SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Meridian Holdings, Inc.
(Registrant)
Date: October 1, 2007 By:/s/ Anthony C. Dike
-------------------------
Anthony C. Dike
(Chairman of the Board)
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1
Exhibit 16.1
Press Release
On September 28, 2007, Meridian Holdings, Inc, and its management were
notified by its counsel that the United States Securities and Exchange
Commission, intends to file an enforcement action against Meridian and its
management in the federal court for fraud, in respect of, amongst other things,
the booking of $30,000,000 judgment receivable against Sirius Technology of
America, and Mr. Glenn Crowe in the second and third quarters of 2004 and
the subsequent write down of such receivable to its then-net collectible
value of $350,000 in the fourth quarter ended December 31, 2004.
Meridian had recognized this judgment as an unconditional, legal payment
obligation of the third-party judgment debtors after Meridian had waited
for the statutory period for the expiration of the appeals period, in
consultation with its certain of its professional advisors and its independent
public accounting firm.
Meridian's management had consulted with its independent public
accounting firm with respect to the issue of gain contingency in recording the
judgment receivable in the manner reflected on its financial statements. Because
the collectability of the judgment was Probable, revenue could be then
recognized as such. However, SEC staff accountants subsequently disagreed with
Meridian's position.
The Company has been cooperating with SEC in this matter, and has since
filed all the necessary amendments to the filings involved with this judgment
receivable as of the end of 2005.
In addition, the Company has changed its accounting policies and
procedures with respect to judgment receivable revenue recognition to reflect
SEC accounting staff view in this matter.
As was earlier disclosed in our previous SEC filings, on or about July
of 2001, Meridian acquired all the assets of Sirius Computerized Technology of
Israel and those of its United States Subsidiary "Sirius Technology of America"
from an Israeli Bankruptcy court for $10,000,000.
The assets acquired comprised of the computer software technology
Commonly known as "MedMaster", including the sub-systems and source codes,
belonging to Sirius Computerized Technology of Israel and all the various
contracts and account receivables of Sirius Technology of America with an
estimated value of over $30,000,000.
The following were the list of customers of Sirius Technology of America
vis a vis Sirius Computerized Technology of Israel acquired by Meridian as part
of the consideration:
1. Lockheed Martins Systems division, which had over $18,000,000 contract
with UHS in New York state, to implement the MedMaster Software in their
facility.
2. Waterbury Community Hospital in Waterbury Connecticut, which acquired the
license to use the Medmaster Software in their hospital facilities for
over $3,500,000
3. Armstrong County Community Hospital in kittanning Pittsburgh, which had
licensed the Medmaster software for a DOD pilot integrated healthcare
project for over $500,000.
4. EDS which acquired a MedMaster software component for over $3,000,000
5. Tenet Health Systems which had licensed the MedMaster software for initial
implementation in the USC University hospital upon completion of the
customization of the MedMaster Software to TENETS specification, and to
subsequently deploy the technology in over 40 Tenets small to medium size
hospitals and clinics, with an estimated value based on the initial
licensing fee and implementation cost for the first hospital of
approximately $1,000,000 per hospital facility and an aggregate of over
$40,000,000 upon complete roll-out of the software Technology in all the 40
or more hospitals and medical facilities then owned and operated by TENET.
Sometime in December 2001, Meridian through its subsidiary Corsys Group
in Israel and InterCare DX (an affiliate based in USA) completed the
customization of the MedMaster Software for TENET and deployed the technology
at the first TENET hospital (The USC University Hospital in Los Angeles), and
was preparing to deploy the technology in the second TENET Hospital, when
Meridian was sued by Silicon Valley Bank in the Los Angeles County Superior
Court claiming that the TENET contracts and receivables were assigned to them
by Sirius Technology of America, as a collateral for a Corporate loan in the
amount of $650,000.
Silicon Valley Bank was then seeking for all the proceeds from the
TENET contract be turned over to them by Meridian et al, Meridian refused and
defended this lawsuit vigorously, and was able to obtain a relieve from the
Los Angeles County Superior Court.
Early in 2002, Meridian was notified by Lockheed Martins Systems
Division that it has obtained a Judgment from an Atlanta Georgia Court, against
Sirius Computerized Technology of Israel , Sirius Technology of America and Mr.
Glen Crowe in the amount of over $10,000,000, and has subsequently seized the
assets of Sirius Computerized Technology of Israel which includes the MedMaster
Software, including all the subsystems and source code placed in Escrow, with an
Escrow Company in Atlanta, Georgia.
Meridian through the estate of Sirius Computerized Technology of Israel
obtained a court injunction against Lockheed Martin Systems Division, to return
all the seized assets to the court pending the outcome of the lawsuit then filed
by Sirius et al.
Lockheed Martin and ExcelCare filed a cross complaint against Sirius
et al, and prevailed in the lawsuit because the Israeli receiver failed to
appear in an Atlanta Georgia Court to defend the lawsuit.
As a result of this development, Lockheed Martin and ExcelCare were
awarded the assets of Sirius as a partial satisfaction of their judgments.
Upon this happening, the Israeli Receiver filed an injunction in an
Israeli Court barring Meridian from further exploitation of the MedMaster
Software technology it had acquired through the Israeli Bankruptcy Court in
continental United States, claiming that Meridian was only allowed to exploit
the technology only in Israel, contrary to the earlier representation to the
bankruptcy court in Israel by the Israeli receiver that the only market
available for the MedMaster Technology was in the United States of America
hence the recommendation to sell these assets to Meridian in the first place.
Meridian filed a rescission to purchase the asset of Sirius with the
Israeli bankruptcy court, and proceeded to file a fraud and breach of
contract Lawsuit against Sirius et al with the Los Angeles County Superior
Court in late 2002.
Also, Meridian withdrew the MedMaster Software from the US market in
compliance with the injunction filed by the Israeli receiver with the Israeli
Bankruptcy Court, and the Atlanta Georgia Court decision to award the US
based assets of Sirius et al to Lockheed Martin and ExcelCare.
Meridian also entered into a Mutual release agreement with TENET to
de-install the MedMaster Software already installed at TENET USC University
Hospital in Los Angeles, and to develop replacement software for TENET at no
additional cost to TENET, as per the terms and conditions in the original
contract signed by Meridian et al with TENET using the MedMaster Technology.
TENET agreed to enter into the agreement on the condition that Meridian
Prevails in the lawsuit it filed against Sirius Technology of American and
Mr. Glenn Crowe, since Sirius had notified TENET against any further dealings
with Meridian with respect to MedMaster Technology or Sirius original
contract with TENET which was inherited by Meridian as part of the asset
purchased by Meridian.
Sometime in October 2003 a $30,000,000 default Judgment was entered
against Sirius Technology of America and Mr. Glenn Crowe by the Los Angeles
County Superior Court in favor of Meridian.
Additionally, Meridian et al had since completed the development of
a new replacement software for TENET known as ICE(tm), as of April 2004 and
was waiting for the lawsuit against Sirius to be resolved before delivery of
the program.
The company believes that the latest action taken by SEC was
unfortunate, since it had neither the intention to defraud or mislead the
investing public based on the disclosure and footnotes in these filings, and
will continue to seek for a speedy resolution to these issues as soon as
possible.
Contact Person:
Mr. Moses Onyejekwe, Esq
Tel:213-487-7260