Mail Stop 6010
August 10, 2005
VIA U.S. MAIL AND FAX 82-2-2103-3333
Mr. Hyeon Seong Myeong
President, Chief Executive Officer and Director
Meridian Co., Ltd.
The Republic of Korea
4F, Heungseong Building, 197-3
Jamsil-Dong
Songpa-Gu, Seoul, Korea
Re: Meridian Co., Ltd.
Form 20-F for the year ended December 31, 2004
Filed July 18, 2005
File No. 000-32359
Dear Mr. Myeong:
We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents. Where indicated, we think you should revise your
documents
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 20-F for the year ended December 31, 2004
Item 15. Controls and Procedures
1. We note your disclosure that your principal executive officer
and
directors of the company have evaluated your disclosure controls
and
procedures as of a date within 90 days before the filing date of
your
annual report. Please revise in future filings to disclose
management`s conclusion regarding the effectiveness of your
disclosure controls and procedures as of the end of the period
covered by the annual report. Refer to Item 307 of Regulation S-K
and Part III.F of Management`s Reports on Internal Control Over
Financial Reporting and Certification of Disclosure in Exchange
Act
Periodic Reports, Release No. 33-8238, available on our website at
www.sec.gov/rules/final/33-8238.htm.
Financial Statements
Report of Independent Registered Public Accounting Firm
2. The audit report included in the Form 20-F filed in EDGAR is
not
signed. Please amend to include an audit report that includes the
conformed signature of your independent auditor. Refer to Article
2
of Regulation S-X.
3. Since Shinhan Accounting Corporation has referred to another
audit
report in their opinion, please amend this filing to include the
audit report of the other auditors, SamDuk Accounting Corporation.
Refer to Rule 2-05 of Regulation S-X. Also, note the SamDuk
Accounting Corporation audit report requested should reference
"the
standards of the Public Company Accounting Oversight Board (United
States)" rather than GAAS. This revision is required to comply
with
PCAOB Auditing Standard No. 1 since the audit report will be
reissued
after May 24, 2004.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition
4. Please expand your revenue recognition policy in future filings
to
address the following:
* Explain whether any of your product sales include customer
acceptance, installation, price protection agreements, or other
post
shipment obligations and how you account for them.
* Provide details of whether your revenue transactions have
multiple
deliverables and how you comply with EITF 00-21.
* Explain how software is incorporated into your products or
otherwise sold. Disclose how you account for sales of stand alone
software or software embedded in your products.
Stock Option Plan
5. Please revise your tabular presentation in future filings to
present for all periods for which an income statement is
presented.
In addition, please revise your table to include a separate line
item
for stock-based employee compensation cost that would have been
included in the determination of net income if the fair value
based
method had been applied to all awards. See paragraph 45 of SFAS
123.
6. It appears that you did not use a volatility factor to estimate
the fair value of your options granted. Please clarify the
methodology used to determine the fair value of options in future
filings and tell us why you believe your accounting is
appropriate.
Note 13. Long-Term Debt
7. We see that in February 2004, you received an approval for a
debt
rescheduling plan which resulted in adjusted payment periods and
exemption from paying certain interest previously accrued. Please
provide us with further details of the terms of the rescheduling
plan
for us and tell us your related accounting. Cite the accounting
guidance upon which you based your accounting. Revise future
filings
to clearly indicate how you account for this transaction.
Note 14. Retirement and Severance Benefits
8. We see that the company provides retirement and severance
benefits
to employees. Please revise future filings to include the
disclosures
outlined in paragraph 5 of SFAS 132(R) or alternatively, tell us
and
revise your future disclosures to indicate why you do not believe
such disclosures are necessary.
Note 20. Stock Options
9. We see that you "experienced a debt-for-equity swap in October
2004. Please tell us the terms of this transaction and how you
accounted for the swap.
10. We also see that you issued 3.3 million shares of common stock
in
exchange for investor relations and marketing services. Please
provide us with further details regarding your accounting for this
transaction in your financial statements, including your cash flow
statement.
Exhibit 12. Certifications of Chief Executive Officer and Chief
Financial Officer
11. We note that the certifications filed as Exhibits 31.1 and
31.2
were not in the proper form. The required certifications must be
in
the exact form prescribed; the wording of the required
certifications
may not be changed in any respect, except for the modifications
temporarily permitted to be made to the fourth paragraph of the
certification required to be filed as Exhibit 31.1 pursuant to
Part
III.E of Release No. 8238. Accordingly, please file an amendment
to
your Form 20-F that includes the entire filing together with the
certifications of each of your current CEO and CFO in the form
currently set forth in Item 601(b)(31) of Regulation S-K.
As appropriate, please amend your Form 20-F for the year
ending
December 31, 2004 and respond to these comments within 10 business
days or tell us when you will provide us with a response. You may
wish to provide us with marked copies of the amendment to expedite
our review. Please furnish a cover letter that keys your
responses
to our comments and provides any requested supplemental
information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* The company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* Staff comments or changes to disclosure in response to staff do
not
foreclose the Commission from taking any action with respect to
the
filing; and
* The company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Julie Sherman, Staff Accountant, at (202)
551-
3640, or me at (202) 551-3603 if you have questions regarding
these
comments. In this regard, do not hesitate to contact Angela
Crane,
Accounting Branch Chief, at (202) 551-3554.
Sincerely,
Jay Webb
Reviewing Accountant
Mr. Hyeon Seong Myeong
Meridian Co., Ltd.
August 10, 2005
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