UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period From ___________ to ____________
COMMISSION FILE NUMBER: 0-30018
MERIDIAN HOLDINGS,INC.
----------------------
(Exact Name of Registrant as Specified in its Charter)
COLORADO 52-2133742
------------------------------- ------------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
900 WILSHIRE BOULEVARD, SUITE 500, LOS ANGELES, CALIFORNIA 90017
----------------------------------------------------------------
(Address of Principal Executive Offices)
(213) 627-8878
----------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
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 and, (2) has been subject to such filing
requirements for the past 90 days. Yes ( X ) No ( )
As of November 11, 1999, Meridian Holdings, Inc., Registrant had 31,157,500
shares of its $0.001 par value common stock outstanding. Based upon the closing
price at such date, aggregate market value was $47,047,825.
Page 1 of 12 sequentially numbered pages
Form 10-Q
First Quarter 2000
<PAGE>
<TABLE>
<CAPTION>
MERIDIAN HOLDINGS, INC.
INDEX
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Balance Sheets - March 31, 2000 3
Statements of Operations for the Three Months
Ended March 31, 2000 4
Statement of Cash Flows for the Three Months
Ended March 31, 2000 5
Notes to Financial Statements 6-7
Company Overview 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II OTHER INFORMATION
Additional Information 11
Signature 11
</TABLE>
<PAGE>
MERIDIAN HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Balance Sheet As At March 31
2000 1999
====== ======
<S> <C> <C>
ASSETS
Current assets
Cash $ 54,540 $ 4,287
Accounts Receivable (Note 5 ) 209,735 250
Inventories 5,989 -
--------- ------
Total Current Assets.. . . . . . . . . . . . . . . . 270,264 4,537
========= ======
Property, Plant, and Equipment
Net Accumulated Depreciation (Note 6). . . . . . 25,787 825
Other Assets
Prepaid Expenses 4,541 -
Organizational Cost - 16,613
Investments (Note 3). . . . . . . . . . . . . . 3,880,000 -
---------- -------
Total Other Assets . . . . . . . . . . . 3,884,541 16,613
---------- -------
Total Assets 4,180,592 17,525
========== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities . . . . . . . . . . . . . . 88,310 2,000
------- ------
Total Current Liabilities . . . . . . . 88,310 2,000
------- ------
Long term liabilities. . . . . . . . . . .. . . . . 186,074 0
-------- ------
Total Liabilities . . . . . . . . . . . 274,384 2,000
======== ======
Liabilities and Stockholders' Equity
Stockholders' Equity
Common stock (50,000,000 shares authorized
par value 0.001 ; 31,157,500 shares issued and
Outstanding) (Note 2) . . . . . . . . . . . . . 31,158 650
Additional paid-in capital. . . . . . . . . . . 3,856,315 2,875
Common Stock Subscribed . . . . . . . . . . . . 16,450
Retained Earnings . . . . . . . . . . . . . . . . . 18,735 -
---------- -------
Total Stockholders' Equity . . . . . . . 3,906,208 19,975
---------- -------
Total Liabilities & Equity. . . . . . . . . . . . . $ 4,180,592 21,975
========= =======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
MERIDIAN HOLDINGS, INC.
Consolidated Statement - Unaudited
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 2000 THROUGH MARCH 31, 2000
<TABLE>
<CAPTION>
For the Three Months ended March 31,
2000 1999
====== =====
<S> <C> <C>
Revenues . . . . . . . . $ 337,185 $
Less: Cost of Revenues . (201,437)
--------- -------
Gross Margin . 135,748
Operating Expense. . . . 202,651
Other Income and Expense ( 5,631) (6,089)
-------- --------
Net Income . . $ (72,533) (6,089)
========= ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
MERIDIAN HOLDINGS, INC.
