SecProbe.io

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Mail Stop 03-08

									June 20, 2005

Mr. Anthony C. Dike
Chairman and Chief Executive Officer
Meridian Holdings, Inc.
900 Wilshire Boulevard, Suite 500
Los Angeles, CA 90017

      RE:		   Meridian Holdings, Inc.
            	        	Form 10-KSB for Fiscal Year Ended
      December 31, 2004
      Filed May 16, 2005
	  	Form 10-QSB for Fiscal Quarter Ended
		March 31, 2005
	File No. 000-30018

Dear Mr. Dike:

	We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Where indicated, we think you should
revise your filings 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 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 any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-KSB for the year ended December 31, 2004

Consolidated Financial Statements

Consolidated Statements of Operations, page F-4
1. You indicate that you recorded a $30,687,926 judgment award in
the
second quarter of 2004.  Tell us your basis in GAAP for
recognizing
income and an asset from this gain contingency prior to the
receipt
of the cash.  Refer to paragraph 17 of SFAS 5.  Additionally, you
disclose in Note 14 that you impaired the asset for $30,337,926 in
the fourth quarter.  Explain to us why it is appropriate to
continue
to record the remaining $350,000 as a gain contingency when you
indicate that there is only a reasonable likelihood that it will
be
collected.  Tell us specifically the authoritative GAAP guidance
that
supports your position.  Additionally, you state that you will
continually test this asset for impairment in the future in
accordance with SFAS 121.  Please note that SFAS 121 was
superseded
by SFAS 144, effective for financial statements issued for fiscal
years beginning after December 15, 2001, and that neither
statement
applied or currently applies to financial instruments such as
receivables or settlements due from third parties.  Please refer
to
paragraph 5 of SFAS 144.   SFAS 144 addresses financial accounting
and reporting for the impairment of long-lived assets not "long-
term
assets."  Furthermore, if you are able to support your position
that
recording the gain and corresponding receivable was appropriate in
the second quarter, then you should evaluate the collectibility as
described in paragraphs 22 and 23 of Appendix A to SFAS 5.

Consolidated Statements of Cash Flows, page F-6
2. Your cash flow statement for the year ended December 31, 2004
does
not foot mathematically and there appears to be error(s) within
the
cash flows from operating activities section.   Please explain and
amend your filing accordingly.
3. Please explain why the change in the current portion of long-
term
debt is presented within cash flows from operating activities.
Refer
to paragraph 18 of SFAS 95.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies

Equity Method, page F-7
4. Please tell us and revise your future filings to disclose the
current ownership percentages of your investments accounted for
under
the equity method.  Additionally, tell us how you accounted for
the
losses of CGI in 2004.  It appears that you have not reflected an
adjustment of the carrying amount of your investment on your
balance
sheet or recorded your portion of the loss within the statement of
operations.  Furthermore, in light of the apparent inability of
CGI
to generate revenues or positive operating income tell us how you
determined that the fair value of your investment exceeds the
carrying value and that a loss in value of your investment has not
occurred.  Please be detailed in your response.  Refer to
paragraphs
6b, 19h and 20a of APB 18.

Note 8 - Income Taxes, page F-10
5. You indicate that your income tax provisions for both years are
not significant and therefore have been included with general and
administrative expenses.  Tell us your basis in GAAP for your
accounting and also explain in detail your materiality assessment.
Additionally, tell us why you did not address the disclosure
requirements of paragraphs 45-48 of SFAS 109.

Note 10 - Stock Option Plan, page F-11
6. You indicate that no stock option was exercised in 2004;
however,
your summary table indicates that 5,000,000 options were
exercised.
We assume this may be an inadvertent error in light of the fact
there
are no cash proceeds recorded on your statement of cash flows for
the
year ended December 31, 2004.  Additionally, your rollforward for
2004 does not foot mathematically and it appears the outstanding
amount at the beginning of 2004 does not agree to the outstanding
amount at the end of 2003.  Please explain and revise accordingly.
7. It appears that you are not using a volatility assumption to
estimate the fair value of options granted.  Please advise.  Refer
to
paragraph 19 and Appendix F of SFAS 123 for additional guidance on
calculating historical volatility.

