MEADE INSTRUMENTS CORP, S-1/A, 1997-03-25

MEADE INSTRUMENTS CORP
S-1/A, 1997-03-25
OPTICAL INSTRUMENTS & LENSES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 25, 1997

REGISTRATION NO. 333-21123
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

MEADE INSTRUMENTS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 3827 95-2988062
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

16542 MILLIKAN AVENUE
IRVINE, CALIFORNIA 92606
(714) 756-2291
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

------------------------

JOHN C. DIEBEL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
MEADE INSTRUMENTS CORP.
16542 MILLIKAN AVENUE
IRVINE, CALIFORNIA 92606
(714) 756-2291
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

------------------------

COPIES TO:

<TABLE>
<S> <C>
J. JAY HERRON, ESQ. DHIYA EL-SADEN, ESQ.
MARK D. PETERSON, ESQ. JEFFREY B. CONNER, ESQ.
SUSANNA M. KIM, ESQ. HILARY J. HATCH, ESQ.
O'MELVENY & MYERS LLP GIBSON, DUNN & CRUTCHER LLP
610 NEWPORT CENTER DRIVE, SUITE 1700 333 SOUTH GRAND AVENUE
NEWPORT BEACH, CALIFORNIA 92660 LOS ANGELES, CALIFORNIA 90071
TELEPHONE NO. (714) 760-9600 TELEPHONE NO. (213) 229-7000
FACSIMILE NO. (714) 669-6994 FACSIMILE NO. (213) 229-7520
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, MARCH 25, 1997

PROSPECTUS
3,370,000 SHARES

[LOGO OF MEADE INSTRUMENTS CORP.]

COMMON STOCK

------------------------

Of the 3,370,000 shares of Common Stock offered hereby (the "Offering"),
2,500,000 shares are being sold by Meade Instruments Corp. ("Meade" or the
"Company"), and 870,000 shares are being sold by a stockholder of the Company
(the "Selling Stockholder"). See "Principal and Selling Stockholders." The
Company will not receive any proceeds from the sale of any shares by the Selling
Stockholder. Prior to this Offering, there has been no public market for the
Common Stock of the Company. It is currently estimated that the initial public
offering price will be between $8.00 and $10.00 per share. See "Underwriting"
for information relating to the factors considered in determining the initial
public offering price.

The Company's Common Stock has been approved for inclusion on the Nasdaq
National Market under the symbol "MEAD."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

================================================================================

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
DISCOUNTS AND PROCEEDS TO SELLING
PRICE TO PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDER
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Per Share......................... $ $ $ $
- ------------------------------------------------------------------------------------------------------
Total(3).......................... $ $ $ $
======================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

(2) Before deducting expenses estimated to be $ payable by the Company,
a portion of which may be reimbursed by the Selling Stockholder. See
"Certain Transactions."

(3) The Company and the Selling Stockholder have granted to the Underwriters a
30-day option from the date of this Prospectus to purchase up to 505,500
additional shares of Common Stock (of which the first 130,000 shares will be
sold by the Selling Stockholder and the remaining 375,500 shares will be
sold by the Company) on the same terms and conditions as set forth above,
solely to cover over-allotments, if any. If such option is exercised in
full, the total Price to Public, Underwriting Discounts and Commissions,
Proceeds to Company and Proceeds to Selling Stockholder will be $ ,
$ , $ and $ , respectively. See "Principal and
Selling Stockholders" and "Underwriting."

------------------------

The Common Stock is offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by the Underwriters, subject to
their right to withdraw, cancel, modify, or reject orders in whole or in part,
and subject to other conditions. It is expected that delivery of the shares of
Common Stock offered hereby will be made on or about , 1997.

MORGAN KEEGAN & COMPANY, INC. CROWELL, WEEDON & CO.

THE DATE OF THIS PROSPECTUS IS , 1997

<PAGE> 3

[PICTURES]

[THREE PAGES OF PHOTOGRAPHS OF MEADE PRODUCTS AND VARIOUS ASTROPHOTOGRAPHS
AND IMAGES TAKEN WITH MEADE PRODUCTS.]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING BY ENTERING STABILIZING BIDS OR EFFECTING SYNDICATE COVERING
TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET
MAKING TRANSACTIONS IN THE COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE 103 OF
REGULATION M. SEE "UNDERWRITING."

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to and
should be read in conjunction with the more detailed information and the
Financial Statements and Notes thereto appearing elsewhere in this Prospectus.
Unless otherwise indicated, the information in this Prospectus (i) assumes an
initial public offering price of $9.00 per share of Common Stock, (ii) does not
give effect to the exercise of the over-allotment option granted to the
Underwriters as described in "Underwriting," (iii) except in the Financial
Statements and Notes thereto, reflects the conversion of all outstanding Series
A Common Stock and Series B Common Stock into Common Stock upon the closing of
this Offering and (iv) gives effect to the reincorporation of the Company as a
Delaware corporation to be named Meade Instruments Corp. See "Description of
Capital Stock -- Reincorporation." As used herein, the terms "Meade" and the
"Company" refer to such Delaware corporation and its predecessor.

THE COMPANY

Meade is a leading designer and distributor of telescopes and accessories
for the beginning to serious amateur astronomer. Meade has successfully
introduced a wide range of new products, resulting in what the Company believes
to be the broadest and most complete line of telescopes available. Based on the
foregoing and feedback received from customers, management believes that Meade
is recognized for its expertise in telescope innovation and the high quality of
its products. The Company offers more than 40 different telescope models with
several different optical configurations, as well as more than 250 accessory
products. The Company's telescopes range in aperture from 2 to 16 inches and in
retail price from less than $100 to $15,000.

Since its founding in 1972, Meade has strived to develop a reputation for
providing the amateur astronomer with technically sophisticated products at
competitive prices. Meade manufactures the complete line of its advanced
astronomical telescopes in Irvine, California, including the production of the
optical systems, which are critical components of telescopes. Combining its
manufacturing expertise with its dedication to innovation, quality and value,
Meade has developed and produced some of the industry's most technologically
advanced consumer telescopes at affordable prices. Although professional and
institutional applications of Meade's telescopes are not Meade's primary market,
the Company's 8-inch and 10-inch Schmidt-Cassegrain telescopes are used by many
universities, scientific laboratories and aerospace companies, including the
University of California, Los Alamos National Laboratory, Lawrence Livermore
Laboratory, National Radio Astronomy Observatory and NASA/Aames Research. The
Company has capitalized on its brand name recognition among serious amateur
astronomers to market successfully its less-expensive telescopes to beginning
and intermediate amateur astronomers. Meade has become a major supplier of
telescopes to such retailers as The Nature Company, Service Merchandise, Natural
Wonders, Wal-Mart, J.C. Penney and Discovery Channel Stores. To complement its
extensive line of telescopes and leverage its distribution system, the Company
has recently introduced a complete line of binoculars to be sold under the Meade
brand name.

Meade was sold by its founder and current Chief Executive Officer to a
private investor in 1986 and was then reacquired by the Company's current senior
management in 1991. After reacquisition, management reemphasized the importance
of research and development for new products and product enhancements. Recently,
one of Meade's newest products, the ETX Astro Telescope, was referred to on the
cover of the January 1997 issue of Sky and Telescope as the "hottest scope
ever." Meade also significantly broadened the Company's less-expensive telescope
line and has an exclusive arrangement with a Taiwanese company to manufacture
substantially all of the Company's less-expensive telescopes in accordance with
the Company's proprietary designs. Meade also has increased the marketing of its
products by aggressively advertising in periodicals directed to amateur
astronomers and by providing greater support to the Company's dealers, specialty
retailers, foreign distributors, mass merchandisers, and end users of Meade's
products. Additionally, Meade publishes a comprehensive, full-color, high
quality product catalogue which provides significant product exposure.

3
<PAGE> 5

locations. The Company also sells certain of its telescope models to selected
national mail order dealers. Meade sells its products internationally through a
network of approximately 30 foreign distributors, many of which service retail
locations in their respective countries. International sales accounted for
approximately 17% of the Company's net sales for the nine months ended November
30, 1996. See "Note 11 to the Financial Statements."

Meade's net sales have increased from $10.1 million for the fiscal year
ended February 28, 1992 to $29.8 million for the fiscal year ended February 29,
1996. During the same period, operating income increased from $437,000 to $3.7
million before certain charges of $300,000. For the nine months ended November
30, 1996, Meade generated net sales of $39.0 million and operating income of
$5.3 million before certain charges of $340,000 and before a non-recurring
Employee Stock Ownership Plan (the "ESOP") contribution consisting of a $995,000
dividend, compared to $23.5 million and $3.1 million, respectively, for the nine
months ended November 30, 1995. These represent increases in net sales of 66.1%
and operating income before certain charges and before the non-recurring ESOP
contribution of 69.9% for the nine month periods. See "Selected Financial
Information." The Company intends to continue to pursue an integrated strategy
of product line expansion, aggressive marketing, expansion into the binocular
market and expansion of the Company's distribution network.

The Company was incorporated in California on December 19, 1975 and, prior
to the effectiveness of the Registration Statement of which this Prospectus is a
part, the Company will reincorporate as a Delaware corporation to be named Meade
Instruments Corp. See "Description of Capital Stock -- Reincorporation." The
principal offices of the Company are located at 16542 Millikan Avenue, Irvine,
California 92606, and its telephone number at that location is (714) 756-2291.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.......... 2,500,000 shares
Common Stock offered by the Selling
Stockholder................................ 870,000 shares
Common Stock to be outstanding after the
Offering: ................................. 7,500,000 shares
Use of proceeds.............................. Net proceeds to the Company will be used (i)
to redeem for approximately $6.9 million all
of the outstanding shares of the Company's
Redeemable Preferred Stock owned by the
Selling Stockholder, (ii) to repay
approximately $8.2 million of term
indebtedness and (iii) for general working
capital purposes.
Proposed Nasdaq National Market symbol....... MEAD
</TABLE>

4
<PAGE> 6

SUMMARY FINANCIAL DATA

(IN THOUSANDS, EXCEPT PER SHARE AND WEIGHTED AVERAGE SHARE AMOUNTS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
NOVEMBER 30,
FISCAL YEAR ENDED FEBRUARY 28(29), ----------------------------------------
------------------------------------------------------------- PRO FORMA(1)
1992 1993 1994 1995 1996 1995 1996 1996
----------- ----------- --------- --------- --------- ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............. $ 10,149 $ 13,887 $ 16,628 $ 24,934 $ 29,770 $ 23,459 $ 38,966 $ 38,966
Gross profit.......... 2,764 3,047 4,958 7,894 9,716 7,632 12,699 12,699
Selling expenses...... 983 1,438 1,565 2,035 2,832 2,158 3,555 3,555
General and
administrative
expenses............ 1,059 986 1,378 2,118 2,651 1,966 2,664 2,664
Research and
development
expenses............ 320 274 425 423 518 396 444 444
ESOP
contribution(2)..... -- -- -- -- -- -- 1,745 750
Certain charges(3).... -- -- -- -- 300 -- 340 340
Operating income(4)... 437 412 1,643 3,318 3,415 3,112 3,951 4,946
Interest expense...... 329 395 493 470 659 496 1,253 344
Income before income
taxes............... 108 17 1,150 2,848 2,756 2,616 2,698 4,602
Net income............ 107 16 1,040 2,051 1,556 1,439 1,565 2,692
Accretion on
Redeemable Preferred
Stock............... -- -- -- -- -- -- (541)(5) --
Redemption of
Redeemable Preferred
Stock............... -- -- -- -- -- -- -- (3,500)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)
available to common
stockholders........ $ 107 $ 16 $ 1,040 $ 2,051 $ 1,556 $ 1,439 $ 1,024 $ (808)
========== ========== ========== ========== ========== ========== ========== ==========
Per share information:
Net income before
adjustments to net
income available
per common
share............. 0.02 0.00 0.22 0.44 0.33 0.31 0.43 0.45
Accretion on
Redeemable
Preferred Stock... -- -- -- -- -- -- (0.15) --
Redemption of
Redeemable
Preferred Stock... -- -- -- -- -- -- -- (0.58)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)
available per
common share...... $ 0.02 $ 0.00 $ 0.22 $ 0.44 $ 0.33 $ 0.31 $ 0.28 $ (0.13)
========== ========== ========== ========== ========== ========== ========== ==========
Weighted average
common shares
outstanding......... 4,682,472 4,682,472 4,682,472 4,682,472 4,682,472 4,682,472 3,608,335 5,999,040
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>

- ---------------

(1) Pro forma amounts are adjusted to reflect (i) the sale by the Company of
2,500,000 shares of Common Stock offered at an assumed Offering price of
$9.00, (ii) the application of net proceeds therefrom (see "Use of
Proceeds") as if the Offering had been consummated on March 1, 1996 and
(iii) the effect of the April 23, 1996 recapitalization transactions
retroactively applied to March 1, 1996. See "Certain Transactions." Pro
forma income before income taxes reflects reduced interest expense on $9.5
million of term debt assumed to be repaid with proceeds of the Offering and
the average revolver balance assumed to be repaid with the proceeds of the
Offering, net of tax effect. By assuming the Offering was effective at the
beginning of the period, both the Accretion on Redeemable Preferred Stock
and the non-recurring portion of ESOP contribution (consisting of a dividend
on the Series B Common Stock) are eliminated on a pro forma basis. The pro
forma Redemption of Redeemable Preferred Stock represents the difference
between the carrying value ($2.5 million) and the redemption value ($6.0
million) at the beginning of the period and is a non-recurring item that is
charged to retained earnings. The amount of this difference reduces Net
income (loss) available to common stockholders.

(2) ESOP contributions of $1.7 million for the nine months ended November 30,
1996 represent (i) contributions of $750,000 accrued for the period based on
an expected Company contribution of $1.0 million for the fiscal year ending
February 28, 1997 and (ii) dividends of $995,000 declared and paid on the
Series B Common Stock. The dividends paid are treated as an ESOP
contribution as the dividends are used to repay the principal balance of a
loan payable by the ESOP to the Company. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

(3) Certain charges for the fiscal year ended February 29, 1996 consist of
one-time contractual bonuses accrued on behalf of certain officers in
connection with the Company's formation of the ESOP and the related
recapitalization effected in April 1996. Certain charges for the nine months
ended November 30, 1996 consist of one-time contractual bonuses accrued on
behalf of certain members of senior management as set forth in the
Securities Purchase Agreement, dated April 23, 1996, between the Company and
Churchill ESOP Capital Partners, A Minnesota Limited Partnership.

