SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number 0-28223

MERIDIAN USA HOLDINGS, INC.
---------------------------
(Name of Small Business Issuer in Its Charter)

Florida 65-0510294
-------------------------------- -------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

3350 N.W. 2nd Avenue
Boca Raton, Florida 33431
--------------------- --------
(Address of Principal Executive Offices) (Zip Code)

561) 417-6800
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(Issuer's Telephone Number, Including Area Code)

www.meridianusaholdings.com
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(Issuer's Website)

Securities registered under Section 12(b)
of the Exchange Act: NONE

Securities registered under Section 12(g)
of the Exchange Act: Common Stock, $0.001 par value

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 past 90 days.
Yes_________ No X____

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained herein and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.

Revenues for the year ended December 31, 1999: $395,980.00

As of March 31, 2000, there were outstanding 5,736,399 shares of the
registrant's Common Stock, $.001 par value, which is the only outstanding class
of common or voting stock of the registrant. As of that date, the aggregate
market value of the outstanding shares of Common Stock held by non-affiliates,
based on the average of the closing bid and asked price of such Common Stock as
quoted in the OTC Bulletin Board was $10,038,698.25.

Transitional Small Business Disclosure Format (check one):
Yes X____ No_________

DOCUMENTS INCORPORATED BY REFERENCE

None.

MERIDIAN USA HOLDINGS, INC.
1999 FORM 10-KSB
TABLE OF CONTENTS

PAGE
PART I

ITEM 6. DESCRIPTION OF BUSINESS 4
ITEM 7. DESCRIPTION OF PROPERTY 14
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 14
ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS 17
ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS 19
ITEM 11 INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS 20
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS 20
ITEM 2. LEGAL PROCEEDINGS 21
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 21
ITEM 5. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT 21
ITEM 6. REPORTS ON FORM 8-K 21
PART F/S

PART III
ITEM 1. INDEX TO EXHIBITS 22
ITEM 2. DESCRIPTION OF EXHIBITS 22

PART I

ITEM 6. DESCRIPTION OF BUSINESS.

(a) Business Development:

1. FORMATION OF MERIDIAN USA HOLDINGS, INC.

Meridian USA Holdings Inc. ("Meridian") was incorporated in the
State of Florida on August 4, 1994 for the purpose of effecting a change of
domicile, as the surviving entity in a merger with a then public 'shell' entity
MHI Telecommunications, Inc. ("MHI Telecom").

MHI Telecom was a Delaware corporation that had sold shares to
the public pursuant to a Regulation "A" exemption from registration during 1969,
under its original corporate name of Pilgrim Mills, Inc.

From 1985 through July 15, 1998, Meridian was not actively
engaged in any business operations. In August 1994, the shareholders of MHI
Telecom and Meridian approved a merger of MHI Telecom into Meridian and a
simultaneous 1 for 40 reverse stock split of Meridian's outstanding shares. At
the same time, the shareholders also authorized Meridian to raise working
capital through an appropriate financing, and to acquire an operating business
or otherwise engage in or conduct active business operations. Through the end
of 1998, Meridian did not engage in any formal fund raising, other than the
issuance of shares to certain shareholders in exchange for services and the
advancement of minimal funds in behalf of Meridian.

2. PURCHASE OF SHARES OF THE
OLD FASHIONED SYRUP CO., INC.

On January 8, 1999, Meridian entered into an Acquisition Agreement
with The Old Fashioned Syrup Company, Inc. (the"Syrup Company"), pursuant to
which Meridian issued 3,026,794 shares of Meridian's common stock to the
shareholders of the Syrup Company in a tax-free exchange of shares.
Simultaneously with the Acquisition Agreement, Meridian entered into a Stock
Purchase Agreement with a founder and current director of Meridian, pursuant
to which Meridian purchased 100,000 shares of its Common Stock for the sum of
$50,000. The shares repurchased were retired by Meridian.

The Syrup Company had been incorporated in Florida in November 1996
for the purpose of developing and marketing a sugar-free, fat-free chocolate
flavored syrup. The Syrup Company has two wholly-owned subsidiaries; The Old
Fashioned Egg Cream Company, Inc. and The Original Egg Cream Company, Inc., both
of which are Florida corporations.

3. SWEET 'N LOW(R) LICENSE AGREEMENT WITH
CUMBERLAND PACKING CORP.

In January 1999, the Syrup Company entered into a ten (10) year
license agreement with Cumberland Packing Corp. under which the Syrup Company
was granted the exclusive license to utilize the well-known Sweet 'N Low(R)
brand name in connection with the sale of its sugar-free, fat-free chocolate
syrup product (the "Syrup"). The Syrup was first introduced to the food industry
under the Sweet'N Low(R) name in late January 1999. The Syrup is free of all
sugar, fat and cholesterol.

4. EGG CREAM COMPANIES

The Old Fashioned Egg Cream Company, Inc. was incorporated in Florida
in 1993. From that time through 1999, it engaged directly or through franchises
in the business of selling freshly made egg cream drinks and other food items to
the public from specially designed carts decorated to the motif of early 20th
century Brooklyn and bearing the registered trademark Old Fashioned Egg Cream
Company. The Old Fashioned Egg Cream Company is currently not conducting any
active business operations.

5. CHAMPIONLYTE, INC.

ChampionLyte, Inc. was incorporated in Florida in 1999 to develop,
market and distribute a line of sugar-free non-carbonated beverages under the
Company's trademark ChampionLyte(TM). The Company intends to ship its first
products in the second quarter of 2000.

(b) Business of Issuer:

(b)(1) Principal Products and Services and their Markets.

