETS		(unaudited)	2010	2009

Current assets :
Cash and cash equivalents (Note 3)	$	6,565	\ 7,423	\ 5,630
Trade accounts receivable - less allowance for doubtful accounts of 297,840 (USD 263,435) in 2010 and 1,997,878 in 2009 (Notes 3 and 5)		48,546	54,887	752,263
Short-term loans - less allowance for doubtful accounts of 37,791 (USD 33,426) in 2010 and 218,485 in 2009		30,957	35,000	35,000
Other accounts receivable - less allowance for doubtful accounts of nil in 2010 and 3,020 in 2009		35,404	40,028	48,360
Inventories, net (Note 6)		119,345	134,932	352,705
Other current assets		40,994	46,348	6,843

Total current assets		281,811	318,618	1,200,801


Property, plant and equipment, net (Notes 3 and 7)		14,563	16,466	59,668

Investments and other assets :
Investments (Note 8)		-	-	37,382
Security deposits		3,721	4,208	5,856
Patents and trademarks, net of amortization (Notes 3 and 9)		166	188	376

Total investments and other assets		3,887	4,396	43,614

TOTAL ASSETS	$	300,261	\ 339,480	\ 1,304,083

		2010(in US$)
		(Note 4)
LIABILITIES AND DEFICIENCY		(unaudited)			2010			2009

Current liabilities
Accounts payable	$	2,075,402		\	2,346,450		\	2,161,121
Current portion of long-term accounts payable (Note 2)		763,401			863,102			882,656
Short-term borrowings (Note 10)		602,777			681,500			684,500
Current portion of long-term borrowings (Note 11)		2,957,706			3,343,983			2,741,169
Accrued expenses		813,553			919,804			767,031
Advanced received		268,516			303,585			141,256
Deferred warranty revenue		28,277			31,971			25,573
Other current liabilities		44,156			49,917			47,641

Total current liabilities		7,553,788			8,540,312			7,450,947

Long-term accounts payable (Note 2)		-			-			3,736
Long-term borrowings (Note 11)		1,148,207			1,298,163			1,989,523
Accrued severence benefits (Note 12)		147,817			167,123			149,707

Total liabilities		8,849,812			10,005,598			9,593,913

Commitments and contingencies (Note 13)		-			-			-

Deficiency (Note 14)
Meridian Co. shareholders' deficiency
Common stock - par value 100 WON per share; 100 million shares authorized issued and outstanding 35,094 thousand shares at December 31, 2010 and December 31, 2009		3,104,028			3,509,415			3,509,415
Additional paid-in capital		5,512,564			6,232,505			6,232,505
Accumulated deficit		(16,912,461	)		(19,121,226	)		(17,878,998	)
Accumulated other comprehensive income (loss)		79,624			90,024			61,940

Total Meridian Co. shareholders' deficiency		(8,216,245	)		(9,289,282	)		(8,075,138	)

Non-controlling interest		(333,306	)		(376,836	)		(214,692	)

Total deficiency		(8,549,551	)		(9,666,118	)		(8,289,830	)

TOTAL LIABILITIES AND DEFICIENCY	$	300,261		\	339,480		\	1,304,083

										Accumulated			Deficiency
	Common Stock Issued				Additional					Other			Attributable to
					Paid-in		Accumulated			Comprehensive			Non-Controlling
	Shares		Amount		Capital		Deficit			Income (Loss)			Interest			Total

Balance at January 1, 2008	35,004,156		\ 3,500,415		\ 6,189,683		\ (15,790,498	)		\ 15,062			\ -			\ (6,085,338	)


Issuance of common shares	90,000		9,000		42,822		-			-						51,822
Net income (loss)	-		-		-		172,984			-						172,984
Other comprehensive loss:
Foreign translation loss	-		-		-		-			(19,473	)					(19,473	)
Balance at December 31, 2008	35,094,156		\ 3,509,415		\ 6,232,505		\ (15,617,514	)		\ (4,411	)		\ -			\ (5,880,005	)


Net income (loss)							(2,261,484	)					(235,924	)		(2,497,408	)
Other comprehensive loss:
Foreign translation loss	-		-		-		-			66,351			21,232			87,583
Balance at December 31, 2009	35,094,156		\ 3,509,415		\ 6,232,505		\ (17,878,998	)		\ 61,940			\ (214,692	)		\ (8,289,830	)


Net income (loss)							(1,242,228	)					(171,130	)		(1,413,358	)
Other comprehensive loss:
Foreign translation loss	-		-		-		-			28,084			8,986			37,070
Balance at December 31, 2010	35,094,156		\ 3,509,415		\ 6,232,505		\ (19,121,226	)		\ 90,024			\ (376,836	)		\ (9,666,118	)