(4) Operating income before certain charges and before the non-recurring portion
of ESOP contribution consisting of a $995,000 dividend for the year ended
February 29, 1996 and for the nine months ended November 30, 1996 was $3.7
million and $5.3 million, respectively. The Company's management believes
that operating income before certain charges and before the non-recurring
portion of ESOP contribution is an important measure for year-to-year
comparisons because it eliminates the effect of one-time unusual charges.
This measure of operating income is not provided for under generally
accepted accounting principles.

(5) Represents accretion reflecting original issue discount and accrued
dividends on the Redeemable Preferred Stock.

5
<PAGE> 7

<TABLE>
<CAPTION>
NOVEMBER 30, 1996
------------------------------
ACTUAL AS ADJUSTED(1)
----------- --------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:

Working capital.......................................................... $ 7,124 $ 13,598
Total assets............................................................. 27,447 27,447
Total current liabilities................................................ 17,556 11,082
Long-term debt, net of current portion................................... 7,124 --
Redeemable Preferred Stock............................................... 3,041 --
Stockholders' equity (deficit)........................................... (950) 15,689
</TABLE>

- ---------------

(1) As adjusted to reflect the sale by the Company of the 2,500,000 shares of
Common Stock offered at an assumed Offering price of $9.00 and the
application of the net proceeds therefrom as set forth herein. See "Use of
Proceeds" and "Capitalization."

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<PAGE> 8

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Stock offered hereby. This Prospectus
contains forward-looking statements which involve risks and uncertainties. The
Company's actual results of operations could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in the following risk factors and elsewhere in this
Prospectus.

Economic Conditions; Ability to Grow. The Company's business is subject to
economic cycles and changing consumer trends. Purchases of telescopes and other
discretionary spending with respect to leisure activities tend to decline in
periods of economic uncertainty. Any significant decline in general economic
conditions or uncertainties regarding future economic prospects that affect
consumer spending could have a material adverse effect on the Company. Any
general decline in the size of the telescope market or in a segment of the
telescope market in which the Company competes, whether from general economic
conditions, a decrease in the popularity of telescopes or otherwise, could have
a material adverse effect on the Company. See "Business -- Industry Overview."

Dependence on Technological Advancements and New Product
Introductions. The telescope market, in recent years, has been characterized by
technological advances and new product introductions. The Company believes that
the development and introduction of new, innovative telescope products and
accessories with features that respond to changing consumer demands and trends
will be critical to its future success. In the past, the Company generally has
been successful in the introduction of its telescope products and accessories.
No assurance can be given, however, that the Company will be able to continue to
design and manufacture products that will achieve commercial success. In
addition, prior successful designs for various telescope models may be rendered
obsolete within a relatively short period of time as new products are introduced
into the market. See "Business -- Products."

Uncertain Market for New Binocular Line. Recently, Meade has introduced a
line of binoculars, which it believes will complement its extensive line of
telescopes. The Company plans to access its current distribution network for
telescopes as a means to market its line of binoculars. Although the Company
believes it will be able to integrate the Company's new line of binoculars
smoothly with its existing product lines, the Company's experience in selling
binoculars is limited, and there can be no assurance that the Company will be
able to penetrate the binocular market and achieve meaningful sales. If the
Company is unable to successfully market this new binocular line, such inability
may have a material adverse affect on the Company's future growth. See
"Business -- Growth Strategy" and "-- Products."

Quarterly Fluctuations and Seasonality. The Company's quarterly and annual
operating results are affected by a wide variety of factors that could
materially and adversely affect net sales, gross margins and profitability.
These factors include the volume and timing of orders received, changes in the
mix of products sold, market acceptance of the Company's products, competitive
pricing pressures, the Company's ability to meet increasing demand and delivery
schedules, the timing and extent of research and development expenses, and the
timing and extent of product development costs. Accordingly, the Company may
experience material adverse fluctuations in future operating results on a
quarterly or annual basis. Such fluctuations in operating results could cause
the price of the Common Stock to fluctuate substantially. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Seasonality and Quarterly Results of Operations." A substantial
portion of the Company's net sales and operating income typically occurs in the
third quarter of the Company's fiscal year primarily due to disproportionately
higher customer demand for less-expensive telescopes during the Christmas
holiday season. Mass merchandisers purchase a considerable amount of inventory
to satisfy this seasonal consumer demand; however, their estimates of product
demand for the Christmas holiday season may exceed actual product demand. The
Company has, in certain circumstances, allowed these mass merchandisers to
return their excess inventory to the Company. Any such accommodations in the
future could have a material adverse effect on the Company.

Dependence on Key Taiwanese Manufacturer. Most of Meade's less-expensive
telescopes are manufactured exclusively for Meade in Taiwan. Since 1990, Meade
has worked closely with the Weidy Optical Co.,

7
<PAGE> 9

Ltd., a Taiwanese company (the "Taiwanese Factory"), developing proprietary
telescope designs and instructing the Taiwanese Factory's personnel in the
production of telescopes that meet the Company's quality standards. In January
1995, in order to assure a more reliable flow of products to meet Meade's
increasing requirements, Meade and the Taiwanese Factory entered into a supply
agreement wherein the Taiwanese Factory agreed to manufacture telescopes
exclusively for Meade, and Meade agreed to buy essentially all of its
less-expensive telescopes from the Taiwanese Factory. For the fiscal year ended
February 29, 1996, the percentage of the Company's net sales and percentage of
telescopes shipped represented by the telescopes manufactured by the Taiwanese
Factory were 44% and 92%, respectively. For the nine months ended November 30,
1996, the percentage of the Company's net sales and percentage of telescopes
shipped represented by the telescopes manufactured by the Taiwanese Factory were
53% and 90%, respectively. Any interruption of the Company's manufacturing
arrangements with the Taiwanese Factory could cause a delay in delivery of the
Company's products to its customers and could have a material adverse effect on
the Company. See "Risk Factors -- Reliance on Significant Foreign Sales and
Dependence on Foreign Suppliers; Associated Risks" and "Business -- Operations."
While the Company believes that alternative manufacturers exist in the event of
a substantial interruption in these manufacturing arrangements, there can be no
assurance that alternative arrangements could be made on a timely basis or on
terms acceptable to the Company.

Reliance on Significant Foreign Sales and Dependence on Foreign Suppliers;
Associated Risks. International sales accounted for approximately 19%, 17% and
25% of the Company's net sales for fiscal 1994, 1995, and 1996, respectively,
and 17% for the nine months ended November 30, 1996. The Company expects
international sales to continue to represent a significant portion of net sales.
International sales are subject to inherent risks, including variations in local
economies, fluctuating exchange rates, increased difficulty of inventory
management, greater difficulty in accounts receivable collection, costs and
risks associated with localizing products for foreign countries, changes in
tariffs and other trade barriers, adverse foreign tax consequences, cultural
differences affecting product demand and customer service and burdens of
complying with a variety of foreign laws. There can be no assurance that one or
more of such factors, operating in one or more foreign countries, will not have
a material adverse effect on the Company's future international sales, and
consequently, the Company. In addition, the Company's business is dependent on
products manufactured by foreign suppliers located primarily in Taiwan, Korea,
Japan and the People's Republic of China. Purchases from foreign suppliers
subject the Company to additional risks, including, among other things,
imposition of quotas or trade sanctions, decline in the value of the United
States dollar against local currencies causing an effective increase in the cost
of finished products and components, shipment delays and the political
instability between China and Taiwan. The Company cannot predict the effect that
such factors will have on its business arrangements with foreign suppliers, but
any such development could have a material adverse effect on the Company.

Alternative suppliers exist for substantially all materials used in
manufacturing the Company's telescopes. However, the loss of any existing
supplier of the electronic components contained in certain of the Company's
products could have a material adverse effect on the Company. If an alternative
supplier is required, the Company believes that it could take up to six months
to re-engineer its products to accept the operating requirements of the
alternative supplier's components.

Customer Concentration. Although the Company sold its telescope products
to more than 500 customers during the nine months ended November 30, 1996, the
Company's seven largest customers accounted for approximately 47.0% of the
Company's net sales. The Company has no long-term contracts with any of its
customers. The loss of, or the failure to replace, any significant portion of
the sales made to any significant customer could have a material adverse effect
on the Company. See "Business -- Customers."

Dependence on Key Employees. The Company is dependent on certain key
members of its management, operations and engineering staff, including John C.
Diebel, its Chairman of the Board and Chief Executive Officer, and Steven G.
Murdock, its President and Chief Operating Officer, the loss of either of whose
services could have a material adverse effect on the Company. In addition,
failure to attract and retain key personnel could have a material adverse effect
on the Company.

8
<PAGE> 10

Competition. The telescope and binocular industries are highly competitive
and sensitive to consumer needs and preferences. In the telescope market, Meade
competes in the United States and Canada with Celestron International
("Celestron"), Bushnell Optical Co. ("Bushnell"), Tasco Sales, Inc. ("Tasco")
and Simmons Outdoor, Inc. ("Simmons") and, to a lesser extent, with other
significantly smaller companies which service niche markets. In Europe and
Japan, the Company competes primarily with Celestron and Vixen Optical
Industries Ltd. and with other smaller regional telescope importers and
manufacturers. In addition, some of the Company's current and potential
competitors in the telescope market may possess greater financial or technical
resources and competitive cost advantages due to a number of factors, including,
without limitation, lower taxes and substantially lower costs of labor
associated with manufacturing.

In the binocular market, which is generally more competitive than the
telescope market, with a greater number of competitors at each price point, the
Company competes primarily with Bushnell, Nikon Inc., Canon Inc., Minolta Camera
Co., Ltd., Pentax Corporation, Tasco, Simmons and various smaller manufacturers
and resellers. Many of these competitors in the binocular market have
significantly greater brand name recognition and financial and technical
resources than those of the Company, and many have long-standing positions,
customer relationships and established brand names in their respective markets.
See "Business -- Competition."

Reliance on Intellectual Property Rights. The Company relies primarily on
a combination of patent, copyright, and trade secret protections in
confidentiality agreements to establish and protect its intellectual property
rights. There can be no assurance that the Company's measures to protect its
intellectual property rights will deter or prevent unauthorized use of the
Company's technology. In addition, the laws of certain foreign countries may not
protect the Company's intellectual property rights to the same extent as the
laws of the United States. The Company's inability to protect its proprietary
rights in the United States or internationally could have a material adverse
effect on the Company.

Claims by third parties that the Company's current or future products or
processes infringe upon their intellectual property rights may have a material
adverse effect on the Company. The Company does not normally perform any formal
surveys or studies relating to whether its products or processes infringe upon
the intellectual property rights of others, and it would be difficult to
establish whether a given product or process infringes upon the intellectual
property rights of others. Intellectual property litigation is complex and
expensive, and the outcome of such litigation is difficult to predict. Any
future potential litigation, regardless of outcome, could result in substantial
expense to the Company and significant diversion of the efforts of the Company's
management and technical personnel. An adverse determination in any such
litigation could subject the Company to significant liabilities to third
parties, require disputed rights to be licensed from such parties, if licenses
to such rights were obtainable, or require the Company to cease using such
technology. There can be no assurance that if such licenses were obtainable,
they would be obtainable at costs reasonable to the Company. If forced to cease
using such technology, there can be no assurance that the Company would be able
to develop or obtain alternative technology. Accordingly, an adverse
determination in a judicial or administrative proceeding, changes in patent or
copyright laws or failure of the Company to obtain necessary licenses may
prevent the Company from manufacturing, using or selling certain of its products
or processes, which could have a material adverse effect on the Company.

Benefits of Offering to Selling Stockholder. The Selling Stockholder will
receive certain benefits from the sale of the Common Stock offered hereby.
Specifically, the Company intends to use approximately $6.9 million of the net
proceeds of the Offering to redeem from the Selling Stockholder all of the
outstanding shares of Redeemable Preferred Stock, including all accrued
dividends thereon. In addition, assuming that the over-allotment option granted
to the Underwriters is exercised in full, the Selling Stockholder will sell
1,000,000 shares of Common Stock in the Offering and will receive approximately
$8.4 million in net proceeds, based upon an initial public offering price of
$9.00 per share (the midpoint of the estimated initial public offering price
range) after deducting the estimated underwriting discounts and commissions, but
excluding any expenses to be reimbursed. See "Certain Transactions."

9
<PAGE> 11

Environmental Matters. Increasing public attention has been focused on the
environmental impact of many businesses. Federal, state and local laws and
regulations impose various environmental controls on the storage, handling,
discharge and disposal of certain materials used in the Company's manufacturing
process. Although the Company has not experienced a material adverse effect on
its operations from environmental laws, there can be no assurance that changes
in such laws will not impose the need for additional capital equipment or other
requirements or restrict the Company's ability to expand its operations. Any
failure by the Company to comply with such environmental laws could subject the
Company to future liabilities or could cause its manufacturing operations to be
limited or suspended, thereby causing a material adverse effect on the Company.

Concentration of Ownership. Following the Offering, the Company's senior
management will beneficially own approximately 33.3% of the outstanding shares
of Common Stock. Additionally, the Company's ESOP will own 20.0% of the
outstanding Common Stock after the Offering. The committee that administers the
ESOP (the "ESOP Committee") is comprised primarily of members of senior
management and generally directs the voting of unallocated shares and shares for
which participants do not provide voting instructions. As a result, such persons
will have the ability to influence the election of the Company's directors and
the outcome of corporate actions requiring stockholder approval. This
concentration of ownership may have the effect of delaying or preventing a
change in control of the Company. See "Principal and Selling Stockholders."

Absence of a Public Trading Market; Volatility of Stock Price. Prior to
the Offering, there has been no public market for the Company's Common Stock,
and there can be no assurance that a significant public trading market for the
Common Stock will develop or be sustained after the Offering. The initial public
offering price will be determined by negotiations among the Company, the Selling
Stockholder and the Underwriters. See "Underwriting." The negotiated initial
public offering price may not be indicative of the market price for the Common
Stock after the Offering. The market price of the Company's Common Stock may be
highly volatile due to factors such as fluctuations in the Company's or its
competitors' operating results, announcements of technological advances or new
products by the Company or its competitors, changes in the Company's
relationships with its suppliers or customers, reports or recommendations by
securities industry analysts or any of the other factors listed under "Risk
Factors." Moreover, broad market fluctuations and general economic or political
conditions may adversely affect the market price of the Company's Common Stock,
regardless of the Company's actual performance.