SWEET'N LOW (R) SYRUP. The Syrup Company's principal products
are its sugar-free, fat-free, cholesterol-free syrups marketed under the
well-known Sweet'N Low brand name. The Syrup Company utilizes the brand-name
under a long-term license agreement with Cumberland Packing Corp., the owner of
the Sweet'N Low(R) family of trademarks. Under the agreement, the Syrup Company
has the exclusive right to utilize the Sweet'N Low mark on chocolate-flavored
syrup. It also has the exclusive right of first refusal to utilize the mark on
other flavored syrups. In 1999, the Company introduced its chocolate flavored
syrup. In the first quarter of 2000, Cumberland approved the Syrup Company's
introduction of two new flavors, strawberry and vanilla creme syrups, under the
Sweet'N Low(R) name. The Syrup Company introduced the new flavors to the market
in February 2000. The license agreement has an initial term of ten (10) years,
expiring December 31, 2008. The Syrup Company has the right to renew the
agreement for two additional 7 year renewal terms, provided it is not in
default. The agreement contains minimum royalty and marketing expenditure
requirements during each year of the term. The Syrup Company has satisfied all
requirements for the first contract year and anticipates that it will be able to
meet the remaining minimum requirements under the contract throughout its term.
However, if the Syrup Company fails to meet its requirements, Cumberland has the
right to terminate the license. In connection with the license agreement,
Meridian issued to Cumberland warrants to purchase 350,000 shares of Meridian's
common stock at a price equal to the greater of$2.50 per share or 50% of the
average trading price for the Meridian's shares during the twenty (20) trading
days preceding the exercise of the Warrants. The number of warrants was
increased to 385,000 as a result of a 10 percent stock dividend in September
1999.

OLD FASHIONED EGG CREAM. Meridian, through the Syrup Company's
subsidiaries, Old Fashioned Egg Cream Company, Inc. and Original Egg Cream
Company (collectively the "Egg Cream Companies"), has engaged in the business
of offering freshly made "egg cream" drinks to the public from custom-designed
carts at sports arenas, shopping malls and other high population traffic
locations. The egg cream, a traditional and legendary New York soft drink, is a
mixture of milk, seltzer and chocolate syrup. From 1993 until 1998, the Egg
Cream Companies, on their own and through franchisees, operated two carts at
various locations, including Madison Square Garden in New York City, Joe Robbie
Stadium in Miami, Florida, Festival Flea Market in Pompano Beach, Florida and
Coral Square Mall in Boynton Beach. In addition, the egg creams were sold
through licensed concessionaires at the Miami Arena in Miami, Florida and
various food service establishments in South Florida.

The Egg Cream Companies' marketing has been based on a nostalgic
appeal to early 20th century Brooklyn, where egg creams were developed and
flourished as a popular chocolate-flavored soft drink. Meridian's carts and
logo are designed with a Brooklyn motif - Ebbets Field, the Brooklyn Bridge,
trolley cars. The carts also offer pretzel rods and Charlotte Russe
confections.

The Egg Cream Companies are not currently conducting any active
business operations. Neither of the egg cream carts is currently in operation
and there are no current franchisees. Meridian's current business plan is to
engage the services of an experienced franchise industry executive to
re-establish the Egg Cream Companies' franchise business. The Egg Cream
Companies are currently registered to sell franchises with the New York State
Attorney General's office and is exempt from registration with the State of
Florida.

CHAMPIONLYTE, INC. ChampionLyte, a wholly-owned subsidiary of
Meridian, was incorporated in Florida in August 1999 for the purpose of
developing and marketing a sugar-free soft drink. The drink, a sugar-free
alternative to active drink market products such as Gatorade(R) and Power
Ade(R), is planned to be introduced in four flavors (lemon-lime, orange creme,
grape and fruit punch) in the second quarter of 2000.

(b)(2) Market:
-------
(i) RETAIL MARKET The principal customers for the Syrup
are food retailers, such as supermarkets, drug store chains, discount stores
and warehouse centers. The Syrup Company has established a network of
international, national and regional food brokers to market the Syrup to these
outlets. The success of the Syrup Company is dependent upon its ability to have
its products available at such outlets throughout the country. Management of
the Syrup Company believes that the quality of its products, their appeal to
health-conscious consumers, the fame and reputation of the Sweet 'N Low
trademark and its network of food brokers should enable it to penetrate the
retail food market.

The primary consumers at whom the Syrup Company is directing its
marketing efforts are diabetics. According to a 1996 estimate by the American
Diabetes Association, there are approximately 16,000,000 Americans suffering
from diabetes, plus another five to ten million Americans who are required to
maintain a strict diet regime for various medical conditions. In addition,
millions more Americans restrict their sugar consumption in an effort to reduce
their calorie intake. All of these people form a natural market for the Syrup
Company's product. The enormous success of products such as Diet Coke(R), Snack
Well(R) cookies and various sugar-free ice cream products have established that
there is a substantial market for sugar-free/reduced calorie food products.

Management believes that the Syrup is the first sugar-free syrup
product available which provides a satisfying and acceptable taste and texture
in the three available flavors. Public and industry acceptance have been very
positive to date. In July 1999, the National Board of the American Tasting
Institute granted its 1999 American Tasting Award of Excellence to the Syrup.
In June 1999, the Syrup Company's product was voted the Best New Product in the
general merchandise category by the National Association of Chain Drug Stores.
Public response has also been positive, as reflected by substantial reorders.

In June 1999, in a further effort to expand the market for its
products, Meridian entered into an agreement with Francis Anthony, the "Love
Chef" of television and magazine fame, under which Mr. Anthony has agreed to
develop recipes for the Syrup Company and represent the product to the public.
Meridian believes that Mr. Anthony's involvement has and will continue to
increase the visibility of the Syrup Company's products.

(ii) INSTITUTIONAL/FOOD SERVICE MARKET. Another important
market for the Syrup will be bulk package sales to institutional and food
service customers, such as hospitals, nursing homes, schools, hotels,
restaurants, ice cream and frozen yogurt shops, baked and prepared food product
manufacturers and sports and entertainment venues. Hospitals and nursing homes,
aggregating more than 40,000 units nationwide, present a natural market for the
Syrup, especially for diabetes sufferers and others required to restrict their
sugar intake. The Syrup also fills the ever growing niche of reduced calorie
and reduced fat alternatives to popular snack foods and sweets. The Company is
establishing its distribution processes for this market and intends to
commence shipments during the second quarter of 2000.

(iii) PRIVATE LABELING. Under its agreement with Cumberland, the
Syrup Company has the right to package and sell a percentage of its annual syrup
production under the private label of its customers. To date, the Syrup Company
has not shipped any private label goods but plans to commence shipment of such
goods during 2000.