STATEMENT OF CASH FLOW
UNAUDITED
FOR THE PERIOD FROM JANUARY 1, 2000 THROUGH MARCH 31, 2000
<TABLE>
<CAPTION>
For the Three Months ended March 31,
<BTB> 2000 1999
==== ====
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss). . . . . . . . . . . . . . . $ (72,533) $ -
Adjustments to reconcile net loss to net cash
used in operating activities:
(Increase) Decrease in
Accounts receivables . . . . . . . . . . . . . (209,485) -
Inventories. . . . . . . . . . . . . . . . . . (5,989) -
Prepaid Expenses . . . . . . . . . . . . . . . (4,541) -
Increase(Decrease) in
Accounts Payables. . . . . . . . . . . . . . . 86,310 -
-------- -------
NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . (206,238) 0
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of Fixed Assets. . . . . . . . . . (24,962) -
Increase in Pre-Opening Costs. . . . . . . . . 6,339
Organization Costs . . . . . . . . . . . . . . 16,613 -
--------- -------
NET CASH USED IN INVESTING ACTIVITES . . . . . . . . ( 8,349) 6,339
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from sale of stock . . . . . . . . . . - 4,450
Repayment of debt . . . . . . . . . . . . . . . (12,502) -
Proceeds from long term debt. . . . . . . . . . 186,074 -
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . 173,572 4,450
Increase (Decrease) in cash . . . . . . . . . . ( 41,015) ( 1,889)
CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 4,286 6,176
----------- ----------
CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ (36,729) $ 4,287
=========== ==========
<FN>
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES
Fair value of common stock to acquire investee $3,880,000
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
Meridian Holdings, Inc.
Notes to Financial Statements
March 31, 2000
NOTE 1 - Summary of Significant Accounting Policies
This summary of significant accounting policies of Meridian Holdings, Inc. (the
"Company") is presented to assist in understanding the Company's financial
statements. These financial statements and notes are the representation of the
Company's management, which is responsible for the integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
Nature of Operations
Meridian Holdings, Inc. (NASDAQ: Bulletin Board - MEHO) was incorporated under
the laws of the State of Colorado on October 13, 1998. The Company is an
Internet based company with special emphasis on e-commerce. The Company's
activities have been limited to capital formation and the development of a
business plan. The Company became fully reporting under Securities & Exchange
Commission guidelines on March 31, 1999. Meridian Holdings, Inc., acquired the
Capnet Group of Companies on May 25, 1999. Meridian Holdings, Inc., is a
technology and Internet-centric holding company which identifies, acquires,
operates and manages business-to-business companies . Meridian Holdings, Inc.,
currently focuses on companies engaged in e-commerce, e-communication, and
e-business services. The Company generally acquires ownership interests in
companies that allow it to have a significant influence over their direction and
management over the long-term. Meridian Holdings, Inc., assigns a dedicated team
to each partner company and actively assists its partner companies in their
management, operations and finances. The Company seeks to maximize shareholder
value by actively providing operational assistance and expertise to help its
partner companies grow and develop and by giving its shareholders the
opportunity to participate in the initial public offerings of its partner
companies while retaining a significant ownership interest after the initial
public offering. Its network of partner companies creates an environment through
which companies can leverage one another's information technology, operational
experience, business contacts and industry expertise.
Use of Estimates
Management will use estimates and assumptions in preparing financial statements
(e.g. depreciation). Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and reported revenues and expenses.
Fiscal Year
The Company operates on a December 31st year end.
Income Recognition
The Company prepares its financial statements and federal income taxes on the
accrual basis of accounting. The nature of the business is such that the Company
receives stock and other necessary materials from the customers for processing.
As such no inventories of any significance are maintained.
NOTE 2 - Capitalization
The Company is authorized to issue 10,000,000 shares of Preferred Stock, per
value $.001, and 50,000,000 shares of Common Stock, par value $.001.
The Common Shares each have voting rights, with par value $0.001 per share and
no preference rights. As of March 31, 2000, there were 31,157,500 Common
Shares of the Company issued and outstanding. There were no Preferred Shares
issued or outstanding.
NOTE 3 - Business Combinations
On January 31, 2000, the Company acquired a 51% ownership interest in
Meridian Health Systems, Inc. (Inglewood), a Delaware corporation. As provided
by the stock purchase agreement, Meridian Health Systems, Inc. became a
subsidiary of Meridian Holdings, Inc. and the core managed health care unit of
the Meridian group of companies. Under the terms of this agreement, Meridian
Holdings, Inc., will receive 2,100,000 shares of Common Stock (0.0001 par
value) of Meridian Health Systems, Inc. in exchange for the following:
(i) Provision of future corporate financing to the company and other
necessary support in regards to the company's business development
(iii) Assume the following debts of the Seller :
a). Debt owed to Los Angeles Community Development Bank in. the
amount of $59,572.28.
b). Debt owed to First Professional Bank, in the amount of $11,507.11
Since Meridian Holdings, Inc., as a result of its acquisition of Capnet Group of
Companies in 1999, was named as a co-signer to these loans, therefore these
amounts has always been included in Meridian Holdings, Inc., financial
statements as a long term liability.