Shares Eligible for Future Sale. Sales of substantial amounts of Common
Stock in the public market after the Offering could adversely affect the
prevailing market price of the Common Stock. In addition to the 2,500,000 shares
of Common Stock offered by the Company and the 870,000 shares of Common Stock
offered by the Selling Stockholder, there will be 4,130,000 shares of Common
Stock outstanding after the Offering which will be "restricted securities" (the
"Restricted Securities") under the Securities Act of 1933, as amended (the
"Securities Act"). Beginning 270 days after the date of this Prospectus, at
least 2,500,000 Restricted Securities will become eligible for sale in the
public market pursuant to the expiration of certain lock-up agreements with the
Company, subject to the holding period, volume and other restrictions of Rule
144 promulgated under the Securities Act. In addition, the remaining 130,000
shares held by the Selling Stockholder shall become eligible for sale in the
public market 180 days after the date of this Prospectus, subject to the holding
period, volume and other restrictions of Rule 144. Contemporaneous public sales
of these shares in substantial amounts could adversely affect the trading price
of the Common Stock. See "Shares Eligible for Future Sale" and "Description of
Capital Stock."

Dilution. All of the currently outstanding shares of Common Stock were
issued at prices substantially lower than the price of the shares of Common
Stock offered hereby. Investors participating in the Offering will incur
immediate and substantial dilution of $6.91 in the net tangible book value per
share of the Common Stock from the initial public offering price. See "Dilution"
and "Principal and Selling Stockholders."

Anti-takeover Effects of Certain Certificate of Incorporation and Bylaw
Provisions and Delaware Law; Possible Issuance of Preferred Stock. The
Company's Certificate of Incorporation and Bylaws provide for (i) a classified
board of directors with staggered three year terms, (ii) advance notice
requirements for

10
<PAGE> 12

stockholder proposals and director nominations, (iii) a prohibition on
stockholder action by written consent and (iv) limitations on calling
stockholder meetings. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. These provisions, along
with certain provisions of the California General Corporation Law applicable to
the Company, could have the effect of discouraging certain attempts to acquire
the Company which could deprive the Company's stockholders of the opportunity to
sell their shares of Common Stock at prices higher than prevailing market
prices. In addition, upon completion of this Offering, the Board of Directors
will have authority to issue up to 1,000,000 shares of Preferred Stock and to
fix the price, rights, preferences, privileges and restrictions, including
voting rights, of those shares without any further vote or action by the
stockholders. The rights of the holders of Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any Preferred Stock
that may be issued in the future. The issuance of Preferred Stock could affect
adversely the voting power of holders of Common Stock and the likelihood that
such holders will receive dividend payments and payments upon liquidation.
Additionally, the issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company, may discourage bids
for the Common Stock at a premium over the market price of the Common Stock and
may affect adversely the market price of and the voting and other rights of the
holders of the Common Stock. See "Description of Capital Stock."

11
<PAGE> 13

USE OF PROCEEDS

The net proceeds to the Company from the sale of 2,500,000 shares of Common
Stock offered by the Company hereby are estimated to be $20.1 million (assuming
an initial public offering price of $9.00 per share and after deducting the
estimated underwriting discounts and commissions and offering expenses payable
by the Company, a portion of which may be reimbursed by the Selling Stockholder
(see "Certain Transactions")). The Company will not receive any portion of the
proceeds from the sale of any shares by the Selling Stockholder.

In April 1996, the Company entered into a five-year Loan and Security
Agreement with Fleet Capital Corporation (the "Loan Agreement") which provided
the Company with a $10.0 million revolving line of credit facility and a $9.5
million term note. In addition, the Company obtained $6.0 million in April 1996
from the sale to the Selling Stockholder of 1,000 shares of Redeemable Preferred
Stock and a warrant to purchase 1,000,000 shares of Series A Common Stock. The
proceeds from these sources were used principally by the Company in April 1996
to (i) make an $11.0 million term loan to the ESOP, the proceeds of which were
used by the ESOP to purchase the Company's Series B Common Stock from senior
management, (ii) repay approximately $2.0 million in subordinated notes
outstanding to certain senior management stockholders of the Company, (iii)
repay approximately $600,000 of bank term debt and (iv) pay $1.1 million of
expenses incurred by the Company in connection with the ESOP transaction. The
ESOP expenses included commitment fees paid to the Company's lender and
Churchill, financial advisory fees and legal and accounting fees. See "Certain
Transactions."

The Company intends to use approximately $6.9 million of the net proceeds
to redeem all of its outstanding shares of Redeemable Preferred Stock from the
Selling Stockholder and pay all accrued dividends thereon. The Redeemable
Preferred Stock has a cumulative 14% dividend on the $6.0 million redemption
amount, a liquidation preference and a five-year mandatory redemption provision.
In addition, the Company intends to use approximately $8.2 million of the net
proceeds to repay the term note payable to Fleet Capital Corporation which bears
interest at the bank's base rate (equivalent to prime) plus 0.75% with annual
principal of $1.6 million payable in defined quarterly amounts for five years
with any remaining principal and interest due in full at the end of the five
years. The Company intends to use the remaining proceeds for general corporate
purposes.

Pending use of the proceeds from the Offering, the Company will invest the
funds in investment grade interest-bearing securities, including government
obligations and other money market instruments. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

DIVIDEND POLICY

Other than dividends paid to the Company's ESOP, the Company has not paid
any cash dividends on its Common Stock and does not anticipate paying any
dividends on the Common Stock in the foreseeable future. The Company intends to
pay a dividend to the ESOP for the period from March 1, 1997 through the
completion of this Offering (approximately $60,000). Although the Company
intends to make future contributions to the ESOP upon Board approval, no future
dividends (other than dividends paid to all holders of Common Stock) will be
paid to the ESOP with respect to periods after the completion of this Offering.
The Company's ability to pay dividends is restricted under a Loan and Security
Agreement between the Company and Fleet Capital Corporation. See Note 4 of Notes
to the Financial Statements.

12
<PAGE> 14

DILUTION

As of November 30, 1996, the Company had a net tangible book value of
approximately $(950,000) or $(0.19) per share of Common Stock based upon
5,000,000 shares of Common Stock outstanding. Net tangible book value per share
is determined by dividing the net tangible book value of the Company (total
tangible assets less total liabilities) by the number of shares of Common Stock.
After giving effect to the sale by the Company of the 2,500,000 shares of Common
Stock hereby at an assumed initial public offering price per share of $9.00
(after application of the net proceeds therefrom and early redemption of the
Redeemable Preferred Stock in excess of its carrying value), the Company's net
tangible book value as of November 30, 1996 would have been $15.7 million, or
$2.09 per share of Common Stock. This represents an immediate increase in net
tangible book value of $2.28 per share to existing stockholders and an immediate
dilution of $6.91 per share to new investors purchasing shares in the Offering.
The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share..................... $9.00
Net tangible book value per share before the Offering............. $(0.19)
Increase per share attributable to new investors.................. 2.28
------
Pro forma net tangible book value per share after the Offering...... 2.09
-----
Dilution per share to new investors(1).............................. $6.91
=====
</TABLE>

The following table summarizes on a pro forma basis as of November 30,
1996, the relative investments of all existing stockholders and new investors
purchasing shares of Common Stock from the Company in the Offering. The
calculations are based on an assumed initial public offering price of $9.00 per
share, before deducting underwriting discounts and commissions and estimated
offering expenses payable by the Company, a portion of which may be reimbursed
by the Selling Stockholder. See "Certain Transactions."

<TABLE>
<CAPTION>
SHARES TOTAL
PURCHASED CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(2)............ 5,000,000 66.7% $ 3,511,000 13.5% $0.70
New investors....................... 2,500,000 33.3% 22,500,000 86.5% $9.00
--------- ------ ----------- ------
Total..................... 7,500,000 100.0% $26,011,000 100.0%
========= ====== =========== ======
</TABLE>

- ---------------
(1) Dilution is determined by subtracting the pro forma net tangible book value
per share after the Offering from the amount of cash paid by a new investor
for a share of Common Stock.

(2) Sales by the Selling Stockholder in the Offering will reduce the number of
shares held by existing stockholders to 4,130,000 shares, or 55.1% of the
total shares of Common Stock outstanding, and will increase the number of
shares held by new investors to 3,370,000 shares, or 44.9% of the total
shares of Common Stock outstanding after the Offering.

13
<PAGE> 15

CAPITALIZATION

The following table sets forth the actual capitalization of the Company as
of November 30, 1996 and as adjusted to reflect the sale of 2,500,000 shares of
Common Stock offered by the Company at an assumed public offering price of $9.00
per share (net of underwriter discounts and commissions and estimated Offering
expenses payable by the Company). This table should be read in conjunction with
the Financial Statements and Notes to the Financial Statements of the Company
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," all included herein.

<TABLE>
<CAPTION>
AT NOVEMBER 30, 1996
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Bank line of credit................................................. $ 8,984 $ 4,094
Current portion of long-term debt................................... 1,584 --
-------- --------
Total short-term debt....................................... $ 10,568 $ 4,094
======== ========
Long-term debt, net of current portion................................ $ 7,124 --
-------- --------
Redeemable Preferred Stock: 1,000 shares authorized; 1,000 shares
issued and outstanding, actual(1)................................... 3,041 N/A
-------- --------
Stockholders' equity:
Preferred Stock: 999,000 shares authorized; none issued and
outstanding, actual; 1,000,000 shares authorized, $0.01 par value
per share, none issued and outstanding, as adjusted.............. -- --
Common Stock:
Series A Common Stock: 15,000,000 shares authorized; 3,500,000
shares issued and outstanding, actual........................... 3,511 N/A
Series B Common Stock: 5,000,000 shares authorized; 1,500,000
shares issued and outstanding, actual........................... -- N/A
Common Stock, $0.01 par value per share; 20,000,000 shares
authorized; 7,500,000 shares issued and outstanding, as
adjusted........................................................ N/A $ 75
Additional paid in capital............................................ N/A 23,561
Retained earnings(1).................................................. 5,544 2,058
-------- --------
9,055 25,694
Unearned ESOP shares(2)............................................... (10,005) (10,005)
-------- --------
Total stockholders' equity (deficit)................................ (950) 15,689
-------- --------
Total capitalization........................................ $ 9,215 $ 15,689
======== ========
</TABLE>

- ---------------
(1) The Redeemable Preferred Stock redemption value at November 30, 1996,
including accrued dividends, was approximately $6.5 million. Assuming the
redemption of the Redeemable Preferred Stock, retained earnings, as
adjusted, have been reduced by the difference between the carrying value of
the Redeemable Preferred Stock and its redemption value.

(2) For a discussion of the Unearned ESOP shares see "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity
and Capital Resources."

14
<PAGE> 16

SELECTED FINANCIAL INFORMATION
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AND WEIGHTED AVERAGE SHARE AMOUNTS)

The following data, insofar as it relates to each of the fiscal years 1994
through 1996 and the nine months ended November 30, 1996, has been derived from
audited financial statements, including the balance sheets at February 28, 1995,
February 29, 1996 and November 30, 1996 and the related statements of income and
of cash flows for the three years ended February 29, 1996 and the nine months
ended November 30, 1996, and notes thereto appearing elsewhere herein. The data
for the nine months ended November 30, 1995 has been derived from unaudited
financial statements also appearing herein and which, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited
interim period. The data for the years ended February 29, 1992 and February 28,
1993 has been derived from unaudited financial statements not included herein
and which, in the opinion of management, include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair statement of the
results, for the years ended February 29, 1992 and February 28, 1993,
respectively.

<TABLE>
<CAPTION>
NINE MONTHS ENDED NOVEMBER 30,
FISCAL YEAR ENDED FEBRUARY 28(29), ----------------------------------------
----------------------------------------------------------- PRO FORMA
1992 1993 1994 1995 1996 1995 1996 1996(1)
----------- ----------- --------- --------- --------- ----------- ------------ -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................ $ 10,149 $ 13,887 $ 16,628 $ 24,934 $ 29,770 $ 23,459 $ 38,966 $ 38,966
Cost of sales............ 7,385 10,840 11,670 17,040 20,054 15,827 26,267 26,267
--------- --------- --------- --------- --------- --------- ---------- ----------
Gross profit............. 2,764 3,047 4,958 7,894 9,716 7,632 12,699 12,699
Selling expenses......... 983 1,438 1,565 2,035 2,832 2,158 3,555 3,555
General and
administrative
expenses............... 1,059 986 1,378 2,118 2,651 1,966 2,664 2,664
Research and development
expenses............... 320 274 425 423 518 396 444 444
Amortization of deferred
credit................. (35) (63) (53) -- -- -- -- --
ESOP contribution(2)..... -- -- -- -- -- -- 1,745 750
Certain charges(3)....... -- -- -- -- 300 -- 340 340
--------- --------- --------- --------- --------- --------- ---------- ----------
Operating income(4)...... 437 412 1,643 3,318 3,415 3,112 3,951 4,946
Interest expense......... 329 395 493 470 659 496 1,253 344
--------- --------- --------- --------- --------- --------- ---------- ----------
Income before income
taxes.................. 108 17 1,150 2,848 2,756 2,616 2,698 4,602
Income taxes............. 1 1 110 797 1,200 1,177 1,133 1,910
--------- --------- --------- --------- --------- --------- ---------- ----------
Net income............... 107 16 1,040 2,051 1,556 1,439 1,565 2,692
Accretion on Redeemable
Preferred Stock........ -- -- -- -- -- -- (541)(5) --
Redemption of Redeemable
Preferred Stock........ -- -- -- -- -- -- -- (3,500)
--------- --------- --------- --------- --------- --------- ---------- ----------
Net income (loss)
available to common
stockholders........... $ 107 $ 16 $ 1,040 $ 2,051 $ 1,556 $ 1,439 $ 1,024 $ (808)
========= ========= ========= ========= ========= ========= ========== ==========
Per share information:
Net income before
adjustment to net
income available per
common share......... $ 0.02 $ 0.00 $ 0.22 $ 0.44 $ 0.33 $ 0.31 $ 0.43 $ 0.45
Accretion on Redeemable
Preferred Stock...... -- -- -- -- -- -- (0.15) --
Redemption of
Redeemable Preferred
Stock................ -- -- -- -- -- -- -- (0.58)
--------- --------- --------- --------- --------- --------- ---------- ----------
Net income (loss)
available per common
share to common
stockholders......... $ 0.02 $ 0.00 $ 0.22 $ 0.44 $ 0.33 $ 0.31 $ 0.28 $ (0.13)
========= ========= ========= ========= ========= ========= ========== ==========
Supplemental net income
per common share
(unaudited)............ -- -- -- -- $ 0.37 -- $ 0.47 --
========= ==========
Weighted average common
shares outstanding..... 4,682,472 4,682,472 4,682,472 4,682,472 4,682,472 4,682,472 3,608,335 5,999,040
========= ========= ========= ========= ========= ========= ========== ==========
</TABLE>