(iv) INTERNATIONAL MARKETING. Management has negotiated an
arrangement with Cumberland by which Cumberland has agreed to act as an
international distributor of the Syrup Company's chocolate, strawberry and
vanilla creme syrups in approximately 43 nations throughout the world where
Sweet'N Low sugar substitute is marketed. In addition, the Syrup Company has
signed an agreement with Nafpro Canada, Inc. to serve as the exclusive broker

for the sale of Syrup in Canada. These arrangements should provide
international distribution on a widespread and favorable cost basis.

(b)(3) New Products or Services.
----------------------------
In the first quarter of 2000, Meridian completed its development of a
sugar-free soft drink, which it intends to introduce to the market in the second
quarter of 2000. The product is designed to compete in the active drink
industry, by providing a sugar-free alternative to well-known products such as
Gatorade(R), and Power Ade(R). The Company believes that its product can fill
an economically significant niche in this growing "sports drink" category.
Current sales of drinks in this category exceed $2 billion per year. Based on
historical patterns, the Company believes that sugar-free products introduced to
this market should be able to capture up to 10% of the total market. The
Company believes it will be able to capture a significant portion of that share,
based on consumer reactions to the products in taste tests and on the Company's
existing network of distribution for its sugar-free, fat-free syrups.

(b)(4) Competition.
-----------
There are other brands of syrup on the market, some of which
advertise as fat-free, sugar-free, cholesterol-free or low-calorie, as well
as nationally and internationally known brands of syrup, which could reasonably
be considered as competition for the Syrup Company's products. Major chocolate
manufacturers, such as Hershey, sell syrups designated as "Lite" and Smuckers
has recently introduced a sugar-free chocolate flavored syrup. These

companies are larger and have greater resources than Meridian and therefore
can expend greater funds in marketing and advertising their products.
Meridian's ability to compete successfully with those companies is dependent
upon its ability to continue to produce a tasty product and persuade food
retailers to carry its product. Meridian believes that its product, with
targeted marketing under the internationally renowned Sweet'N Low brand name,
will continue to be favorably received in the market place and establish the
Syrup Company as a significant purveyor of sugar-free, fat-free and cholesterol-
free syrups and other products.

In the soft drink category, the Company will be competing with
major soft drink distributors including Pepsico, Gatorade and others. The
ability to compete successfully with these companies is dependent upon the
Company's ability to produce a tasty, sugar-free alternative to the existing
sugared drinks and to persuade food retailers to carry its products. Based on
consumer taste tests, the Company believes it has created products which will be
receptive to consumers as a sugar-free alternative to sugared sports drinks.
The Company also believes that the inroads to the retail food market it has
already established with its syrups should facilitate its ability to gain access
to those markets for its soft drink product. However, the competition for shelf
space in food retail establishments is intense and the ability to obtain such
shelf space is essential to the potential success of these products.

(b)(5) Sources of Supply.
--------------------
The Syrup is manufactured, packaged and shipped on behalf of the
Syrup Company by co-packers under separate agreements. The bulk of the
Company's current production is being manufactured by Beverage House, Inc. in
Cartersville, Georgia. The Company also has a co-packing agreement with Sea
Breeze, Inc., located in Towaco, New Jersey. The products are manufactured to
specifications and formulae developed by the Syrup Company and approved by
Cumberland. The Syrup Company monitors production to assure quality control and
consistency. The Syrup Company believes that this co-packing method of
manufacture and distribution is beneficial for the Syrup Company since it allows
production and shipment without the substantial capital expenditure required to
establish its own production facilities. Under its agreement with Sea Breeze,
the Syrup Company has agreed to pay that company $.50 for each case of the

Syrup packed and shipped through any other co-packer during the term of the
Agreement in the event the Syrup Company ceases packing and shipping through Sea
Breeze at customary levels.

Meridian is also in the process of identifying additional
suppliers around the country who satisfy Meridian's quality and delivery
requirements. Meridian believes that having such regional facilities spread
throughout the country would reduce the cost and timing of delivery and thereby
help Meridian better meet the anticipated needs of its customers.

The soft drinks will be manufactured, packaged and shipped on
behalf of the Company by Beverage House. The drink concentrate will be
manufactured by Beverage House in Georgia using Meridian's formulas and the
product will then be manufactured, packed and shipped through a sub-contract
facility of Beverage House in Pennsylvania.

(b)(6) Major Customers.
-----------------
The Syrup Company has approximately 150 customers, none of whom
accounts for 10% or more of the Syrup Company's total sales.

(b)(7) Patents, trademarks, licenses.
--------------------------------
The Syrup Company's subsidiary, The Old Fashioned Egg Cream
Company, Inc., is the owner of the U.S. Trademark registrations for the mark OLD
FASHIONED EGG CREAM for food products, clothing items and food service. The
Syrup Company is the owner of the trademarks THE OLD FASHIONED SYRUP COMPANY
and NO GUILT, both of which are the subject of pending applications in the
United States Patent and Trademark Office. ChampionLyte is the owner of the
trademark CHAMPIONLYTE which is also the subject of a pending trademark
application in the United States Patent and Trademark Office.

Under a license agreement dated January 1999 with Cumberland, the
Syrup Company acquired the license to use the Sweet 'N Low trademark in
connection with the manufacture and sale of its sugar-free, fat-free syrup. The
Syrup Company is currently negotiating with Cumberland to expand its license
rights to include sugar-free beverages.

Meridian intends to continue to protect all of its intellectual
property through appropriate state and federal registrations and enforcement.

(b)(8-9) Government Regulation and Approval.
--------------------------------------
The labeling of Meridian's products is subject to regulation by the
United States Food and Drug Administration. The Company believes that it is in
full compliance with those regulations. The sale of food products to the public
is subject to various state and local health and safety regulations. It is
Meridian's policy to comply in full with all such regulations.

(b)(10) Research and Development.
---------------------------
Since 1998, Meridian has engaged in research and development
related to its current and proposed new products through its contract
co-packers. The expenditures on research and development have been undertaken
by the co-packers, with participation in the development process by the Syrup
Company's employees.

(b)(11) Environmental Compliance.
--------------------------
Meridian does not anticipate any significant costs to comply
with environmental laws and requirements.

(b)(12) Employees.
----------
As of March 31, 2000, Meridian had six (6) full-time employees,
all of whom worked at Meridian's offices in Boca Raton, Florida.