<PAGE>
NOTE 4 - Loan Payable to Union Bank
On March 31st, 2000, the company established a revolving business line of credit
with Union Bank of California, in the amount of $50,000. The said loan has a
variable annual percentage rate, which as of this report is 11.50%.
NOTE 5 - Accounts Receivable
As at March 31, 2000, accounts receivable represented (1) the residual amount
of fees earned and reasonably expected to be collected. An allowance for
doubtful account of $77,194 has been established.
NOTE 6 - Property Plant & Equipment
Property and equipment are stated at cost. Acquisitions having a useful life in
excess of one (1) year are capitalized. Repairs and maintenance are expensed
in the year incurred. Capital assets are depreciated by the straight-line
method over estimated useful lives of the related assets, normally five (5)
to seven (7) years. Property and equipment consists of the following as of
March 31, 2000 is summarized as follows:
<TABLE>
<CAPTION>
2000
=====
<S> <C>
Computer Equipment . . . . . . $ 56,628
Leasehold Improvements . . . . 6,500
Office Furniture & Fixtures. . 36,603
Office Equipment . . . . . . . 7,169
Software . . . . . . . . . . . 11,385
Medical Equipment. . . . . . . 5,391
Less: Accumulated Depreciation 97,889
-------
$ 25,787
=======
</TABLE>
NOTE 7 - INCOME TAXES
Operating Loss and Tax Credit Carryforwards
The Company, as of December 31, 1999, has loss carryforwards totaling $906,336
that may be offset against future taxable income. If not used, the
carryforwards will expire as follows:
<TABLE>
<CAPTION>
<S> <C>
Year 2011 $329,768
Year 2012 576,568
--------
Total $906,336
========
</TABLE>
As a result of the above carryforwards, there is no provision for income tax for
the year ended December 31, 1999.
NOTE 8 - EARNINGS PER SHARE
The Company has calculated the income per common share based upon 31,157,500
shares issued and outstanding. The net income per share was $0.0.
<PAGE>
MERIDIAN HOLDINGS, INC.
THE COMPANY
Meridian Holdings, Inc. (NASDAQ: Bulletin Board - MEHO) was incorporated under
the laws of the State of Colorado on October 13, 1998. The Company is an
acquisition-oriented holding company focused on building, operating and managing
a portfolio of business-to-business companies. Meridian seeks to acquire
majority or controlling interests in companies engaged in e-commerce,
e-communication, and e-business services, which will allow the holding company
to actively participate in management, operations and finances. Meridian's
network of affiliated companies is designed to encourage maximum leverage of
information technology, operational excellence, industry expertise and
synergistic business opportunity. Meridian is committed to building shareholder
value by positioning affiliated companies as independent business entities in
which Meridian shareholders enjoy equity participation.
RISKS ASSOCIATED WITH MANAGING GROWTH
The Company's anticipated level of growth, should it occur, will challenge the
Company's management and its sales and marketing, customer support, research and
development and finance and administrative operations. The Company's future
performance will depend in part on its ability to manage any such growth, should
it occur, and to adapt its operational and financial control systems, if
necessary, to respond to changes resulting from any such growth. There can be no
assurance that the Company will be able to successfully manage any future growth
or to adapt its systems to manage such growth, if any, and its failure to do so
would have a material adverse effect on the Company's business, financial
condition and results of operations.
LACK OF A PRESENT MARKET FOR SECURITIES
The Common Stock is currently quoted on the Bulletin Board, maintained by the
National Association of Security Dealers, Inc. ("NASDAQ") under the Symbol:
MEHO, and there is presently only a very limited market for the Common Stock.
Historically the spread between the bid and asked price of the Company's Common
Stock has been large reflecting limited trading in the stock. The trading price
for the Common Stock has fluctuated widely in the recent past. See "Common Stock
Price Range."