<TABLE>
<CAPTION>
NOVEMBER 30,
FEBRUARY 28(29), ---------------------------
----------------------------------------------------------- PROFORMA
1992 1993 1994 1995 1996 1996 1996(1)
----------- ----------- --------- --------- --------- ------------ -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.......... $ 919 $ 699 $ 1,176 $ 3,358 $ 4,183 $ 7,124 $ 14,656
Total assets............. 4,473 6,929 7,992 10,197 13,035 27,447 32,072
Total current
liabilities............ 3,231 5,797 6,153 5,827 7,364 17,556 14,649
Long-term debt, net of
current portion........ 1,064 955 571 650 450 7,124 --
Redeemable Preferred
Stock.................. -- -- -- -- -- 3,041 --
Stockholders' equity
(deficit).............. 108 124 1,164 3,215 4,771 (950) 16,747
</TABLE>

15
<PAGE> 17

- ---------------
(1) Pro forma amounts are adjusted to reflect (i) the sale by the Company of
2,500,000 shares of Common Stock offered at an assumed Offering price of
$9.00, (ii) the application of net proceeds therefrom (see "Use of
Proceeds") as if the Offering had been consummated on March 1, 1996 and
(iii) the effect of the April 23, 1996 recapitalization transactions
retroactively applied to March 1, 1996. See "Certain Transactions." Pro
forma income before income taxes reflects reduced interest expense on $9.5
million of term debt assumed to be repaid with proceeds of the Offering and
the average revolver balance assumed to be repaid with the proceeds of the
Offering, net of tax effect. By assuming the Offering was effective at the
beginning of the period, both the Accretion on the Redeemable Preferred
Stock and the non-recurring portion of ESOP contribution (consisting of a
dividend on the Series B Common Stock) are eliminated on a pro forma basis.
The pro forma Redemption of Redeemable Preferred Stock represents the
difference between the carrying value ($2.5 million) and the redemption
value ($6.0 million) at the beginning of the period and is a non-recurring
item that is charged to retained earnings. The amount of this difference
reduces Net income (loss) available to common stockholders.

(5) Represents accretion reflecting original issue discount and accrued
dividends on the Redeemable Preferred Stock.

16
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis of the Company's financial condition
and results of operations is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus.

OVERVIEW

Founded in 1972, Meade designs, manufactures and distributes telescopes and
accessories for the beginning to serious amateur astronomer. The Company offers
a broad range of products, including more than 40 different telescope models
with several different optical configurations as well as more than 250 accessory
products. The Company manufactures all of its high-end advanced telescopes in
its manufacturing facility in Irvine, California, and employs seven engineers
on-site to develop new products, technological advances and improvements to
existing products. See "Business -- Competitive Strengths -- New
Products/Research and Development." The majority of the Company's less-expensive
telescopes are manufactured in Taiwan. To ensure that the telescopes produced in
Taiwan are of high quality, the Company is party to an exclusive arrangement
with the Taiwanese Factory, in which the Taiwanese Factory manufactures
telescopes only for Meade. See "Business -- Competitive Strengths -- Quality
Control."

The Company sells its products domestically through a network of direct
mail order dealers, specialty retailers and mass merchandisers and
internationally through foreign distributors. The distribution channels used by
the Company have traditionally remained relatively constant with the exception
of the Company's recent addition of mass merchandisers. Net sales to mass
merchandisers as a percentage of net sales increased from 1.2% for the fiscal
year ended February 28, 1995 to 6.0% for the fiscal year ended February 29, 1996
and to 16.9% for the nine months ended November 30, 1996. As a percentage of net
sales, net sales to mail order dealers decreased from 26.1% for the fiscal year
ended February 28, 1995 to 17.8% for the fiscal year ended February 29, 1996 and
to 12.8% for the nine months ended November 30, 1996. Generally, mail order
dealers sell a greater number of the Company's high-end advanced telescopes as
compared to less-expensive telescopes. The Company's growth in sales of
less-expensive telescopes has, in recent years, exceeded the growth in sales of
high-end advanced telescopes. To complement its extensive line of telescopes and
leverage its distribution system, Meade has recently introduced a complete line
of binoculars to be sold under the Meade brand name. See "Business -- Sales and
Marketing."

Net sales for Meade increased from $10.1 million to $29.8 million during
the fiscal years from 1992 to 1996. Furthermore, net sales for the nine months
ended November 30, 1996 increased from $23.5 million to $39.0 million, an
increase of 66.1% over the nine months ended November 30, 1995. Income from
operations increased from $437,000 to $3.4 million during the fiscal years from
1992 to 1996. Income from operations for the nine months ended November 30, 1996
increased by $839,000, or 27.0%, over the nine months ended November 30, 1995.
In addition, income from operations before certain charges and before a
non-recurring ESOP contribution for the nine months ended November 30, 1996
increased by $2.2 million, or 69.9% over the nine months ended November 30,
1995. The Company attributes these increases to its emphasis on research,
development and successful introduction of new products, enhancements to
existing products and its increase in marketing and customer service and support
activities. See "Business -- Introduction."

17
<PAGE> 19

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items
from the Company's Income Statements as a percentage of net sales for the
periods indicated.

<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED ENDED
FEBRUARY 28(29), NOVEMBER 30,
------------------------- ---------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales.......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales...................................... 70.2 68.3 67.4 67.5 67.4
----- ----- ----- ----- -----
Gross profit....................................... 29.8 31.7 32.6 32.5 32.6
Operating expenses:
Selling expenses................................. 9.4 8.2 9.5 9.2 9.1
General and administrative expenses.............. 8.3 8.5 8.9 8.4 6.8
Research and development expenses................ 2.5 1.7 1.7 1.7 1.1
Amortization of deferred credit.................. (0.3) -- -- -- --
ESOP contribution................................ -- -- -- -- 4.6
Certain charges.................................. -- -- 1.0 -- 0.9
----- ----- ----- ----- -----
Total operating expenses................. 19.9 18.4 21.1 19.3 22.5
----- ----- ----- ----- -----
Income from operations............................. 9.9 13.3 11.5 13.2 10.1
Interest expense................................... 3.0 1.9 2.2 2.1 3.2
----- ----- ----- ----- -----
Income before income taxes......................... 6.9 11.4 9.3 11.1 6.9
Provision for income taxes......................... 0.7 3.2 4.0 5.0 2.9
----- ----- ----- ----- -----
Net income......................................... 6.2 8.2 5.3 6.1 4.0
===== ===== ===== ===== =====
</TABLE>

NINE MONTHS ENDED NOVEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED NOVEMBER 30,
1995

Net sales increased from $23.5 million for the nine months ended November
30, 1995 to $39.0 million for the nine months ended November 30, 1996, an
increase of 66.1%. This increase was primarily due to (i) an increase of $10.1
million in net sales of less-expensive telescopes, primarily due to increases in
sales to mass merchandisers (see "Business -- Sales and Marketing"), (ii) an
increase of $1.3 million in net sales of telescope accessories and (iii) an
increase of $3.2 million in net sales of new products introduced in late fiscal
1996 and early fiscal 1997, including the ETX Astro Telescope, the LX50 and LX10
lines of Schmidt-Cassegrain and Maksutov-Cassegrain telescopes.

Gross profit increased from $7.6 million (32.5% of net sales) for the nine
months ended November 30, 1995 to $12.7 million (32.6% of net sales) for the
nine months ended November 30, 1996, an increase of 67.1%. Gross profit as a
percentage of net sales remained constant as a result of variations in product
mix.

Selling expenses increased from $2.2 million (9.2% of net sales) for the
nine months ended November 30, 1995 to $3.6 million (9.1% of net sales) for the
nine months ended November 30, 1996, an increase of 63.6%. This increase
principally reflects (i) higher advertising and other selling expenses to
support higher sales volumes for the nine months ended November 30, 1996 as
compared to the nine months ended November 30, 1995, (ii) higher freight and
other shipping costs due to higher sales volumes for the nine months ended
November 30, 1996 as compared to the nine months ended November 30, 1995 and
(iii) higher costs due to a net increase in selling and shipping personnel for
the nine months ended November 30, 1996 as compared to the nine months ended
November 30, 1995.

General and administrative expenses increased from $2.0 million (8.4% of
net sales) for the nine months ended November 30, 1995 to $2.7 million (6.8% of
net sales) for the nine months ended November 30, 1996, an increase of 35.0%.
The increase in the general and administrative expenses principally reflects
higher personnel-related costs and general office costs for the nine months
ended November 30, 1996 as compared to the nine months ended November 30, 1995.
The decrease in general and administrative expenses as a percentage of net sales
for the nine months ended November 30, 1996 as compared to the comparable period
in the prior year was primarily due to efficiencies achieved by allocating the
Company's fixed expenses over the increased revenue base.

18
<PAGE> 20

Research and development expenses increased from $396,000 (1.7% of net
sales) for the nine months ended November 30, 1995 to $444,000 (1.1% of net
sales) for the nine months ended November 30, 1996, an increase of 12.1%. This
increase was principally due to higher personnel-related costs and higher
outside consulting costs for the nine months ended November 30, 1996, as
compared to the nine months ended November 30, 1995.

The ESOP contribution expense of $1.7 million for the nine months ended
November 30, 1996, represents (i) an accrual of $750,000 for three quarters of
the expected Company contribution to the ESOP for the fiscal year ending
February 28, 1997 (the ESOP was effective March 1, 1996 and, therefore, there is
no comparable expense for the nine months ended November 30, 1995) and (ii)
dividends of $995,000 declared and paid on the Series B Common Stock. The
dividends paid are treated as an ESOP contribution as the dividends are used to
repay the principal balance of a loan payable by the ESOP to the Company.

Certain charges for the nine months ended November 30, 1996 represent
one-time contractual bonuses of $340,000 accrued on behalf of certain members of
senior management as described in the Securities Purchase Agreement, dated April
23, 1996, between the Company and Churchill ESOP Capital Partners, A Minnesota
Limited Partnership ("Churchill").

Interest expense increased from $496,000 for the nine months ended November
30, 1995 to $1.3 million for the nine months ended November 30, 1996, an
increase of 162.1%. This increase was principally due to (i) interest expense on
the bank term debt incurred in connection with the ESOP recapitalization in
April 1996, and (ii) increased average outstanding balances on the bank line of
credit to support higher receivables and inventory associated with increased
sales of less-expensive telescopes for the nine months ended November 30, 1996,
as compared to the nine months ended November 30, 1995.

Income taxes decreased from $1.2 million (45.0% of income before income
taxes) for the nine months ended November 30, 1995 to $1.1 million (42.0% of
income before income taxes) for the nine months ended November 30, 1996. The
reduction in the tax rate for the nine months ended November 30, 1996, as
compared to the nine months ended November 30, 1995, was due to differences in
the effect of expenses not deductible for tax purposes in each period.

FISCAL 1996 COMPARED TO FISCAL 1995

Net sales increased from $24.9 million in fiscal 1995 to $29.8 million in
fiscal 1996, an increase of 19.7%. This increase was due primarily to an
increase of $3.0 million in net sales of the Company's less-expensive
telescopes.

Gross profit increased from $7.9 million (31.7% of net sales) in fiscal
1995 to $9.7 million (32.6% of net sales) in fiscal 1996, an increase of 22.8%.
The increase in the gross profit as a percentage of net sales was principally
due to the increased sales of the Company's less-expensive telescopes, which
generally have a higher gross profit margin than the Company's other products.

Selling expenses increased from $2.0 million (8.2% of net sales) in fiscal
1995 to $2.8 million (9.5% of net sales) in fiscal 1996, an increase of 40.0%.
This increase principally reflects (i) increases in advertising and freight
costs due to higher sales volumes in fiscal 1996 compared to fiscal 1995 and
(ii) higher personnel-related costs due to net increases in selling and shipping
personnel in fiscal 1996 as compared to fiscal 1995.

General and administrative expenses increased from $2.1 million (8.5% of
net sales) in fiscal 1995 to $2.7 million (8.9% of net sales) in fiscal 1996, an
increase of 28.6%. This increase principally reflects higher costs due to net
increases in general and administrative personnel and executive salary increases
in fiscal 1996 as compared to fiscal 1995.

Research and development expenses increased from $423,000 (1.7% of net
sales) in fiscal 1995 to $518,000 (1.7% of net sales) in fiscal 1996, an
increase of 22.5%. This increase principally reflects higher costs due to
increases in research and development personnel.

During fiscal 1996 the Company incurred certain charges that are not
expected to continue into future periods. These charges, totaling $300,000 in
fiscal 1996, related to management bonuses awarded in connection with the
completion of the ESOP recapitalization. There were no comparable charges in
fiscal 1995.

19
<PAGE> 21

Interest expense increased from $470,000 in fiscal 1995 to $659,000 in
fiscal 1996, an increase of 40.2%. The increase was primarily due to increased
average outstanding balances on the bank line of credit to support increased
sales for less-expensive telescopes in fiscal 1996 compared to fiscal 1995.

Income taxes increased from $797,000 (28.0% of income before income taxes)
in fiscal 1995 to $1.2 million (43.5% of income before income taxes) in fiscal
1996. The tax rate in fiscal 1995 reflects the utilization of approximately
$430,000 in net operating loss carry forwards, for which no benefit had
previously been recognized. There were no net loss carry forwards available for
utilization in fiscal 1996.

FISCAL 1995 COMPARED TO FISCAL 1994

Net sales increased from $16.6 million in fiscal 1994 to $24.9 million in
fiscal 1995, an increase of 50.0%. This increase was due primarily to (i) an
increase of $3.7 million in net sales of the Company's less-expensive
telescopes, (ii) an increase of $2.4 million in net sales of LX200 model
telescopes and (iii) an increase of $1.2 million in net sales of telescope
accessories.