(c) Reports to Shareholders.
--------------------------
Meridian became subject to the information and reporting
requirements of the Securities Exchange Act of 1934, as amended(the "Exchange
Act") in January 2000, upon the effective date of its registration statement on
Form 10-SB. As such, Meridian is required to and will file reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
with the Commission by Meridian may be inspected and copied at the public
reference facilities maintained by the Commission at its principal offices at
Judiciary Plaza, 450 5th Street NW, Washington, D.C. 20549. Such reports, proxy
statements and other information may also be obtained from the website
maintained by the Commission at http://www.sec.gov. Copies of these materials
can also be obtained at prescribed rates from the public reference section of
the Commission at its principal offices in Washington D.C., as set forth above.

(d) Management's Discussion and
Analysis of Financial Condition
----------------------------------

(d)(1) Results of Operations:
------------------------
In 1999, Meridian's sales revenues were $395,980, as compared to
$144,206 in 1998, an increase of 175%. However, Meridian had a net loss of
1,017,264, or $.20 per share, as compared to a net loss of 166,996, or $.04 per
share, in 1998. The increased loss in 1999 was attributable primarily to five
factors: the commencement of payment of salaries to officers in 1999, the
addition of a sales vice president in May 1999, increased advertising costs and
slotting fees, increased trade show expenses and associated travel expenses, and
increased professional fees related tot he reverse acquisition of Old Fashioned
Syrup Company, the completion of the Cumberland (Sweet N'Low) License
Agreement and the registration of the Company's securities under the Securities
Exchange Act. These increases were generally attributable to the start-up
nature of Meridian's business in 1999. Such expenses as a percentage of sales
revenues are expected to decrease significantly in 2000.

(d)(2) Liquidity and Capital Resources
----------------------------------
Meridian's available cash at December 31, 1999 was approximately
$68,000, as compared to approximately $36,000 at December 31, 1998. Working
capital in 1999 was provided primarily from the exercise of outstanding
common stock purchase warrants issued in a Regulation D, Rule 504 Offering in
1999. Meridian believes that cash flow from operations during 2000 would
provide sufficient working capital to operate its syrup business during
2000. However, Meridian intends to introduce a new sugar-free soft drink
during the second quarter of 2000, for which it intends to expend working
capital beyond amounts provided by operations. It is management's intention
to continue to raise private investment capital in the early part of 2000,
with the intention of making an initial public offering of its securities in
the fourth quarter of 2000. An additional $427,500 has been raised from
private investors in the first quarter of 2000. If Meridian does not complete
the proposed IPO during 2000, it will seek bridge loan or other debt financing
to generate the working capital sufficient to conduct and continue to grow its
business.

ITEM 7. DESCRIPTION OF PROPERTY.

Meridian's executive and administrative offices occupy approximately
1,607 square feet of office space at 3350 N.W. 2nd Avenue, Suite A-28, Boca
Raton, Florida. Meridian leases this space from an unaffiliated party at an
annual cost of $19,284.00 plus common area maintenance charges under a lease
which expires on February 28,2001. Meridian also rents warehouse and
distribution facilities in Jersey City, New Jersey from Port Jersey Distribution
Services, with rental based on the amount of space and services used each month.

ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

Meridian's executive officers and directors are as follows:

NAME AGE POSITION
- --------------- --- -------------------------------------------------------------------------

Mark Streisfeld 49 President, Director

Alan Posner 54 Chief Executive Officer, Chief Financial Officer,
Secretary and Director

Ronald Shapss 53 Director

Joel Flig 46 Director

Paul M. Galant 58 Director

The principal occupation, title and business experience of Meridian's
executive officers and directors during the last five years, including the names
and locations of employers, is indicated below:

MARK STREISFELD was elected as President and Director on February 24,1999. He
was co-founder and has been president of The Old Fashioned Syrup Company, Inc.,
its subsidiaries and predecessors since 1994. From 1976 to 1989, Mr. Streisfeld
operated a retail electronics business in Monticello, New York, which he
founded. From 1989 to the present, Mr. Streisfeld has operated a multi-

faceted jewelry enterprise in Monticello, founded by him and his family.
From 1973 to 1976 he was an elected trustee of the Village of Monticello.
Since 1985 Mr. Streisfeld has been a Rated Jeweler by the Jewelers Board
of Trade and a member of the Advertising Specialties Institute. He is currently
a member of the Sullivan County (NY) Chamber of Commerce, the Sullivan County
Action Committee and the Board of Directors of the New Hope Community for
Retarded Adults (Sullivan County, NY).

ALAN POSNER was elected as CEO, Secretary and Chairman of the Board of Directors
on February 24, 1999. Prior to that he was co-founder and has served as
CEO/Secretary/ Treasurer of The Old Fashioned Syrup Company, Inc., its
subsidiaries and predecessors since 1994. From 1973 to 1985 Mr. Posner was
employed in various professional and administrative capacities, including having
served as the Senior Associate Administrator at Brookdale Hospital Medical
Center in Brooklyn, New York. From 1985 to 1993 he was a principal of Medical
Care Administration, Inc. and Healthrac, Inc.,multi-service medical providers,
medical management and consulting firms. From 1991 to 1994, Mr. Posner was a
member of the New York City Mayor's Advisory Committee for Emergency Medical
Services. He is a member of the American College of Health Care Administrators,
the American Public Health Association and the New York Association for
Ambulatory Care. Mr. Posner received dual Bachelor of Science degrees(Biology
and Nursing) in 1971 and a Master's of Science Health Care Administration in
1973 from the State University of New York at Stony Brook. From 1965 to 1968 he
served in the U.S. Naval Hospital Corps.

RONALD SHAPSS, a director of Meridian since August 1999, is the founder of
Ronald Shapss Corporate Services, Inc. (RSCS) a company engaged in consolidating
fragmented industries since 1992. RSCS was instrumental in facilitating the
roll-up of several companies into such entities as U.S. Delivery, Inc.,
Consolidated Delivery & Logistics, Inc. and Corestaff, Inc. Mr. Shapss was also
the founder of Coach USA, Inc. and is presently on the advisory boards of
Consolidated Partners Founding Fund, LLC and 1+ USA, Inc., which founded
Advanced Communications Group, Inc., a competitive local exchange carrier whose
shares trade on the New York Stock Exchange. Since 1997 he has been a
consultant and a member of the Board of Directors of Fronting Communications
Corporation,(NASDAQ: FCC). Mr. Shapss is a member of the New York Bar, having
graduated from Brooklyn Law School.