MARKET FOR COMMON STOCK
The Common Stock is traded on the Bulletin Board maintained by the National
Association of Securities dealers, Inc. under the symbol "MEHO." The Price
Range of the Company's Common Stock has varied significantly in the past months
ranging from a high bid of $3.00 and a low bid of $1 per share. The above
prices represent inter-dealer quotations without retail mark-up, mark-down or
commission, and may not necessarily represent actual transactions.
SELECTED FINANCIAL DATA
The Company had net working capital of $337,185 as at March 31, 2000 compared
to $416,385 during the fourth quarter ended December 31, 1999. This represents
a decrease in working capital of 19.3%. This decrease in working capital is
attributed to decrease in enrolment of membership into Capnet IPA Network;
termination of benefits to assigned members, as well as termination of
unprofitable contracts with one of the contracted health plans.
The selected financial data set forth above should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements notes thereto.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS:
The following section contains forward-looking statements that involve risks and
uncertainties, including those referring to the period of time the Company's
existing capital resources will meet the Company's future capital needs, the
Company's future operating results, the market acceptance of the services of the
<PAGE>
Company, the Company's efforts to establish and the development of new services,
and the Company's planned investment in the marketing of its current services
and research and development with regard to future endeavors. The Company's
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including: domestic
and global economic patterns and trends.
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY.
On June 29, 1999, Dr. Anthony C. Dike joined the Company as Chairman and
Chief Executive Officer. Under his employment agreement, the Company was to pay
Dr. Dike a base salary of $12,000 per month. As of January 1, 2000 and up to
March 31, 2000, the Company has not paid Dr. Dike any portion of his base
salary that was calculated to $36,000. Dr. Dike has agreed to apply the entire
amount owed to him by the company towards purchase of more shares of common
<PAGE>
stock of the company as per the 1999 qualified stock option plan.
Long-term cash requirements, other than normal operating expenses, are
anticipated for the continued development of the Company's business plans. The
Company will need to raise additional funds from investors in order to complete
these business plans. There is no assurance that such funds will be available,
and even when available, the terms may be very prohibitive.
RESULTS OF OPERATIONS
The Company generated revenues from operations of $337,185 during the first
quarter ended March 31, 2000, compared to the revenues from operations of
$416,385 during fourth quarter ended December 31, 1999. This represents a
decrease in revenues of 19.3%. This decrease in revenue is attributed to
decrease in enrolment of membership into Capnet IPA Network, termination of
benefits to assigned members, as well as termination of unprofitable contracts
with one of the contracted health plans. The Company recorded a net loss from
operations of $(72,533) during the three-month period ended March 31, 2000.
Apart from pre-opening expenditures of $6,089, there were no revenues and
expenses recorded during the period ended March 31, 1999.
The increase in net loss is attributed to the hiring of additional
support-staff, acquisition of additional office equipment, marketing and
outside consultants fees.
Management anticipates that general operating expenses will increase, as it
pursues, vigorously, its acquisition of new business opportunities and the
integration of the existing ones.
PLAN OF OPERATIONS
On January 7, 2000, the Company held its first annual shareholder meeting at the
Ramada Inn, in Culver City, California. The new board of directors for the year
2000, was elected, with the addition of four new members to the board of
directors. Also, during this meeting, the shareholders approved the company's
1999 stock option plan.
On January 13, 2000, the company also announced that distribution of a dividend
in the form of common stock (five shares of InterCare.com, Inc., for each share
of free-trading stock of Meridian Holdings, Inc. owned) will take place on
January 15, 2000 to shareholders of record as of December 30, 1999. Corporate
Stock Transfer (Denver), the company's stock transfer agent, processed the
dividend issuance.
On January 18, 2000, the company announced the appointment of Mr. Philip Falese
as the Chief Financial Officer. Mr. Falese has over 18 years of professional
accounting and legal experience, including three years with the law firm of
Foster & Ripley (Los Angeles). As a Program Auditor for the Los Angeles County
Department of Health Services, he created and developed audit programs and
conducted on-site reviews of fiscal viability of nearly three dozen contractors
engaged in the Department's Tobacco Control Program. He was formerly a staff
accountant with Carter, Turner & Co., (CPAs), (Los Angeles) and served as a
business consultant to various clients in the areas of strategic business
development, asset valuation and financial and tax planning under the umbrella
of his consulting firm - Market Street Advisors, LLC. Falese received an MBA
from the University of Alabama, a Juris Doctorate from Northrop University
School of Law, and an LLM (with a specialty in tax) from Golden Gate University
School of Law. He brings an exceptional depth of knowledge and versatility to
the position of chief financial officer and considered a valuable addition to
the organization.