Gross profit increased from $5.0 million (29.8% of net sales) in fiscal
1994 to $7.9 million (31.7% of net sales) in fiscal 1995, an increase of 58.0%.
The increase in the gross profit as a percentage of net sales was principally
due to the increased sales of the Company's less-expensive telescopes which
generally have a higher gross profit margin than the Company's other products.

Selling expenses increased from $1.6 million (9.4% of net sales) in fiscal
1994 to $2.0 million (8.2% of net sales) in fiscal 1995, an increase of 25.0%.
This increase principally reflects increases in advertising and freight costs
due to higher sales volumes in fiscal 1995 compared to fiscal 1994.

General and administrative expenses increased from $1.4 million (8.3% of
net sales) in fiscal 1994 to $2.1 million (8.5% of net sales) in fiscal 1995, an
increase of 50.0%. This increase principally reflects higher costs due to
increases in general and administrative personnel.

Research and development expenses decreased from $425,000 (2.5% of net
sales) in fiscal 1994 to $423,000 (1.7% of net sales) in fiscal 1995. Increases
in personnel related costs during fiscal 1995 were offset by decreases in
outside consulting expenses as compared to fiscal 1994.

Interest expense decreased from $493,000 in fiscal 1994 to $470,000 in
fiscal 1995, a decrease of 4.7%. This decrease was primarily due to changes in
the mix of bank and other borrowings in fiscal 1995 compared to fiscal 1994.

Income taxes increased from $110,000 (9.6% of income before income taxes)
in fiscal 1994 to $797,000 (28.0% of income before income taxes) in fiscal 1995.
The tax rate in fiscal 1994 reflects the utilization of approximately $145,000
in net operating loss carryforwards, for which no benefit had previously been
recognized and a decrease of $200,000 in the valuation allowance. The tax rate
in fiscal 1995 reflects the utilization of approximately $430,000 in net
operating loss carryforwards, for which no benefit had previously been
recognized.

SEASONALITY AND QUARTERLY RESULTS OF OPERATIONS

The Company has experienced, and expects to continue to experience,
substantial fluctuations in its sales, gross margins and profitability from
quarter to quarter. Factors that influence these fluctuations include the volume
and timing of orders received, changes in the mix of products sold, market
acceptance of the Company's products, competitive pricing pressures, the
Company's ability to meet increasing demand and delivery schedules, the timing
and extent of research and development expenses, and the timing and extent of
product development costs. In addition, a substantial portion of the Company's
net sales and operating income typically occurs in the third quarter of the
Company's fiscal year primarily due to disproportionately higher customer demand
for less-expensive telescopes during the Christmas holiday season. The Company
has recently experienced increased sales to mass merchandisers. Mass
merchandisers, along with specialty retailers, purchase a considerable amount of
their inventories to satisfy such seasonal customer demand. These purchasing
patterns have caused the Company to increase its level of inventory during its
second and third quarters in response to such demand or anticipated demand. As a
result, the Company's working capital requirements have correspondingly
increased at such times. The Company believes that the net proceeds of

20
<PAGE> 22

this Offering, together with internally generated cash flow and borrowing
availability, will be sufficient to meet any such increased working capital
requirements during these periods for the foreseeable future.

The following table presents unaudited financial results for each of the
eight quarters in the period ended November 30, 1996. The Company believes that
all necessary adjustments have been included to present fairly the quarterly
information when read in conjunction with the Financial Statements and Notes
included elsewhere in this Prospectus. The operating results for any quarter are
not necessarily indicative of the results for any subsequent quarter or for the
fiscal year ended February 28, 1997.

<TABLE>
<CAPTION>
FISCAL 1995 FISCAL 1996 FISCAL 1997
------------------------------------- ------------------------------------- ---------------------------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH FIRST SECOND THIRD
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales........... $4,352 $5,955 $8,969 $5,658 $4,812 $7,260 $11,386 $6,310 $7,166 $12,031 $19,769
Gross profit........ 1,217 1,822 3,151 1,704 1,400 2,123 4,109 2,084 2,154 3,926 6,619
ESOP contribution... -- -- -- -- -- -- -- -- 250 1,245 250
Operating income.... 194 638 1,861 625 50 686 2,376 303 149 557 3,245
Net income (loss)... $ 54 $ 372 $1,245 $ 380 $ (48) $ 302 $ 1,225 $ 77 $ (58) $ 53 $ 1,570
</TABLE>

Quarterly results can be affected by a number of factors including the
timing of orders, production delays or inefficiencies, and raw materials
availability. See "Risk Factors -- Quarterly Fluctuations and Seasonality" and
"Business -- Operations -- Materials and Supplies."

LIQUIDITY AND CAPITAL RESOURCES

Since 1993, the Company has funded operations primarily through borrowings
from banks and financial institutions and proceeds from related party
subordinated notes. For the nine months ended November 30, 1996, the Company
funded operations principally through borrowings of $6.9 million on its bank
line of credit. At November 30, 1996, the Company had accounts receivable of
$12.9 million, inventory of $11.3 million and working capital of $7.1 million.
Increases in accounts receivable and inventory at November 30, 1996 were
primarily due to increased sales for the period and increased stocking levels to
support anticipated future sales, respectively.

Capital expenditures, including financed purchases of equipment, aggregated
$537,000, $664,000, $377,000 and $304,000 for the nine months ended November 30,
1996 and the fiscal years ended February 29, 1996 and February 28, 1995 and
1994, respectively. The Company had no material capital expenditure commitments
as of November 30, 1996.

The Company leases a 57,000 square foot manufacturing and corporate
facility and a separate 27,000 square foot distribution facility (the "Existing
Leases"). At November 30, 1996, monthly lease expenses for these facilities
aggregate approximately $34,000. In December 1996, the Company entered into a
ten year lease agreement for a new 161,000 square foot facility that the Company
expects to begin to occupy in the third quarter of fiscal 1998. Net lease
expenses on the new facility are approximately $75,000 per month, with fixed
increases of approximately 3% per year as compared to the current monthly lease
expenses of approximately $34,000. The Company believes there will be no
material expenses incurred in connection with the termination of the Existing
Leases because (i) the Company intends to sublease its manufacturing and
corporate facility or pay a fee to terminate the lease (such fee is not expected
to exceed $75,000) and (ii) the distribution facility lease terminates in
October 1997.

In April 1996, the Company entered into a five-year Loan and Security
Agreement with Fleet Capital Corporation (the "Loan Agreement") which provides
for (i) a $10.0 million revolving line of credit facility, secured by the
Company's accounts receivable and inventories and (ii) a $9.5 million term note
(the "term note") secured by the assets of the Company. The term note will be
repaid with the proceeds of this Offering. See "Use of Proceeds." The Loan
Agreement contains certain financial and operating covenants including
compliance with certain financial ratios, limitations on the ability of the
Company to incur additional indebtedness and restrictions on, among other
things, the Company's ability to pay cash dividends, merge or consolidate with
any entity, make loans or advances of money out of the ordinary course of
business and make capital expenditures which, in the aggregate, exceed $1.0
million during any fiscal year.

21
<PAGE> 23

Also in April 1996, the Company was recapitalized through the sale of
Redeemable Preferred Stock to Churchill. For proceeds of $6.0 million, the
Company sold 1,000 shares of newly-issued Redeemable Preferred Stock to
Churchill and issued a warrant to Churchill to purchase 1,000,000 shares of
Series A Common Stock. The Redeemable Preferred Stock has a cumulative annual
14% dividend on the $6.0 million redemption amount, a liquidation preference and
a five-year mandatory redemption provision. The Redeemable Preferred Stock will
be repurchased by the Company with the proceeds of this Offering. See "Use of
Proceeds." The warrant was exercised in April 1996 for an aggregate purchase
price of $10,000.

In April 1996, the Company made an $11.0 million term loan to the ESOP (the
"ESOP Loan"), the proceeds of which were used by the ESOP to purchase the
Company's Series B Common Stock from senior management. See "Certain
Transactions." The ESOP pledged the stock back to the Company as security for
the ESOP Loan. The ESOP Loan has a ten-year term and bears interest at 6% per
annum. Principal and interest are due semi-annually, subject to the Company
making contributions to the ESOP to fund the principal and interest payments.

Contributions to the ESOP are accounted for as a contribution expense on
the Company's income statement and are accrued quarterly based upon the expected
annual contribution amount. As quarterly contributions are accrued, the
corresponding shares are added to weighted average common shares outstanding;
however, unearned ESOP shares on the Company's Balance Sheet are reduced
annually following Board approval of the contribution. It is expected that the
Board will approve a $1.0 million ESOP contribution for fiscal 1997 which would
result in the release of approximately 135,000 shares of Series B Common Stock
from unearned ESOP shares.

The ESOP uses the contributions to repay amounts due on the ESOP Loan. The
ESOP contribution expense is a net non-cash charge which is added back to net
income to arrive at cash flows provided by operating activities. As the Company
makes these non-cash contributions to the ESOP to fund the repayment of the ESOP
Loan, the Company will realize cash tax savings equal to the product of the
contributions made multiplied by the applicable statutory tax rates in effect at
the time. At November 30, 1996, total future planned contributions to be made to
the ESOP aggregated $10.25 million.

The dividend of $995,000 paid in August 1996 to the ESOP on the shares of
Series B Common Stock is also accounted for as a contribution expense because
the dividends are used to repay the principal balance of the ESOP Loan. The
dividend and related repayment of a portion of the ESOP Loan resulted in the
release of approximately 136,000 shares of Series B Common Stock from unearned
ESOP shares. The shares of Series B Common Stock will be converted into Common
Stock upon the closing of the Offering.

The Company believes that the net proceeds of this Offering, together with
internally generated cash flow and borrowing availability, will be sufficient to
meet its operating, working capital and capital expenditure requirements through
the next twelve months. In the event the Company's plans require more capital
than is presently anticipated, the Company's remaining cash balances may be
consumed and additional sources of liquidity, such as debt or equity financings,
may be required to meet its capital needs. There can be no assurance that
additional capital beyond the amounts the Company currently requires will be
available on reasonable terms, if at all.

INFLATION

The Company does not believe that inflation has had a material effect on
the results of operations during the past three years. There can be no assurance
that the Company's business will not be affected by inflation in the future.

FORWARD-LOOKING INFORMATION

This Prospectus contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in the Risk Factors and elsewhere in this Prospectus.

22
<PAGE> 24

BUSINESS
INTRODUCTION

Meade was sold by its founder and current Chief Executive Officer to a
private investor in 1986 and was then reacquired by the Company's current senior
management in 1991. After reacquisition, management reemphasized the importance
of research and development for new products and product enhancements. Recently,
one of Meade's newest products, the ETX Astro Telescope was referred to on the
cover of the January 1997 issue of Sky and Telescope as the "hottest scope
ever." Meade also significantly broadened the Company's less-expensive telescope
line and has an exclusive arrangement with the Taiwanese Factory to manufacture
substantially all of the Company's less-expensive telescopes in accordance with
the Company's proprietary designs. Meade also has increased the marketing of its
products by aggressively advertising in periodicals directed to amateur
astronomers and by providing greater support to the Company's dealers, specialty
retailers, foreign distributors, mass merchandisers, and the end users of
Meade's products. Additionally, Meade publishes a comprehensive, full-color,
high quality product catalogue which provides significant product exposure.

In the United States and Canada, the Company distributes its products
through a network of more than 500 specialty retailers and mass merchandisers,
which offer Meade's products in more than 1,000 retail store locations. The
Company also sells certain of its telescope models to selected national mail
order dealers. Meade sells its products internationally through a network of
approximately 30 foreign distributors, many of which service retail locations in
their respective countries. International sales accounted for approximately 17%
of the Company's net sales for the nine months ended November 30, 1996. See
"Note 11 to the Financial Statements." The Company also publishes a
comprehensive product catalogue which management believes provides extensive
exposure for the Company's products.

Meade's net sales have increased from $10.1 million for the fiscal year
ended February 28, 1992, to $29.8 million for the fiscal year ended February 29,
1996. During the same period, operating income increased from $437,000 to $3.7
million before certain charges of $300,000. For the nine months ended November
30, 1996, Meade generated net sales of $39.0 million and operating income of
$5.3 million before certain charges of $340,000 and before a non-recurring ESOP
contribution of $995,000, compared to $23.5 million and

23
<PAGE> 25

$3.1 million, respectively, for the nine months ended November 30, 1995. These
represent increases in net sales of 66.1% and operating income before certain
charges and before the non-recurring ESOP contribution of 69.9% for the nine
month periods. See "Selected Financial Information." The Company intends to
continue to pursue an integrated strategy of product line expansion, aggressive
marketing, expansion into the binocular market and expansion of the Company's
distribution network.

INDUSTRY OVERVIEW

Market-size data for the telescope and binocular industries is difficult to
obtain because many of the companies in the industries are either private or
subsidiaries or divisions of larger public companies. The Company believes that
the overall size of the telescope market is driven, in part, by the introduction
of new products.

The telescope industry is generally divided into two categories (i)
advanced astronomical telescopes for serious amateur astronomers who consider
astronomy to be an important leisure activity and (ii) less-expensive telescopes
for beginning to intermediate amateur astronomers. The market for advanced
astronomical or higher-end telescopes is characterized by frequent technological
developments, including the recent introduction of electronic and computer-aided
features. Serious amateur astronomers demand that the optical, electronic and
mechanical performance of the telescopes and accessories they purchase be of
very high quality. This high-end telescope market, while smaller than the
less-expensive telescope market, continues to drive the technological advances
in the industry. Management believes that overall consumer awareness is
increased by the advances made in the high-end telescope market.

Within the industry, manufacturers generally offer three types of
telescopes (a) refracting telescopes, which use a lens at the upper end of the
optical tube to collect light, (b) reflecting telescopes, which use a concave
mirror as the primary optical element and (c) catadioptric (mirror-lens)
telescopes, which employ a combination of mirrors and lenses to form the image.
Each type has its own advantages: refractors are easy to maintain, yield sharp
images and are relatively inexpensive in smaller apertures; reflectors generally
are the lowest-cost means of purchasing larger apertures and are well suited to
the intermediate amateur astronomer; and mirror-lens telescopes are more
portable in larger apertures and are popular among serious amateur astronomers.