JOEL FLIG, a director of Meridian since August 1999, is the founder(1989) and
CEO of Financial Solutions Group, Ltd., a New York based company engaged
nationwide in placement of senior debt. Since 1998 he has been a director of
Sparta Surgical Supply Co. Prior to his current business entity, Mr. Flig was a
member of the Board of Directors and Executive Vice President of Aspen
Financial, Inc. (a bank holding company) and from 1981 to September 1988 he was
First Vice President of Union Chelsea National Bank (NY). From 1977 through
May, 1981 he served in a variety of executive capacities at Republic National
Bank (NY)and began his banking career in the Management Development program at
Chase Manhattan Bank (NY) in 1974. Mr. Flig received a B.B.A. degree in1977
from the Bernard Baruch College of the City of New York, and his MBA-Finance
from St. John's University (NY).

PAUL M. GALANT was appointed by the new Board of Directors as Special Counsel in
February, 1999, served as an officer and director of Meridian from August 1994
to February 24, 1999 and was elected to Meridian's Board of Directors in August
1999. Between 1975 and 1997, Mr. Galant was a registered NASD General Securities
Principal. He has been a business development consultant since 1970. He has
served as an officer and director of various development stage companies,
including Deerfield Financial Services, Inc., www.eBIZnet.com, Inc. and is the
founder and currently serves as an officer and director of NetWeb Online.Com
Inc. He has been a practicing attorney in the State of New York since
1966. Between1975 and 1986, Mr. Galant was a founding partner and general
principal of a Long Island (NY) based full service brokerage firm. Subsequently,
he was cofounder, an officer and/or a registered principal of several NASD
member securities/brokerage firms in the New York metropolitan area. Since 1981
he has served as President of PR Sources Inc., a private entity engaged in
corporate development services. From 1966 through 1968 he served in the
U.S. Army. Mr. Galant is a 1965 graduate of Brooklyn Law School (J.D.), and
received a Bachelor of Business Administration degree from Adelphi University
in 1962.

ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS

(a) Compensation

Name of Individual or Identity of Group Capacities in Which Remuneration was Received Aggregate Remuneration
in 1999

Mark Streisfeld President and Director $ 126,5001
Alan J. Posner Chief Executive Officer and Director $ 126,5002
All Officers and Directors as a group (5 persons) $ 257,000
- ------------------------------------------------- ----------------------------------------------

1Consists of $49,500 paid during 1999 and $75,000 of compensation deferred
until 2000.

2Consists of $49,500 paid during 1999 and $75,000 of compensation deferred
until 2000.

(b) Ongoing plans or arrangement

1) STOCK OPTION PLAN
-------------------

In August 1999, Meridian adopted an Incentive Stock Option Plan.
Under the Plan, the Board is authorized to issue up to 100,000 options
to purchase Meridian's stock to its employees, directors, consultants
and agents in each year during the term of the Plan. The options granted under
the Plan may be qualified or non-qualified. No options were granted under the
Plan in 1999. In 2000, Meridian agreed to issue 20,000 options per year for
five (5) years to each of Mark Steisfeld and Alan Posner in connection with
their employment contracts, with the first Installment to be issued on October
31, 2000.

2) COMPENSATION OF DIRECTORS
---------------------------

Directors are paid $1,500 for each [annual] meeting of the Board
Which they attend.

3) EMPLOYMENT CONTRACTS
---------------------

Meridian has entered into employment contracts with the following
individuals:

1. Alan Posner.
------------
In January 2000, the Company entered into a four (4) year
employment contract with Alan Posner to serve as Chief Executive Officer.
Under the Agreement, Mr. Posner receives a base salary of $125,000 per year
through October 31, 2000, $175,000 per year from November 1, 2000
through October 31, 2001 and $250,000 per year from November 1, 20001
through October 31, 2004. Pursuant to a separate agreement, Mr. Posner has
agreed to defer $75,500 of compensation due to him in 1999 to 2000. In
addition, Meridian has agreed to issue Mr. Posner a total of 100,000 stock
options under its 1999 Incentive Stock Option Plan in five (5) equal annual
installments of 20,000 options each commencing October 31, 2000.

2. Mark Streisfeld
----------------
In January 2000, the Company entered into a four (4) year
employment contract with Mark Streisfeld to serve as its president. Under
the Agreement, Mr. Streisfeld receives a base salary of $125,000 per year
through October 31, 2000, $175,000 per year from November 1, 2000 through
October 31, 2001 and $250,000 per year from November 1, 2001 through October 31,
2004. Pursuant to a separate agreement, Mr. Streisfeld has agreed to defer
$75,500 of compensation due to him in 1999 to 2000. In addition, Meridian
has agreed to issue Mr. Streisfeld a total of 100,000 stock options under its
1999 Incentive Stock Option Plan in five (5) equal annual installments of 20,000
options, each commencing October 31, 2000.

3. Steven Kreuscher.
-----------------
On March 15, 2000, the Company entered into an agreement with
Steven Kreuscher as vice president of sales for a term of two (2) years. Under
the Agreement, Mr. Kreuscher will receive a salary of $90,000 per year plus
sales commissions of 1 % of net shipments by the Company during the term of
his employment. Meridian has also agreed to provide an automobile expense
allowance and to issue Mr. Kreuscher 5,000 shares of its Common Stock upon
completion of the 30th day of his employment.

(e) Report on Repricing of Options/SARS
---------------------------------------
Meridian has not repriced any options or stock appreciation rights.

ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS.

The following table sets forth information as of March 31, 2000 with
respect to the beneficial ownership of Meridian's securities by officers and
directors, individually and as a group. To Meridian's knowledge, on March 17,
2000, there were no holders of more than 5% of its Common Stock other than Alan
Posner, and Mark Streisfeld. Unless otherwise indicated, all shares are
beneficially owned and sole investment and voting power is held by the
beneficial owners indicated. On March 31, 2000 there were 5,736,399 shares of
Common Stock, 350 shares of convertible Preferred Stock and 385,000 Common Stock
Purchase Warrants outstanding. No shares of any other class of capital stock are
outstanding.