Balance at December 31, 2009 (in US$) (Note 4)	35,094,156	$	3,104,028	$	5,512,564	$	(15,813,723	)	$	54,781			(189,891	)	$	(7,332,241	)

Net income (loss)							(1,098,738	)					(151,362	)		(1,250,100	)
Other comprehensive loss:
Foreign translation loss	-									24,843			7,947			32,790
Balance at December 31, 2010	35,094,156	$	3,104,028	$	5,512,564	$	(16,912,461	)	$	79,624		$	(333,306	)	$	(8,549,551	)

		2010 (in US$)
		(Note 4)
		(unaudited)			2010			2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES :
Net income (loss)	$	(1,250,100	)	\	(1,413,358	)	\	(2,497,408	)	\	172,984
Adjustments to reconcile net income (loss) from operations to net cash used in operating activities
Depreciation		22,034			24,912			38,172			53,325
Provision for severance benefits		29,472			33,322			75,583			74,580
Bad debt expenses, net (recovery income)		528,601			597,637			1,211,828			378,653
Amortization of intangible assets		167			189			189			189
Loss on disposal of property, plant and equipment		5,382			6,085			-			-
Equity in loss(gain) of investee		-			-			393			712
Loss on impairment of equity method investment securities		33,063			37,382			-			-
Loss on disposal of inventory		48,298			54,606			-			2,190
Loss on obsolete inventory		26,195			29,617			-			-
Loss from correction of accounting error		4,859			5,494			-			-
Gain on forgiveness of debt		-			-			-			(9,820	)
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		88,215			99,737			397,375			(1,193,225	)
Decrease (increase) in inventory		120,815			136,594			122,987			71,251
Decrease (increase) in other current assets		(27,572	)		(31,174	)		39,281			(22,230	)
Decrease (increase) in security deposits		-			-			7,088			-
Increase (decrease) in accounts payable - trade		(23,817	)		(26,928	)		(82,593	)		(192,695	)
Increase (decrease) in accounts payable - other		172,660			195,210			709,664			292,558
Increase (decrease) in other current liabilities		282,526			319,424			82,522			86,913
Severance payments		-			-			(77,485	)		(16,003	)
Other		28,383			32,080			(45,294	)		17,843
Sub-total		1,339,281			1,514,187			2,479,710			(455,759	)

Net cash provided by (used in) operating activities		89,181			100,829			(17,698	)		(282,775	)

CASH FLOWS FROM INVESTING ACTIVITIES :
Decrease in short-term loans		-			-			-			10,000
Proceeds from sales of property, plant and equipment		10,670			12,064			-			-
Increase in short-term loans		-			-			(35,000	)		-
Acquisition of property, plant and equipment		-			-			-			(78,484	)

Net cash provided by (used in) investing activities		10,670			12,064			(35,000	)		(68,484	)

CASH FLOWS FROM FINANCING ACTIVITIES :
Proceeds from issuance of common stocks		-			-			-			-
Proceeds from short-term borrowings		-			-			29,500			585,000
Proceeds from long-term borrowings		-			-			34,512			-
Payment of long-term accounts payable		-			-			(8,611	)		-
Repayment of short-term borrowings		(2,653	)		(3,000	)		-			(124,609	)
Repayment of long-term borrowings		(95,612	)		(108,100	)		-			(210,070	)

Net cash (used in) provided by financing activities		(98,265	)		(111,100	)		55,401			250,321

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,586			1,793			2,703			(100,938	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		4,979			5,630			2,927			103,865

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	6,565		\	7,423		\	5,630		\	2,927


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	66,041		\	76,852		\	81,300		\	64,221
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
Accrued severance benefits transferred to other current liability	$	9,927		\	11,553		\	19,031		\	5,858
Stock issued in lieu of service fees	$	-		\	-		\	-		\	51,822

		2010			2009
Acquisition cost	\	5 466		\	5 466
Less accumulated amortization		(5,277	)		(5,090	)
Intangible assets, net	\	189		\	376

	Annual
Creditor	interest rate		2010		2009

Other (third party individuals)	8 ~ 9 %	\	681,500	\	684,500

	2010	2009
Authorized shares	100,000,000	100,000,000
Issued and outstanding shares	35,094,156	35,094,156

Related party	Nature of Relationship	Account balance		2010		2009
Meridian Medical, Inc.	MAMI’s minority shareholder	Account Receivables		-		1,794,473
Park hee yo	MAMI’s shareholders	Long-term borrowings		-		41,512
			\	-	\	1,835,985

Related party	Transactions		2010		2009		2008
Meridian Medical, Inc.	Sales		746,812		652,436		970,343
	Service fees		117,872		313,234		297,112
		\	864 684	\	965 670	\	1,267 455

Exhibit
12.1	Section 302 Certification of the CEO
12.2	Section 302 Certification
13.1	Section 906 Certification of the CEO
13.2	Section 906 Certification