COMPETITIVE STRENGTHS

Meade believes that it derives significant benefits from its position as a
leading designer and distributor of telescopes and related products. These
benefits include its ability to offer its customers one of the most innovative,
broadest product lines available, embodying both high quality and value. The
Company attributes its success to the following competitive strengths:

New Products/Research and Development. Meade places a primary emphasis on
product innovation and quality through its research and development efforts. The
Company currently employs seven engineers on-site, developing new products,
technological advances and improvements to existing products, in an effort to
remain the industry leader. The Company is able to obtain additional benefits by
out-sourcing certain research and development services to supplement its
internal expertise. Because of this dedication to research and development, the
Company has been able to introduce many new products over time and has been able
to take advantage of certain market opportunities as they have occurred. See
"Business -- Products." Meade believes that the members of its senior level
management are among the most experienced in the telescope industry. The
Company's four most experienced officers have been employed in this industry for
an average of more than 21 years. The Company, its management and its employees
are dedicated to the goal of producing technically superior yet
price-competitive products for the amateur astronomer and have been responsible
for some of the industry's most technically advanced consumer telescopes.

Broadest Line of Products. The Company's strategy has been to leverage its
brand name recognition and reputation for high-end telescopes to facilitate the
sales of its less-expensive telescopes. As a result, the Company believes it
currently has the most complete line of telescopes available, including more
than 40 different telescope models with several different optical configurations
as well as more than 250 accessory

24
<PAGE> 26

products. The Company's telescopes range in aperture from 2 to 16 inches and in
retail price from less than $100 to $15,000.

Optical Systems Expertise. Meade has made substantial investments to
develop an expertise in optical engineering, providing it with the ability to
produce high quality optics on-site. Meade employs highly skilled opticians who
use sophisticated manufacturing techniques and equipment, including specialized
optical polishing machines and vacuum-coating machines, to produce what the
Company believes to be the highest quality optics available in the consumer
telescope market.

Quality Control. Meade's manufacturing and engineering personnel
coordinate the manufacturing process in order to ensure that product quality is
maintained at a high level within an efficient cost structure. The Company has
in place quality controls covering all aspects of the manufacturing process of
its products, from each product's precision optical system to its final assembly
and testing. The Company manufactures all of its high-end advanced telescopes in
its manufacturing facility in Irvine, California, while most of the Company's
less-expensive telescopes are manufactured for the Company in Taiwan through an
exclusive arrangement with the Taiwanese Factory. This exclusive arrangement
provides the Company with the ability to exert control over the telescope
manufacturing process to ensure the quality and performance of its less-
expensive products. To support this arrangement, Meade regularly commits one of
its United States based engineers to the Taiwanese Factory.

Broad Distribution Network. The Company's sales force works closely with
specialty retailers, distributors and mass merchandisers on product quality,
technical knowledge and customer service. Meade has its own on-site graphic arts
department to work with specialty retailers, distributors and mass merchandisers
to produce print advertising, hang-tags for displays within retail outlets, and
other point-of-sale support. This capability provides the Company's customers
with a comprehensive marketing program to assist in their sales efforts. As a
result of these efforts, Meade has become a major supplier of telescopes to such
retailers as The Nature Company, Service Merchandise, Natural Wonders, Wal-Mart,
J.C. Penney and Discovery Channel Stores. Meade also has an expanding
international presence. Its sales to foreign distributors have grown from $3.2
million for the fiscal year ended February 28, 1994 to $7.5 million for the
fiscal year ended February 29, 1996. Sales to foreign distributors reached $6.8
million for the nine months ended November 30, 1996.

Superior Customer Service. Meade believes that its high levels of customer
service and technical support are important factors that differentiate it from
its competitors. In an effort to provide each of the Company's customers with
post-sale service and to relieve them of the burden of such service, Meade has
established multiple dedicated toll-free telephone numbers so that its customers
and end users can call the Company's support personnel with any questions
relating to its products. The Company's experience is that product returns from
first-time telescope users have been historically higher than necessary for the
industry because such first-time customers are often unfamiliar with assembly
procedures and telescope operation. The Company believes that providing this
toll-free assistance reduces product returns by better educating first-time
users. In addition, in an effort to simplify assembly of the Company's products,
Meade pre-assembles a substantial portion of its telescopes prior to packaging.
Meade also makes available to telescope owners astronomical software and other
product enhancements.

GROWTH STRATEGY

Meade's objective is to expand its position in the domestic and
international marketplace for telescopes and binoculars. The key elements of the
Company's strategy to achieve this objective are as follows:

Expansion of Product Lines. The Company continually seeks to develop and
introduce new and innovative telescope products and accessories. The Company
maintains an on-site engineering staff to pursue research and development
opportunities and to respond quickly to market demands for product modification
and innovation. Recent new products the Company has introduced include (i) the
ETX Astro Telescope ("ETX"), (ii) new celestial observation software and (iii)
enhanced CCD digital cameras that permit the generation of high resolution
astronomical images from the telescope to a home personal computer. The Company
believes that the ETX will have a significant impact on certain segments of the
telescope industry permitting, for the first time, the purchase of a
high-quality, attractive, portable instrument of sufficient

25
<PAGE> 27

aperture to enable the high resolution observation of celestial and terrestrial
objects at a reasonable price. The ETX, introduced in 1996, at present has a
four-month back-order. Other new telescopes and existing product upgrades under
development are scheduled for release in calendar 1997 and 1998.

Aggressive Marketing. Meade's marketing philosophy is designed to convey
the quality and value of its products, while communicating the sophistication,
depth and breadth of selection. Meade advertises in most major domestic and
international telescope and astronomy related magazines and periodicals with
comprehensive, full color, technically informative advertisements which present
a consistent message of innovation and quality about the Company and its
products. Meade is a regular advertiser in the two largest domestic astronomy
periodicals, Sky and Telescope and Astronomy, and on average purchases eight
pages of advertising in every issue of each magazine. The Company plans to
market and advertise its binoculars in various bird watching and related
magazines and periodicals during calendar 1997. The Company also works with
specialty retailers, distributors and mass merchandisers by developing
hang-tags, print advertisements, catalogue displays and other print media in an
effort to continually provide customers with a consistent message and to assist
in their marketing efforts. In addition, the Company publishes a 100-page, full
color, high quality catalogue that has been a key component of its overall
marketing strategy. The Company believes this catalogue is the most
comprehensive and informative catalogue within the industry, with an abundance
of technical product information.

Expansion into Binocular Market. To complement its extensive line of
telescopes, Meade has introduced a complete line of binoculars for the consumer
market. The Company plans to access its current distribution network for
telescopes as a means to market its line of binoculars. The Company plans to
follow its sales practices in the telescope market and provide its mail order
dealers, specialty retailers, foreign distributors and mass merchandisers with a
complete line of binoculars, from entry level to high-end products, together
with the same level of marketing and point-of-sale service. See "Risk
Factors -- Uncertain Market for New Binocular Line." Meade's objective is to
obtain a reputation for high quality products in the binocular market, similar
to its established reputation in the telescope market. As with many of the
Company's competitors, Meade purchases its binoculars from manufacturers outside
the United States.

Expansion of Distribution Network. The Company intends to continue to
expand its network of mass merchandisers. For example, in the Spring of 1996,
Meade added Service Merchandise, and for the Christmas holiday season, Wal-Mart,
to its distribution network for telescopes. The Company intends to market to
other mass merchandisers as well.

PRODUCTS

While the human eye is limited by its lens diameter, a telescope serves as
a larger "eye," gathering additional light and permitting the observation of
objects in tremendously increased detail. The most important operative
characteristic of a telescope in gathering light is its aperture, or diameter,
rather than its power or magnification. Generally, higher magnification
increases object resolution, but aperture ultimately determines how much one can
see. Even with the smallest Meade telescopes, one can see clearly and sharply
many celestial objects, including the ring system of Saturn as well as Saturn's
largest moon, the distinctive cloud belt structure and four principal moons of
Jupiter, the moon-like phases of the planet Venus, hundreds of craters and
mountain ranges on the Moon, and a multitude of deep-space objects.

26
<PAGE> 28

The table below presents a history of Meade's significant product
introductions since the formation of the Company in 1972 as well as the
evolution of product development over the past 24 years. In addition, the table
describes the products and their principal features, suggested retail prices and
years of introduction. The products introduced prior to 1990 are no longer
manufactured or sold by the Company.

<TABLE>
<CAPTION>
APPROXIMATE
YEAR SUGGESTED
INTRODUCED PRODUCT RETAIL PRICE PRODUCT DESCRIPTION
- ---------- ----------------------------- ----------------- ----------------------------------------
<C> <S> <C> <C>
1972 Models 200 and 300 Series $ 60-250 2" to 3" small refracting telescopes
imported from Japan. Complete with
tripod and eyepieces on equatorial and
altazimuth mounts.
1977 Model 628 and Model 826 $ 400-500 6" and 8" Newtonian reflecting
telescopes on equatorial mounts. The
first telescopes manufactured by Meade.
1979 Research Series Models 880, $1,000-1,700 8", 10" and 12.5" Newtonian reflecting
1060 and 1266 telescopes. Largest, most sophisticated
mount produced by the Company up to
1979.
1980 Models 2040 and 2080 $ 500-900 4" and 8" fork mounted
Schmidt-Cassegrain telescopes with
AC-powered worm-gear drive. The
Company's first production Schmidt-
Cassegrain telescopes.
1982 Model 2120 $ 1,700 The Company's first 10"
Schmidt-Cassegrain telescope.
1983 Model 90 Series $ 300 90 mm Maksutov-Cassegrain spotting
scopes. The Company's first domestically
produced small, portable spotting
scopes.
1984 Model LX3 Series $ 1,400 8" and 10" Schmidt-Cassegrain telescopes
with integrated electronic drive systems
to automatically track objects in the
sky. The Company's first DC-powered
electronically driven
Schmidt-Cassegrains.

1986 SALE OF COMPANY BY THE FOUNDING STOCKHOLDER

1988 Model LX6 Series $ 1,600 The Company's first 8" and 10" Schmidt-
Cassegrain telescopes featuring
microprocessor control. The Company's
first telescopes to feature digital
read-out of telescope position and
Smart-Drive permanent periodic error
control.
1990 Models 226 (now 230), 289 and $ 150-300 The Company's first 60mm refracting and
4450 114mm reflecting telescopes purchased
from the Taiwanese Factory.

1991 REACQUISITION OF COMPANY BY THE FOUNDING STOCKHOLDER AND SENIOR MANAGEMENT

1992 Models 390, 395 and 4500 $ 400-600 The Company's first 90mm refracting and
114mm deluxe reflecting telescopes
purchased from the Taiwanese Factory.
6", 8", 10" and 16" Newtonian reflecting
telescopes on equatorial mounts.
Redesign of the Company's Newtonian
telescopes. They have since been
upgraded to include a DC-powered
cordless drive system to track objects
in their paths across the sky.
Starfinder Equatorial Series $ 500-800
</TABLE>

27
<PAGE> 29

<TABLE>
<CAPTION>
APPROXIMATE
YEAR SUGGESTED
INTRODUCED PRODUCT RETAIL PRICE PRODUCT DESCRIPTION
- ---------- ----------------------------- ----------------- ----------------------------------------
<C> <S> <C> <C>
1992 8" and 10" LX200 Models $2,000-3,000 8" and 10" Schmidt-Cassegrain
(Cont.) computerized telescopes with built-in
747 celestial object library (later
updated to 64,350 objects) and automatic
go-to capabilities. The Company's first
computerized telescopes with go-to
capabilities and an object database.
ED (Extra-low Dispersion) apochromatic
refractors with automatic slewing and
go-to capabilities. This line includes
4", 5", 6" and 7" telescopes.
Model ED Refractor Series $ 2,000-5,000
1993 12" LX200 Model $ 4,000 12" Schmidt-Cassegrain computerized
telescope.
1994 Starfinder Dobsonian Series $ 300-1,200 6", 8", 10", 12.5" and 16" Newtonian
reflecting telescopes on Dobsonian
mounts. The Company's first large
Newtonian telescopes on a simple
altazimuth mount.
16" Schmidt-Cassegrain computerized
telescope.
16" LX200 Model $ 15,000
Digital imaging equipment. Allows user
to image celestial objects in a fraction
of the time required with traditional
astrophotography equipment.
CCD Autoguider/Imagers $ 400-6,000
1995 Model LX50 Series $ 1,200-2,000 7" Maksutov-Cassegrain and 8" and 10"
Schmidt-Cassegrain, DC-powered variable
speed (to guide and center) telescopes.
60mm refracting and 114mm reflecting
telescopes customized for distribution
through speciality retailers and mass
merchandisers.
Saturn, Polaris, Infinity and $ 100-300
Telestar Models
7" Maksutov-Cassegrain computerized
telescope.
7" Model LX200 $ 3,000
1996 Epoch 2000 $ 150-200 Celestial and image processing software
for use with Meade's computerized
telescopes and certain other telescopes.
8" Schmidt-Cassegrain, DC-powered
replacement of the Company's original
model 2080 telescope.
8" Model LX10 $ 1,000
Computer-assisted telescope pointing
systems.
Magellan I and II $ 300-500
90mm Maksutov-Cassegrain telescope.
ETX Astro Telescope $ 500
The Company's introduction of a full
line of general consumer binoculars.
Binoculars $ 50-450
</TABLE>

Meade has developed and expanded its product line to include a full line of
telescopes and accessories for the beginning, intermediate and serious amateur
astronomer. Moreover, in addition to adding new products, the Company
continually refines and improves its existing products. Certain of Meade's
products are described in greater detail below:

LX Series Telescopes. Among the Company's most sophisticated products are
its Schmidt-Cassegrain and Maksutov-Cassegrain telescopes, which incorporate an
optical system that provides high-quality resolution, contrast and light
transmission. The model LX200 telescopes, available in 7, 8, 10, 12 and 16-inch
apertures, are the most popular of the Company's telescopes among serious
amateur astronomers. The LX200 telescopes feature a built-in computer library of
64,350 celestial objects. These objects are catalogued in the Company's
proprietary hand-held keypad electronic command center, which operates the
computerized control system for the LX200 telescopes. By entering any of the
celestial objects into the keypad, the telescope automatically locates and
tracks the selected object. The LX series telescopes represented approximately
2%

28
<PAGE> 30

of telescope units shipped and approximately 22% of the Company's net sales for
the nine months ended November 30, 1996.