Also, on the same day, the company announced that on behalf of its subsidiary
InterCare.com, Inc., the company has filed a Registration Statement on Form SB-2
with the Securities and Exchange Commission in anticipation of an initial public
offering of InterCare.com, Inc. common stock.
On January 31, the Company announced the acquisition of a 51% ownership interest
in Meridian Health Systems, Inc. (Inglewood), a Delaware corporation. As
provided by the stock purchase agreement, Meridian Health Systems, Inc. became a
subsidiary of Meridian Holdings, Inc. and the core managed health care unit of
the Meridian group of companies. Dennis Youkstetter, who has been active in
managed health care business in Southern California for nearly 20 years, will
remain as President and CEO of Meridian Health Systems, Inc. Throughout his
distinguished career, Youkstetter has organized and managed a variety of health
plans, participating in the organization of Care America, Blue Shield and Viva
Health plans in the early 1980s. He was also instrumental in the licensing of
Loma Linda University Health Plan, the first tertiary medical
school/hospital-sponsored plan in California., which was later sold to Inland
Health Plan; Bay Shores Health Plan, the first medical group-sponsored health
plan in California.; and Care 1st Health Plan, one of the health plans that
provide managed care services in Los Angeles to those eligible for Medi-Cal.
He served as the latter organization's first president and CEO.
On February 14, 2000, the Company announced the institution of a ``Frequently
Asked Questions'' (FAQs) at the company's web site at www.meho.com with a
------------
<PAGE>
discussion of the Meridian's Subscription Program and dividend policy for
shareholders of the company's common stock. Under the company's Subscription
Program, shareholders who own at least 100 shares of stock of the holding
company in a single account on a given record date will be given the opportunity
to participate in a portion of the initial public offering of a Meridian
Holdings, Inc. majority-owned or subsidiary company. In addition to setting
forth eligibility requirements, the FAQs provide a discussion of procedures for
notification and subscription and typical time frames associated with the
program. Parameters for dividend distribution are also provided, along with an
explanation of how record dates are determined for such purpose.
On February 18, 2000, the Company announced the timely filing of Form 10KSB for
the year ended December 31, 1999, during which the Company indicated that it
generated an annual revenue of approximately $1.4 million.
On Febraury 22, 2000, the Company executed a term sheet with Heller Healthcare
Finance, a division of Heller Financial, Inc. (Heller) (NYSE: HF - news), for
-- ----
the establishment of a line of credit up to $10 million for up to 80% of
Meridian's net collectable accounts receivable. The revolving line of credit
will be available to Meridian for use by the Meridian group of companies to
provide ongoing working capital requirements for two years. As of this writing,
the Company has not borrowed money from this vendor, nor any loan been
granted.
On March 17, 2000, the Company announced that it has engaged the services of
NC Capital Markets (one of The National Capital Companies; Irvine), an
investment banker specializing in capital formation small cap companies, to
assist the company with financing and execution of its acquisitions and business
plans.
Founded in 1992 to provide full-service investment banking, brokerage, trading,
and financing services primarily focusing on new and rapidly growing companies,
NC Capital has a national presence and operates from multiple coast-to-coast
locations. Under the terms of this agreement, the Company will issue 250,000
restricted shares at 0.001 par value for the services to be rendered as per the
Financial consulting services agreement dated March 1, 2000.
On March 20, 2000, the Company announced the appointment of Mr. Dale W. Church,
Esq., to serve a one-year renewable term on the board of directors of its
subsidiary, InterCare.com, Inc. Mr. Dale Church, who will also serve as an
advisor to the Meridian group of companies, is currently Chairman and CEO of
Ventures & Solutions, LLC, a firm specializing in counseling and consulting to
high technology companies. He was formerly a partner in the law firm of
McDermott, Will & Emery's (Washington, D.C.). His practice focused on
international and United States government contracting, developing companies,
mergers and acquisitions and joint ventures. Mr. Dale Church also served as
deputy undersecretary of defense for research and engineering in the Department
of Defense from 1977 to 1980, served as counsel to the President's Blue Ribbon
Commission on Defense Management (the Packard Commission), and served as a
member of the 1988 Defense Science Board Study Program on commercial products
and contracting. He has served on the board of advisors of the American
University Business School, the board of advisors of the National Contract
Management Association (NCMA), the board of editors of the NCMA Journal, and the
Defense Science Board Task Force on industry-to- industry cooperation. He has
written extensively on contract policy and has lectured extensively before major
defense, aerospace and electronics industry associations. Mr. Church serves
on the board of directors of a number of private and public corporations.