Item 8a.  Controls and Procedures, page 13
8. We note that your certifying officers disclose their
conclusions
as to the effectiveness of your disclosure controls and procedures
"within 90 days prior to the date of this report."  However, Item
307
of Regulation S-B requires that your certifying officers disclose
their conclusions regarding the effectiveness of your disclosure
controls and procedures "as of the end of the period covered by
the
report."  Please revise your Form 10-KSB and subsequent Form 10-
QSB
accordingly.
9. You state that there were no "significant" changes in your
internal controls or in other factors that could significantly
affect
these controls "subsequent to the date of your evaluation."
However,
Item 308(c) of Regulation S-B requires that you disclose "any
change"
in your internal control over financial reporting identified in
connection with the evaluation required by paragraph (d) of
Exchange
Act Rules 13a-15 or 15d-15 that occurred "during the most recent
fiscal quarter" that has materially affected, or is reasonably
likely
to materially affect, your internal control over financial
reporting.
Revise your disclosure in your Form 10-KSB and subsequent Form 10-
QSB
accordingly.
10. Please revise your Form 10-KSB and subsequent Form 10-QSB to
reference the appropriate Rule of the Exchange Act, Rule 13a-
15(c),
not 13a-14.
11. Your principal executive and financial officers only concluded
that your disclosure controls and procedures were effective in
"timely alerting them to material information required to be
included
in the Company`s periodic filings with the Commission."  Please
also
state, if true, whether the same officers concluded the controls
and
procedures were effective in "ensur[ing] that information required
to
be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer`s
management, including its principal executive and principal
financial
officers, or persons performing similar functions, as appropriate
to
allow timely decisions regarding required disclosure."  Please
refer
to Exchange Act Rule 13a-15(e).  This comment will also require
revision to your Form 10-QSB for the fiscal quarter ended March
31,
2005.

Form 10-QSB for Fiscal Quarter Ended March 31, 2005

Consolidated Financial Statements

Consolidated Balance Sheets, page 3
12. Please explain why the reserve for incurred but not reported
claims did not change between December 31, 2004 and March 31,
2005.
We would expect the estimate to be revised at least quarterly.

Consolidated Statements of Cash Flows, page 5
13. Please explain why the change in your line of credit is
presented
within cash flows from operating activities.  Refer to paragraph
18
and 19 of SFAS 95.

Notes to Consolidated Financial Statements

Note 1 General

Revenue Recognition, page 7
14. Please revise your filing to enhance your revenue recognition
policy to discuss how you recognize risk pool and fee for service
revenues.

Management`s Discussion and Analysis

Results of Operations, page 14
15. Please revise your filing to explain the significant increase
in
fee for service revenues.  Your reference to clinic operations is
not
sufficient in this regard.  Refer to SEC Release No. 33-8350 for
guidance.
16. Please revise your filing to explain the nature and amount of
the
reclassification discussed in the Cost of Revenue section.  It is
unclear by how much the reclassification impacted the change in
cost
of revenue.

 Item 3.  Controls and Procedures, page 16
17. The date of your evaluation and also the conclusion as to the
effectiveness of your disclosure controls and procedures are not
as
of March 31, 2005.  You indicate that the evaluation occurred as
of
September 30, 2004 and you concluded that the company`s disclosure
controls and procedures were effective as of June 30, 2004.
Please
amend your Form 10-QSB and revise your controls and procedures
accordingly.

      As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please furnish a letter that keys your responses
to
our comments and provides any requested information.  Detailed
response letters greatly facilitate our review.  Please file your
response letter on EDGAR.  Please understand that we may have
additional comments after reviewing your amendments and 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
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed 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
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 filings or
in
response to our comments on your filings.

	You may contact David DiGiacomo at (202) 551-3319 if you have
questions regarding comments on the financial statements and
related
matters.  Please contact me at (202) 551-3843 with any other
questions.

                  Sincerely,

            George F. Ohsiek, Jr.
    					          Branch Chief

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Mr. Anthony Dike
Meridian Holdings, Inc.
June 20, 2005
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