NAME AND ADDRESS OF TITLE OF CLASS AMOUNT AND NATURE PERCENT OF
BENEFICIAL OWNER OF BENEFICIAL CLASS
OWNERSHIP

Paul Galant Common Stock 330,0003 - Direct 5.8%
470 N.E. 25th Terrace
Boca Raton, FL

Alan Posner Common Stock 1,112,7914 - Direct 19.4%
198 Gregory Rd.
Monticello, NY 12701 Series I
Preferred Stock 1,750 - Direct 50%

Ronald Shapss Common Stock 220,972 - Direct 3.9%
S. Prestwick Court
New City, NY 10956

Mark Streisfeld Common Stock 1,112,7915 - Direct 19.4%
75 Atwell Lane
Monticello, NY 12701 Series I 1,750 - Direct 50%
Preferred Stock

All Officers and Directors as a Group Common Stock 2,776,554 48.4%
(5 persons) Series I
Preferred 350 100%
- -------------------------------------- -------------- ----------- ------

3Includes 55,000 shares held by PR Sources, Inc., a Florida corporation
controlled by Mr. Galant.

4Excludes 577,750 shares of Common Stock issuable to Mr. Posner upon conversion
of his 1,750 shares of Series I Preferred Stock. (See "Description of
Securities - Preferred Stock").

5Excludes 577,750 shares of Common Stock issuable to Mr. Streisfeld upon
conversion of his 1,750 shares of Series I Preferred Stock. (See "Description
of Securities - Preferred Stock").

ITEM 11. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS

Meridian has no relationships or transactions required to be disclosed
pursuant to this Item.

PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS.

(a) MARKET PRICE.
-------------
Meridian's Common Stock is traded over-the-counter on the
electronic bulletin board operated by the National Association of Securities
Dealers. From inception until December 13, 1999, the shares traded under the
symbol MDHG. On December 13, 1999, Meridian changed its trading symbol to MUSD
in connection with the change of its name to Meridian USA Holdings, Inc. The
following table sets forth the high and low bid prices for the Common Stock
since the inception of its quotation on the Bulletin Board during the first
quarter of 1999.

YEAR QUARTER HIGH LOW

1999 First 2.375 0.00
1999 Second 2.5625 1.0313
1999 Third 3.875 2.1875
1999 Fourth 3.5625 2.1875
2000 First (through 2/29/00) 2.8125 1.25
- ---- ------------------------- ------ ------

The above quotations reflect the inter-dealer prices without retail
mark-up, mark-down or commissions and may not represent actual transactions.

(b) HOLDERS.
--------
As of March 31, 2000, there were 384 record holders of
Meridian's Common Stock. Based on information from brokers and other sources,
Meridian estimates that as of March 31, 2000 there were approximately 604
beneficial holders of Meridian's Common Stock.

(c) DIVIDENDS.
---------
Meridian paid no cash dividends with respect to its Common
Stock during 1999 and has no current intention to pay any cash dividend.
Meridian declared and distributed a 10% stock dividend to all shareholders
of record of Common Stock on September 30, 1999.

ITEM 2. LEGAL PROCEEDINGS.

Meridian is not a party to any lawsuit, litigation, or regulatory
proceeding of any kind, filed, pending or threatened.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

In August 1999, at the Annual Meeting of Shareholders, the
shareholders elected the present Board of Directors for a term of one (1) year,
approved Meridian's 1999 Incentive Stock Option Plan and approved a 10% stock
dividend to shareholders of record on September 30, 1999.

ITEM 5. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Meridian has no information to report with respect to Section 16(A)
Of the Exchange Act.

ITEM 6. REPORTS ON FORM 8-K

None.
21

PART F/S
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY

Independent Auditors' Report F-2

Consolidated Balance Sheet F-3

Consolidated Statement of Operations F-4

Consolidated Statement of Stockholders'
Equity (Deficit) F-5

Consolidated Statement of Cash Flows F-6

Notes to Consolidated Financial Statements F-7-F-11

F-1

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Meridian USA Holdings, Inc.

We have audited the accompanying consolidated balance sheet of Meridian USA
Holdings, Inc. and subsidiary as of December 31,1999, and the related statements
of operations, stockholders' deficit and cash flows for the years ended December
31, 1999 and December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement

presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meridian USA Holdings, Inc. and
subsidiary, for the years ended December 31, 1999 and December 31, 1998 and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

/S/ Feldman Sherb Horowitz & Co., P.C.
Feldman Sherb Horowitz & Co., P.C.
Certified Public Accountants

New York, New York
March 30, 2000

F-2

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY
------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
DECEMBER 31, 1999
-----------------

ASSETS
------

Current assets:

Cash $ 67,699
Accounts receivable, net 43,293
Inventory 47,184
Advances - stockholders 99,000
------
Total current assets 257,176

Property and equipment, net 8,442

Licensing agreement, net 170,133
-------
$435,751
========

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:

Accounts payable $ 152,350
Accrued expenses and other current liabilities 341,745
-------
Total current liabilities 494,095
-------
Commitments and contingencies 0

Stockholders' deficit:
Convertible preferred stock, par value $1.00 - authorized
1,000,000 shares, 3,500 shares issued and outstanding 3,500
Common stock, par value $.001 - authorized 20,000,000 shares,
issued and outstanding 5,736,500 5,737
Additional paid-in capital 2,173,679
Accumulated deficit -2,241,260
----------
(58,344)
-------
$ 435,751
=========

See notes to consolidated financial statements
F-3

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY
------------------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------

Year Ended December 31,
1999 1998

Net sales $ 395,980 $ 144,206

Cost of goods sold 268,654 105,916
------- -------
Gross profit 127,326 38,290

Selling, general and administrative 1,144,590 205,286
--------- -------
Net loss $ (1,017,264) $ (166,996)
========= ==========
Net loss per common share - basic and
assuming dilution $ (0.20) $ (0.04)
========= ==========
Weighted average number of
common shares outstanding 5,210,546 4,088,517
========= ==========

See notes to consolidated financial statements
F-4

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY
- -----------------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
- --------------------------------------------------------

Common Stock Convertible Preferred Additional Total
Stock Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Equity (Deficit)