Admitted to the bar in the District of Columbia and California, Church is a
member of the American Bar Association and the Federal Bar Association. He
received a BS in business administration from Oregon State University, and he
graduated from George Washington School of Law.
On March 22, 2000, the Company entered into a joint venture with Osprey Data
Systems Corp. (San Clemente). Pursuant to the agreement, Meridian and Osprey
will participate in a global enterprise to cooperatively develop and market
e-commerce, e-communications, and e-business solutions worldwide. Under the
joint venture, each company will contribute equally to the resources and will
benefit equally from the proceeds of venture projects.
To address issues associated with use of the Internet for business and
electronic information management, Osprey Data Systems has created hardware and
software modules and an information management system that provides enhanced
performance, ease-of-use, scalability and multilevel security, at lower prices
than equivalent systems implemented with standard components. Osprey's Net-Gain
2000, for 5-100 users, is designed to improve real-time system performance and
to minimize problems associated with entry-level usage, as well as a larger
number of networked users in operating system environments such as NT, LINUX, or
higher performance systems such as Sun's Solaris. Projects contemplated by the
joint venture include the development of hardware and a compatible software
suite of products that will enhance automated communication, information
processing, filing and group distribution in a highly secure vital private
network environment. This technology will provide utility in areas of health
care, transaction management, telemedicine and distant learning.
On March 27, 2000, the Company announced the execution of a letter of intent in
<PAGE>
anticipation of a formal agreement, whereby Meridian will acquire 55% of Osprey
Data Systems Corp (San Clemente), a developer of IT hardware and firmware.
According to the terms of the contemplated agreement, Meridian will provide
funding to be used for product development and the market launch of Osprey
intelligent information management systems. Also, under the terms of the
agreement, Osprey Data Systems will become a subsidiary of Meridian Holdings,
Inc. A definitive agreement will be executed within 60 days, subject to due
diligence review and approval by the board of directors of both companies.
PART II - OTHER INFORMATION
ADDITIONAL INFORMATION
On April 11, 2000, the Board of Directors approved the amendment of the article
of incorporation of the registrant, whereby the total number of authorized
shares was increased to 100,000,000 Common Stock, and 20,000,000 Preferred Stock
all at $.001 par value. Details of this announcement is contained in the Form
8-K filed on April 11, 2000 and incorporated herein by reference.
On May 8, 2000, the Registrant announced a 3 for 1 forward stock split with a
record date of June 15, 2000 and distribution date of June 30, 2000. This is
pursuant to consent resolution by the Board of Directors for the best interest
of the corporation and shareholders. Details of this announcement is contained
in the Form 8-K filed on May 8, 2000 and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MERIDIAN HOLDINGS, INC.
DATE: May 10, 2000
By: /s/ Philip Falese
-------------------
Philip Falese
Chief Financial Officer
<PAGE>
EX-27.1
FINANCIAL DATA SCHEDULE
[ARTICLE] 5
[MULTIPLIER].1
<TABLE>
<CAPTION>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-START] JAN-01-2000
[PERIOD-END] MAR-31-2000
[CASH] 54,540
[SECURITIES] 3,880,000
[RECEIVABLES] 286,928
[ALLOWANCES] 77,194
[INVENTORY] 5,989
[CURRENT-ASSETS] 274,805
[PP&E] 123,676
[DEPRECIATION] 97,889
[TOTAL-ASSETS] 4,180,592
[CURRENT-LIABILITIES] 88,310
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 31,158
[OTHER-SE] 3,875,050
[TOTAL-LIABILITY-AND-EQUITY] 4,180,592
[SALES] 337,185
[TOTAL-REVENUES] 337,185
[CGS] 201,437
<TOTAL OP COSTS> 202,651
[OTHER-EXPENSES] (5,631)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (72,533)
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (72,533)
[EPS-BASIC] 0
[EPS-DILUTED] 0
</TABLE>
<!-- EDIT LINE -->