Entry-Level Small Refracting and Reflecting Telescopes. Designed
specifically for the beginning to intermediate amateur astronomer or terrestrial
observer, the Company's less-expensive 60mm to 114mm refracting and reflecting
telescopes include some of the features of the more advanced telescopes at
economical prices. The Company also offers several variations of its small
refracting and reflecting telescopes for distribution on an exclusive basis of
selected models to specific specialty retailers. These telescope models comprise
the lower-price end of the Company's product line. Sales of these telescopes
comprised over 90% of the Company's telescope units shipped and approximately
50% of the Company's net sales for the nine months ended November 30, 1996.

ETX Series Telescopes. One of the Company's newest products is the ETX
Astro Telescope. The ETX is a Maksutov-Cassegrain telescope that has opened new
markets for beginning, intermediate and serious amateur astronomers by
permitting, for the first time, the purchase of a high-quality, portable
instrument of sufficient aperture to enable high resolution observation of
celestial and terrestrial objects at a reasonable price. There is currently a
four-month back-order for the ETX.

Starfinder Telescopes. The Starfinder Equatorial/Dobsonian Reflecting
telescopes were introduced by the Company beginning in 1992 and have been well
received by the serious amateur market. These telescopes are economically priced
and offer views of a wide range of celestial objects. The Starfinder series of
telescopes represented approximately 1% of telescope units shipped and
approximately 4% of the Company's net sales for the nine months ended November
30, 1996.

CCD Autoguider/Imagers. Another of the Company's newest product lines is
its CCD Autoguider/ Imagers. CCD technology allows users to create and transfer
high-resolution astronomical digital images directly from their telescope to a
home personal computer. This product has become increasingly popular as an
alternative to traditional astrophotography using conventional photographic
equipment, which requires longer exposure times. The Company's CCD
Autoguider/Imagers and related products represented approximately 2.0% of the
Company's net sales for the nine months ended November 30, 1996.

Binoculars. The Company recently introduced a complete line of consumer
binoculars that will initially be sold through the Company's existing
distribution network. The binoculars sold by the Company are purchased from
manufacturers outside the United States.

Accessories. The Company also offers accessories for each of its telescope
series which range from additional eyepieces and camera adapters to celestial
observation software. Approximately 250 accessory products are currently
available from the Company. Sales of accessories represented approximately 9% of
the Company's net sales for the nine months ended November 30, 1996.

SALES AND MARKETING

The Company's telescopes and accessories are sold through a domestic
network of mail order dealers, specialty retailers and mass merchandisers and
through an international network of foreign distributors. The Company's high-end
products are generally sold through mail order dealers or single and multiple
location specialty retailers, while Meade's less-expensive products are sold in
a similar manner but are also sold through mass merchandisers. The Company
maintains direct contact with its larger domestic dealers and foreign
distributors through the Company's sales professionals. A network of independent
representatives is used to maintain contact with its smaller specialty
retailers.

The Company's sales force works closely with its dealers, specialty
retailers, distributors and mass merchandisers on product quality, technical
knowledge and customer service. The Company employs five persons in sales
positions, all of whom have significant industry experience. These individuals
advise the Company's specialty retailers about the quality features of the
Company's products and provide answers to questions from specialty retailers as
well as directly from amateur astronomers. The Company stresses service to both
its customers and end users by providing marketing assistance in the form of
hang-tags, catalogue layouts and other print media and dedicated toll free
customer service telephone numbers. The Company

29
<PAGE> 31

believes toll free telephone numbers help reduce the number of product returns
from end users who are generally unfamiliar with the assembly and operation of
telescopes. In an effort to further simplify assembly and use of the Company's
products, Meade pre-assembles a substantial portion of its telescopes prior to
packaging. See "Business -- Competitive Strengths -- Superior Customer Service."
The Company's products are regularly advertised in most major domestic and
international telescope and astronomy-related magazines and periodicals with
comprehensive, full color, technically informative advertisements which present
a consistent message of innovation and quality about the Company and its
products. The Company's dedication to providing a high level of customer service
is one factor that management believes sets Meade apart from its competition.

In an effort to gain additional expertise in the binocular market, the
Company recently hired R. Daniel George, the Company's Vice President -- Sports
Optics, from Bushnell, where he worked for 18 years in several senior sales
management positions.

The chart below shows the distribution of the Company's net sales for the
fiscal years ended February 28, 1994 and 1995, and February 29, 1996, and for
the nine months ended November 30, 1996, based on dollar value by the type of
distribution channel employed. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Overview,"
"Business -- Competitive Strengths -- Broad Distribution Network" and
"Business -- Growth Strategy -- Expansion of Distribution Network."

[CHART]

CUSTOMERS

The Company markets its products domestically through a network of mail
order dealers, specialty retailers and mass merchandisers and internationally
through a network of foreign distributors. Included among the Company's
customers are the following retail outlets, mass merchandisers and foreign
distributors: The Nature Company, Natural Wonders, Service Merchandise, MIC
International Corp. (Japan), Astrocom GmbH (Germany), Wal-Mart, J.C. Penney and
Discovery Channel Stores. Generally, other than the recent addition of mass
merchandisers such as Service Merchandise and Wal-Mart, the Company's major
customers have not materially changed during the past three fiscal years.

30
<PAGE> 32

During fiscal 1996, the Company sold its products to mail order dealers and
to more than 500 specialty retailers and mass merchandisers which offer Meade's
products in over 1,000 retail store outlets. During that period, The Nature
Company, the Company's largest customer, accounted for approximately 12.4% of
the Company's net sales. No other customer has accounted for more than 10% of
the Company's net sales during the last three fiscal years. The Company's seven
largest customers, in the aggregate, accounted for approximately 47.0% of the
Company's net sales in fiscal 1996. See "Risk Factors -- Customer
Concentration." Discovery Communications, Inc., the parent company of Discovery
Channel Stores, has acquired The Nature Company. The Company does not anticipate
any material change in its relationship with or sales to The Nature Company as a
result of the acquisition of The Nature Company by Discovery Communications,
Inc.

OPERATIONS

Facilities. The Company's manufacturing and corporate operations are
located in a 57,000 square foot building in Irvine, California. The Company also
leases a separate 27,000 square foot distribution center in Irvine, California.
The Company has executed an agreement to consolidate and expand its operations
into a new 161,000 square foot facility also located in Irvine, California.

Materials and Supplies. The Company purchases high grade optical glass in
order to avoid imperfections that can degrade optical performance. Lenses and
mirrors for the Company's domestically manufactured telescopes are individually
polished and hand-figured by a master optician to achieve a high level of
resolution. The Company purchases metal telescope components from numerous
foundries, metal stamping and metal working companies. The Company's LX200
series telescopes require additional installation of the computerized drive and
celestial object database circuit board. The components of the board are
purchased from various suppliers and assembled by third party vendors and by
certain of the Company's manufacturing personnel. The boards are installed at
the Company's manufacturing facility and undergo a rigorous burn-in period prior
to shipment to customers.

Polishing and Hand Figuring. After a Schmidt-Cassegrain,
Maksutov-Cassegrain, ED-refractor or Newtonian glass surface is fine ground, the
mirror or lens is polished for up to 16 hours to obtain full transmission or
reflectivity. It is at this point that the Company's opticians perform the final
lens or mirror shaping (a process called figuring).

Optical Testing. As each of the Company's ED-refractor, Maksutov-Cassegrain
optical set, Schmidt-Cassegrain optical set, or parabolic Newtonian primary
mirror progresses through the grinding, polishing and hand-figuring stages of
development, it is repeatedly tested and retested for irregularities, smoothness
of figure and correction.

Optical Alignment and Centration. Finished, individually-matched
Maksutov-Cassegrain and Schmidt-Cassegrain optical sets and matched ED-refractor
doublet objective lenses are sent to the optical alignment and centration
department, where each optical set is placed into a special optical tube that
permits rotation of the optical elements about their optical axes. With optimal
orientation fixed, each optics set is placed into machined housings of an
optical tube or collimation lens cell. The optical system is once again tested
and only after passing this final test is an optical tube system ready to be
used.

Most of the Company's less-expensive telescopes are manufactured
exclusively for the Company in Taiwan. Since 1990, the Company has worked
closely with the Taiwanese Factory, developing proprietary telescope designs and
instructing the Taiwanese Factory's personnel in the production of telescopes
that meet the Company's quality standards. In January 1995, in order to assure a
reliable flow of products to meet the Company's increasing requirements, and in
order to ensure the Company would be able to exert sufficient control over the
manufacturing process and thus ensure that its quality standards are maintained,
the Company and the Taiwanese Factory entered into a supply agreement wherein
the Taiwanese Factory agreed to manufacture telescopes exclusively for sale
through Meade and wherein Meade agreed to purchase essentially all of its
less-expensive telescopes from the Taiwanese Factory. The Company owns the
majority of the designs and optical machine tooling used by the Taiwanese
Factory and regularly sends manufacturing and

31
<PAGE> 33

engineering personnel to the manufacturing facility in Taiwan to ensure that
high quality telescopes are produced.

COMPETITION

The telescope and binocular industries are highly competitive and sensitive
to consumer needs and preferences. In the telescope market, Meade competes in
the United States and Canada with Celestron, Bushnell, Tasco and Simmons and, to
a lesser extent, with other significantly smaller companies which service niche
markets. In Europe and Japan, the Company competes primarily with Celestron and
Vixen Optical Industries, Ltd. and with other smaller regional telescope
importers and manufacturers. In addition, some of the Company's current and
potential competitors in the telescope market may possess greater financial or
technical resources and competitive cost advantages due to a number of factors,
including, without limitation, lower taxes and substantially lower costs of
labor associated with manufacturing.

In the binocular market, which is generally more competitive than the
telescope market, with a greater number of competitors at each price point, the
Company competes primarily with Bushnell, Nikon Inc., Canon Inc., Minolta
Camera, Co., Ltd., Pentax Corporation, Tasco, Simmons and various smaller
manufacturers and resellers. Many of these competitors in the binocular market
have significantly greater brand name recognition and financial and technical
resources than those of the Company, and many have long-standing positions,
customer relationships and established brand names in their respective markets.
See "Risk Factors -- Competition."

EMPLOYEES

As of December 31, 1996, Meade had 240 full-time employees. The Company
believes that it offers competitive compensation and other benefits and that its
employee relations are good. None of the Company's employees is represented by a
union. The success of the Company's future operations depends in large part on
the Company's ability to attract and retain highly skilled technical, marketing
and management personnel. There can be no assurance that the Company will be
successful in attracting and retaining key personnel.

In order to enable its employees to share in the Company's growth and
prosperity, Meade established the ESOP, effective March 1, 1996. The ESOP
provides participating employees an opportunity to receive beneficial ownership
of Meade's Common Stock.

PROPERTIES

The Company leases a 57,000 square foot manufacturing and corporate
facility and a separate 27,000 square foot distribution center, each located in
Irvine, California. The lease for the manufacturing and corporate facility
expires in March 2000 and the lease for the distribution center expires in
October 1997. In December 1996, the Company executed a ten year lease agreement
for a new 161,000 square foot facility also located in Irvine, California that
the Company expects to occupy in the third quarter of fiscal year 1998. The
Company believes there will be no material expenses incurred in connection with
the termination of the Existing Leases because (i) the Company intends to
sublease its manufacturing and corporate facility or pay a fee to terminate the
lease (such fee is not expected to exceed $75,000) and (ii) the distribution
facility lease terminates in October 1997.

LITIGATION

The Company is involved from time to time in litigation incidental to its
business. Management believes that the outcome of current litigation will not
have a material adverse effect on the Company.

Prior to the reacquisition of the Company by certain members of its senior
management, Meade agreed to be bound by the provisions of an order ("Order") of
the United States Federal Trade Commission ("FTC") prohibiting the Company from
making certain acquisitions. The Order provides that Meade shall not acquire,
without the prior approval of the FTC, any stock, equity interest or assets,
other than purchases of manufactured product in the ordinary course of business,
of any company engaged in the manufacture or sale of Schmidt-Cassegrain
telescopes with apertures of 8 to 11 inches in the United States. The Order is
effective until August 30, 2001.

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<PAGE> 34

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The Board of Directors is divided into three classes: Class I, Class II and
Class III. After his initial term, each director serves for a term ending after
the third annual meeting following the annual meeting at which such director is
elected and until his successor is elected. The terms of office of directors in
Class I, Class II and Class III end after the annual meetings of stockholders of
the Company in 1998, 1999 and 2000, respectively. See "Description of Capital
Stock -- Application of the California General Corporation Law to Delaware
Corporations." The following table sets forth information for the directors,
executive officers and certain key employees of the Company as of November 30,
1996:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- --- --------------------------------------------------
<S> <C> <C>
John C. Diebel................... 53 Chairman of the Board and Chief Executive Officer
Steven G. Murdock................ 45 President and Chief Operating Officer, Director
Joseph A. Gordon, Jr............. 46 Senior Vice President of North American Sales,
Director
Ronald Ezra...................... 46 Chief Engineer
Brent W. Christensen............. 37 Vice President -- Finance and Chief Financial
Officer
Kenneth Baun..................... 48 Vice President -- Engineering
Robert Wood...................... 35 Vice President -- Manufacturing
R. Daniel George................. 51 Vice President -- Sports Optics
Timothy C. McQuay(1)(2)(3)....... 45 Future Director
Harry L. Casari(1)(2)(3)......... 60 Future Director
</TABLE>

- ---------------
(1) Member of the Compensation Committee

(2) Member of the Audit Committee

(3) Each individual named as a Future Director in the table has been elected as
a Director of the Company effective upon the completion of this Offering and
has consented to be named as such herein (collectively the "Future
Directors").

Mr. Casari will be a Class I director, Messrs. Gordon and McQuay will be
Class II directors and Messrs. Diebel and Murdock will be Class III directors.

John C. Diebel founded Meade Instruments Corp. in 1972. He has been the
Chairman of the Board and Chief Executive Officer of the Company for the
majority of the time since December 1975. Prior to founding the Company, Mr.
Diebel worked as an engineer for TRW Inc. and Hughes Aircraft Co. Mr. Diebel
graduated from the California Institute of Technology with BS and MS degrees in
electrical engineering and received his Ph.D. degree in electrical engineering
from the University of Southern California.