Balance, December 31, 1997 439,056 $ 439 0 $ 0 $ 628,120 $ -535,500 $ 93,059
Issuance of common stock
for services 330,000 330 0 0 0 0 330
Issuance of common stock 2,000 2 0 0 1,998 0 2,000
Issuance of common
stock purchase warrants 0 0 0 0 850 0 850
Net loss 0 0 0 0 0 (166,996) (166,996)
-------- ----- ------ -------- -------- ---------- --------
Balance, December 31, 1998 771,056 771 0 0 630,968 (702,496) (70,757)

Issuance of
convertible preferred
stock from reverse merger 0 0 3,500 3,500 0 0 3,500
Issuance of common stock
from reverse merger 3,026,794 3,027 0 0 0 0 3,027
Issuance of common stock 47,150 47 0 0 47,103 0 47,150
Exercise of common
stock purchase warrants 850,000 850 0 0 849,150 0 850,000
Issuance of common stock
related to reverse acquisition 620,000 620 0 0 (620) 0 0
Stock dividend 521,500 522 0 0 520,978 (521,500) 0
Repurchase of common stock (100,000) (100) 0 0 (49,900) 0 (50,000)
Issuance of warrants for
license agreement 0 0 0 0 176,000 0 176,000
Net loss 0 0 0 0 0(1,017,264)(1,017,264)
--------- ----- ----- ------ -------- ---------- ---------
Balance, December 31, 1999 5,736,500 $ 5,737 3,500 $ 3,500 $ 2,173,679(2,241,260) (58,344)
========= ======= ====== ====== ========== ========= =========

See notes to consolidated financial statements
F-5

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY
------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,
----------------------
1999 1998
---- ----

Cash flows from operating activities:
Net loss $ -1,017,264 $-166,996
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 14,198 8,079

Changes in current assets and liabilities:
Increase in accounts receivable -29,054 -4,542
Increase in inventory -47,184 0
Decrease in other assets 3,001 -1,479
Increase in accounts payable 73,191 53,698
Increase in accrued expenses and other current liabilities 336,403 -5,225
------- -------
Net cash used in operating activities -666,709 -116,465
-------- ---------
Cash flows from investing activities:
Capital expenditures 0 -2,015
-------- -------
Net cash used in investing activities 0 -2,015
--------- -------
Cash flows from financing activities:
Loan payable - stockholders -50,000 50,000
Advances to stockholders -99,000 0
Repurchase of common stock -50,000 0
Proceeds from sale of stock and exercise of warrants 897,150 101,106
------- -------
Net cash provided by financing activities 698,150 151,106
------- -------
Net increase in cash 31,441 32,626

Cash, beginning of year 36,258 3,632
------ -----
Cash, end of year $ 67,699 $ 36,258
========= =========

Supplemental Disclosure of Cash Flow Information:
Cash paid during the year:
Interest expense $ 0 1,890
========= =======
Income taxes $ 0 0
========= =======

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Issuance of common stock and convertible preferred stock
in reverse merger $ 3,377 $ 3,377
========= =======
Issuance of common stock related to reverse merger $ 620 $ 0
========= =======
Issuance of warrants for licensing agreement $ 176,000 $ 0
========= =======

See notes to consolidated financial statements
F-6

MERIDIAN USA HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------

1. ORGANIZATION:
-------------

The Old Fashioned Syrup Company, Inc. ("Old Fashioned"), a Florida corporation,
was formed in November 1996 for the purpose of developing sugar-free, fat-free,
cholesterol-free chocolate-flavored syrup to market and sell principally to
retailers and food service customers located throughout the United States. The
Old Fashioned Egg Cream Company and The Original Egg Cream Company, both
subsidiaries of Old Fashioned, were incorporated in 1993 in the state of
Florida.

During January 1999, Old Fashioned was acquired by Meridian USA Holdings, Inc.
("Meridian" or the"Company"), a Florida corporation, for 3,026,794 shares of
Meridian common stock and 3,500 shares of its Series I Convertible Preferred
Stock (the "Exchange") for all of the shares of Old Fashioned and its
subsidiaries. The Exchange has been accounted for as a reverse acquisition
under the purchase method for business combinations. Accordingly, the
combination of the two companies is recorded as a recapitalization of Old
Fashioned, pursuant to which Old Fashioned is treated as the continuing entity.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its subsidiary. All material
intercompany transactions have been eliminated.

B. ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

C. CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less
when purchased, to be cash equivalents.

D. REVENUE RECOGNITION - Revenues are recognized as products are
received by customers.

E. INVENTORIES - Inventories are stated at lower of cost or market on

the first-in, first-out method of inventory valuation.

F. PROPERTY AND EQUIPMENT - Property and equipment is stated at cost.
Depreciation of property and equipment is computed using the straight-line
method over the estimated useful lives of the assets.

F-7

G. CONCENTRATION OF RISK - Credit losses, if any, have been provided
for in the financial statements and are based on management's expectations. The
Company's accounts receivable are subject to potential concentrations of credit
risk. The Company does not believe that it is subject to any unusual or
significant risks, in the normal course of business.

H. INCOME TAXES - Income taxes are accounted for under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," which is
an asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's financial statements or tax returns.

I. NET LOSS PER SHARE - Basic earnings per share has been calculated
based upon the weighted average number of common shares outstanding. Stock
options have been excluded as common stock equivalents in the diluted earnings
per share because they are either antidilutive, or their effect is not material.

J. FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts reported
in the balance sheet for cash, receivables, accounts payable and accrued
expenses approximate fair value based on the short-term maturity of these
instruments.

K. LICENSING AGREEMENT - The licensing agreement is amortized on a
straight-line basis over ten years.

L. IMPAIRMENT OF LONG-LIVED ASSETS - The Company reviews long-lived
assets for impairment whenever circumstances and situations change such that
there is an indication that the carrying amounts may not be recovered. At
December 31, 1999, the Company believes that there has been no impairment of its
long-lived assets.

3. RELATED PARTY TRANSACTIONS
----------------------------

As of December 31, 1999 the Company has a receivable of $99,000 due from
two officers of the Company. Such advances are short-term in nature and does
not bear interest.

4. PROPERTY AND EQUIPMENT
------------------------

Property and equipment consisted of the following:

December 31,
------------
1999 1998
--------- -------

Carts 5 Years $ 62,500 $62,500
Office Furniture and Equipment 5 Years 18,096 18,096
Vehicles 5 Years 2,800 2,800
--------- -------
83,396 83,396
Less: accumulated depreciation (74,954) (66,623)
--------- --------
$ 8,442 $16,773
========= =======

F-8

5. LICENSING AGREEMENT
--------------------

The Company entered into a ten year license agreement, effective January
20, 1999, and as amended in October 1999, with Cumberland Packing Corp.
("Cumberland"), a New York corporation, for the right to use their "Sweet 'N
Low" Trademark in order to market the Company's sugar-free, fat-free,
cholesterol-free chocolate flavored syrup product. Licensing agreement as
of December 31, 1999 is as follows:

Useful Life December 31, 1999
----------- -----------------

Licensing Agreement 10 years $176,000
Less: accumulated amortization 5,867
--------
$170,133
========

The license agreement bears minimum royalty payments of $30,000 in year ending
December 31, 2000 and increases in increments of $10,000 per annum throughout
the term of the agreement.

6. STOCKHOLDERS' DEFICIT

On July 31, 1998, the Company entered into a one year consulting agreement
with a brokerage firm and, as compensation for services, granted a three year
option to purchase 25,944 shares of the Company's common stock at an exercise
price of $.25. The Company granted to the brokerage firm one time registration
rights and unlimited "piggyback" registration rights to the underlying common
stock shares of these three year options.

In April 1999, the Company completed a self underwritten Regulation "D"
Rule 504 Offering of 49,150 shares of common stock, at the price of
$1.00 per share, and 850,000 Common Stock Purchase Warrants ("Warrants"), at a
price of $.001 per warrant. As of December 31, 1999, all of the holders' of the
warrants had converted to common stock at a conversion price of $1.00 per share.

During January 1999, in connection with the reverse merger, the Company
issued 620,000 shares of common stock of which 300,000 shares was issued to a
stockholder who acted as advisor, 300,000 shares were issued to a member of the
Board of Directors and the remaining balance of 20,000 shares was issued to
former officers of Meridian. The common stock was valued at $.001 per share on
the dates of issuance and had been recorded as additional paid-in capital.

On August 18, 1999, the Board of Directors declared a 10% stock dividend to
be payable to all stockholders of record as of September 30, 1999 and the
521,500 shares of common stock were valued at $1.00 per share on the date of
declaration. The stock dividend was distributed on October 15, 1999.

In September 1999, in connection with the Cumberland agreement, the Company
has granted warrants to purchase 385,000 (increase from 350,000 shares as a
result of the 10% stock dividend) shares of the Company's common stock at an

F-9

exercise price equal to the greater of $2.50 per share or 50% of the average
trading price for the Company's shares during the twenty days prior to the
exercise of the warrants. The warrants expire on December 31, 2008 and
management has estimated the value of the warrants, based on the Black-Scholes
option pricing model, in order to record $176,000 of deferred licensing
cost. The deferred licensing cost is being amortized on a straight-line
basis over ten years from the date the warrants were granted. Amortization
expense charged to operations for the year ended December 31, 1999 was
approximately $5,900.

7. CONVERTIBLE PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of preferred stock at
.001 par value, the terms of which may be determined at the time of issuance by
the Board of Directors without further action by the shareholders. As of
December 31, 1999, 3,500 shares of convertible preferred stock were issued and
outstanding. Each share of Preferred Stock is convertible into 300 shares of
Common Stock.

8. STOCK OPTION PLAN

In August 1999 the Company's stockholders approved the adoption of an
Incentive Stock Option Plan ("1999 Option Plan") which allows the Board of
Directors to grant options to employees and members of the Board of Directors.
The 1999 Option Plan provides the Board of Directors the right to grant options
to purchase up to a total of 100,000 share of the Company's common stock. As
of December 31, 1999 no options have been granted.

9. INCOME TAXES

The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS
109 requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
from tax loss and tax credit carryforwards. SFAS 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of realization
of deferred tax assets.

The provision (benefit) for income taxes differs from the amounts computed
by applying the statutory federal income tax rate to income (loss) before
provision for income taxes is as follows:

December 31, 1999 December 31, 1998
----------------- -----------------

Taxes benefit computed at statutory rate $(429,000) $(260,000)
Losses for which no tax benefit realized 429,000 260,000
--------- -----------
Net income tax benefit $ - $ -
========== ==========

F-10

The Company has a net operating loss carryforward for tax purposes totaling
approximately $1,071,000 at December 31, 1999 expiring in the year 2019.

Listed below are the tax effects of the items related to the Company's net tax
liability:

December 31, 1999
-----------------

Tax benefit of net operating loss carryforward $ 429,000
Valuation Allowance (429,000)
----------
Net deferred tax asset recorded $ -
==========

10. COMMITMENTS

Operating Leases -
----------------
The Company has an operating lease for office space
that expires in 2004. The future minimum lease payments
are as follows:

December 31,

2000 $19,284
2001 19,284
2002 19,284
2003 19,284
2004 3,214
80,350
=============

11. SUBSEQUENT EVENT

During the period from January 1, 2000 through March 30, 2000, the Company
received an additional $427,500 from the sale of shares of stock in private
transactions not involving a public offering and from additional capital
contributions.

F-11

PART III

ITEM 1. INDEX TO EXHIBITS

(10.1) Employment Agreement between the Company and Mark Streisfeld
dated January 2000.

(10.2) Employment Agreement between the Company and Alan Posner
dated January 2000.

(10.3) Employment Agreement between the Company and Steve Kreuscher
dated March 15, 2000.

ITEM 2. DESCRIPTION OF EXHIBITS.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized on the 30th day of March, 2000.

MERIDIAN USA HOLDINGS, INC.

By: /s/ Mark Streisfeld
---------------------
Mark Streisfeld, President
and Director

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the 30th day of March, 2000.

Principal Executive Officer:

/s/ Mark Streisfeld
- ----------------------
Mark Streisfeld President and Director

Principal Financial Officer and
Principal Accounting Officer:

/s/ Alan Posner Secretary, Chief
- ------------------
Alan Posner Executive Officer
and Director

/s/ Paul M. Galant Director
- ----------------------
Paul M. Galant

/s/ Ronald Shapss Director
- --------------------
Ronald Shapss

/s/ Joel Flig Director
- ----------------
Joel Flig