Steven G. Murdock, a director of the Company since April 1996, has been the
Company's President and Chief Operating Officer since October 1990. From May
1980 to October 1990, Mr. Murdock was the Company's Vice President of Optics.
From November 1968 to May 1980, Mr. Murdock worked as the optical manager for
Coulter Optical, Inc., an optics manufacturer. Mr. Murdock received his BS
degree in business administration from California State University at
Northridge.

Joseph A. Gordon, Jr., a director of the Company since April 1996, has been
the Company's Senior Vice President of North American Sales since June 1995.
From December 1984 to June 1995, he worked as the Company's Vice President of
North American Sales. From January 1981 to December 1984, Mr. Gordon was the
Vice President of Sales at Celestron. Mr. Gordon graduated from the University
of Cincinnati with a BS degree in marketing.

Ronald Ezra has been the Company's Chief Engineer since June 1995. From
1976 to June 1995, Mr. Ezra held various positions at the Company including
Project Engineer, Manufacturing Manager and Vice President -- Engineering. Mr.
Ezra received his BS degree in electrical engineering from California State
University at Long Beach.

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<PAGE> 35

Brent W. Christensen has been the Company's Vice President -- Finance since
June 1995 and Chief Financial Officer since April 1996. From August 1993 to June
1995, he worked as the Company's controller. Mr. Christensen is a Certified
Public Accountant, and from January 1985 to August 1993, he worked as an audit
manager with Ernst & Young LLP. Mr. Christensen received his BA degree in
business administration from California State University at Fullerton.

Kenneth Baun has been the Company's Vice President -- Engineering since
June 1995. From March 1995 to June 1995, he worked as an engineering manager for
the Company. From 1991 to 1995, Mr. Baun was the President of Summit Instruments
Corp., a producer of disk drive test equipment. In addition, from 1973 to 1980,
Mr. Baun worked as an engineering department manager at UNISYS. Mr. Baun
received his BA degree in electrical engineering and his MS degree in computer
science from the University of California at Los Angeles.

Robert Wood has been the Company's Vice President -- Manufacturing since
June 1995. From March 1991 to June 1995, he was the Company's Manager-Optics.
From October 1988 to March 1991, he worked as a project engineer for the
Company. Mr. Wood received his BS degree in electronics engineering technology
from Brigham Young University.

R. Daniel George has been the Company's Vice President -- Sports Optics
since February 1996. From 1978 to February 1996, he was employed by Bushnell
Optical Co., holding several sales management positions including regional sales
manager and sales planning manager. Mr. George received his BS degree in
Business Administration from California State University at Long Beach.

Timothy C. McQuay has been elected to serve on the Board of Directors
effective upon the completion of this Offering. Mr. McQuay has been a partner
with Crowell, Weedon & Co. since May 1995, and has served as Managing
Director -- Corporate Finance since October 1994. See "Certain Transactions" and
"Underwriting." From May 1993 to October 1994, Mr. McQuay served as Vice
President, Corporate Development with Kerr Group, Inc., a New York Stock
Exchange listed plastics manufacturing company. From May 1990 to May 1993, Mr.
McQuay served as Managing Director -- Merchant Banking with Union Bank. He is a
director of Keystone Automotive Industries, Inc. Mr. McQuay received his AB
degree in economics from Princeton University and his MBA degree in finance from
the University of California at Los Angeles.

Harry L. Casari has been elected to serve on the Board of Directors
effective upon the completion of this Offering. Mr. Casari is a Certified Public
Accountant and private investor. Mr. Casari worked at Ernst & Young, LLP from
1969 until 1994 when he retired as Partner. He is a director of Cohu, Inc. and
Mail Boxes, Etc. Mr. Casari received his BS degree in business administration
from the University of Denver.

DIRECTORS

The Certificate of Incorporation divides the Board of Directors into three
classes of directors serving staggered three-year terms. As a result,
approximately one-third of the Board of Directors will be elected at each annual
meeting of stockholders. All directors hold office until their respective terms
expire and until their successors have been duly elected and qualified or until
such director's earlier resignation or removal. Officers serve at the discretion
of the Board of Directors. See "Management -- Directors, Executive Officers and
Key Employees," and "Description of Capital Stock -- Application of the
California General Corporation Law to the Company."

COMMITTEES OF THE BOARD OF DIRECTORS

The Company will have an Audit Committee and a Compensation Committee, each
of which will be comprised of outside directors. The Audit Committee's functions
will include recommending to the Board of Directors the engagement of the
Company's independent accountants, reviewing with such accountants the plan and
results of their examination of the Financial Statements. The Compensation
Committee will review and make recommendations with respect to compensation of
officers and key employees, including the grant of options or other awards under
the Company's Stock Incentive Plan. See "Management -- Benefit Plans -- 1997
Stock Incentive Plan."

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<PAGE> 36

DIRECTORS' FEES

Directors who also are employees of the Company are reimbursed for expenses
incurred in attending Board or Committee meetings but do not otherwise receive
compensation for serving as directors of the Company. Each director who is not
an employee of the Company is entitled to receive (i) an annual fee of $5,000
for his services as a director, (ii) a fee of $750 for each Board or Committee
meeting attended, (iii) 5,000 options to purchase Common Stock upon his initial
election to the Board together with an additional grant of 5,000 options on the
date of each annual meeting of stockholders preceeding a year in which such
director will continue in office and (iv) reimbursement for expenses incurred in
attending Board or Committee meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1996, all matters concerning executive officer compensation
were addressed by the entire Board of Directors. The Company did not have a
Compensation Committee in fiscal 1996. John C. Diebel was both a director and an
executive officer of the Company during the fiscal year ended February 29, 1996.
See "Management -- Directors, Executive Officers and Key Employees."

EXECUTIVE COMPENSATION

The following table provides certain summary information concerning
compensation paid to the Company's Chief Executive Officer and all executive
officers of the Company who were serving as executive officers during the fiscal
year ended February 28, 1997 and who earned over $100,000 in compensation during
such period (together with the Company's Chief Executive Officer, the "Named
Officers").

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(1)
-------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(2)
- -------------------------------------------------- ---- ------- ------- ---------------
<S> <C> <C> <C> <C>
John C. Diebel.................................... 1997 402,000(3) 173,400 2,100
Chairman of the Board and Chief Executive
Officer
Steven G. Murdock................................. 1997 226,000 103,700 --
President and Chief Operating Officer
Joseph A. Gordon, Jr. ............................ 1997 137,000 22,780 1,300
Senior Vice President of North American Sales
</TABLE>

- ---------------

(1) The aggregate amount of perquisites and other personal benefits, securities
or property paid to each of the Named Officers during fiscal 1997 did not
exceed the lesser of 10% of such officer's total annual salary and bonus for
fiscal 1997 or $50,000. Therefore, any such amounts are not included in the
table.

(2) Contribution by the Company in the name of the individual under the
Company's 401(k) Plan.

(3) Mr. Diebel's annual base salary for fiscal 1998 will be $295,000, and he
will be eligible for a bonus to be determined by the Compensation Committee.
See "Management -- Employment Agreements."

BENEFIT PLANS

Employee Stock Ownership Plan. The Board of Directors adopted the ESOP
effective March 1, 1996. The purpose of the ESOP is to enable participating
employees to share in the growth and prosperity of the Company and to provide an
opportunity for participating employees to accumulate capital for their future
economic advantage by receiving beneficial ownership of the Company's stock in
proportion to their relative compensation. The ESOP is intended to be a stock
bonus plan that is qualified under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). Except for certain officers of the Company and
their families, all employees who have completed at least 1,000 hours of service
on an annual basis are eligible to participate in the ESOP. Generally, a
participant becomes fully vested in contributions to the ESOP upon completion of
five years of service with the Company or its affiliates (including service
prior to the adoption of the ESOP).

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<PAGE> 37

To establish the ESOP, the Company borrowed from certain lending
institutions and raised capital through the sale of its Redeemable Preferred
Stock, and then loaned $11.0 million to the ESOP to allow it to purchase
1,500,000 shares of the Company's Series B Common Stock from the Company's
stockholders. See "Certain Transactions." As the Company makes contributions to
the ESOP, the ESOP pays its indebtedness owed to the Company. As of November 30,
1996, the outstanding amount of the ESOP's indebtedness to the Company was
approximately $10.0 million. Distributions from the ESOP are generally made to
participants only following termination of employment. Shares of Common Stock
allocated to participants' accounts are voted in the manner directed by such
participants, and the ESOP Committee directs the voting of unallocated shares
and shares for which participants do not provide voting instructions.

1997 Stock Incentive Plan. In February 1997, the Company and its
stockholders adopted the Company's 1997 Stock Incentive Plan (the "Plan"). The
Plan provides a means to attract and retain key employees (including officers,
whether or not directors) of the Company and its subsidiaries and promote the
success of the Company.

Under the Plan, awards consist of any combination of stock options
(incentive or nonqualified), restricted stock, stock appreciation rights
("SARs") and performance share awards. The number of shares of Common Stock that
may be issued under the Plan is 750,000. Awards under the Plan may be made to
any officer or key employee of the Company and to consultants to the Company
whether or not such consultants are employees.

Participants in the Plan are selected by the Compensation Committee. The
Compensation Committee is selected by the Board of Directors and is empowered to
determine the terms and conditions of each award made under the Plan, subject to
the limitations that the exercise price of incentive stock options cannot be
less than the fair market value of the Common Stock on the date of grant (110%
if granted to an employee who owns 10% or more of the Common Stock), and no
incentive stock option can be granted to anyone other than an employee of the
Company or its subsidiaries. Non-qualified stock options may be granted under
the Plan with an exercise price determined by the Compensation Committee.
Options granted under the Plan may be exercised as determined by the
Compensation Committee, but in no event after ten years from the date of grant.
Incentive stock options that are granted to an employee who owns 10% or more of
the Common Stock may not be exercised after five years from the date of grant.

Restricted stock awards may be granted on the basis of such factors as the
Compensation Committee deems appropriate. Each restricted stock award agreement
shall specify the number of shares of Common Stock to be issued, the date of
such issuance, the price, if any, to be paid for such shares by the participant,
whether and to what extent the cash consideration paid for such shares shall be
returned upon a forfeiture and the restrictions imposed on such shares. Shares
subject to restricted stock awards are nontransferable until such shares have
vested and are subject to a risk of forfeiture unless certain conditions are
satisfied.

SARs may be granted in connection with stock options or separately. SARs
granted in connection with stock options will provide for payments to the holder
based upon increases in the price of the Common Stock over the exercise price of
the related option on the exercise date. The SARs may provide that the holder of
the SARs may exercise the SARs or the option in whole or in part. The
Compensation Committee may elect to pay SARs in cash or in Common Stock or in a
combination of cash and Common Stock. The Compensation Committee may also grant
limited SARs exercisable only upon or in respect of a change in control or any
other specified event ("Limited SARs"). The Limited SARs may relate to or
operate in tandem with other SARs, options or other awards under the Plan.

Performance share awards may be granted on the basis of such factors as the
Compensation Committee deems appropriate. Generally, these awards will be based
upon specific agreements and will specify the number of shares of Common Stock
subject to the award, the price, if any, to be paid for such shares by the
participant and the conditions upon which the issuance to the participant will
be based.

Special performance-based share awards ("Performance-Based Awards") may
also be granted to executive officers of the Company. The Performance-Based
Awards will be based upon the degree of achievement of certain performance goals
relative to pre-established levels for the Company as selected by the
Compensation Committee in its discretion.

36
<PAGE> 38

Options and SARs, which have not yet become exercisable, will lapse upon
the date a participant is no longer employed by the Company for any reason.
Options and SARs which have become exercisable must be exercised within three
months after such date if the termination of employment was for any reason other
than retirement, total disability, death or discharge for cause. In the event a
participant is discharged for cause, all options and SARs shall lapse
immediately upon such termination of employment. If the termination of
employment was due to total disability or death, the options and SARs, which are
exercisable on the date of such termination, must be exercised within twelve
months of the date of such termination or such shorter period provided in the
award agreement. If the termination of employment was due to retirement, the
non-qualified stock options, which are exercisable on the date of such
termination, must be exercised within twelve months of such date and the
incentive stock options, which are exercisable on the date of such termination,
must be exercised within three months of such date, or such shorter periods as
may be provided in the award agreement. Shares subject to restricted stock
awards that have not become vested upon the date a participant is no longer
employed by the Corporation for any reason will be forfeited in accordance with
the terms of the related award agreements. With respect to performance share
awards, the Committee may provide for full or partial credit in the event the
participant is no longer employed by the Company for any reason.

The Plan also provides for the automatic granting of stock options to
non-employee directors. Each time a new non-employee director is elected, a
stock option to purchase 5,000 shares of Common Stock will be automatically
granted to such non-employee director at the then fair market value of the
Common Stock. In addition, non-employee directors will receive an additional
grant of 5,000 options on the date of each annual meeting of stockholders
(commencing in 1998) preceding a year in which such director will continue in
office. All options granted to non-employee directors will be non-qualified
stock options. The option exercise price will be the fair market value of the
Common Stock as of the date of the grant.

In the event the stockholders of Company approve the dissolution or
liquidation of the Company, certain mergers or consolidations, or the sale of
substantially all of the business assets of the Company, unless prior to such
event the Board of Directors determines that there shall be either no
acceleration or limited acceleration of awards, each option and related SAR
shall become immediately exercisable, restricted stock shall immediately vest
and the number of shares covered by each performance share award shall be issued
to the participant.

On March 9, 1997, the Board of Directors of the Company granted, subject to
completion of the Offering, stock options to purchase 230,000 shares of Common
Stock (the "Options") to nine of the Company's employees. The exercise price of
the Options shall be equal to the initial public offering price set forth on the
cover page of this Prospectus, and the Options shall vest as follows:
twenty-five percent (25%) of each stock option grant shall vest on March 9,
1998, and the remainder shall vest monthly in substantially equal monthly
installments over the succeeding thirty-six months. Mr. Joseph Gordon, Jr.,
Senior Vice President of North American Sales, was granted 100,000 of the
Options, and Mr. Brent Christensen, Vice President -- Finance and Chief
Financial Officer was granted 25,000 of the Options. No other executive officer
has been granted stock options.

EMPLOYMENT AGREEMENTS

The Company has employment agreements with Messrs. John C. Diebel, Steven
G. Murdock, Joseph A. Gordon, Jr., and Ronald Ezra (the "Senior Management").
Each of the employment agreements has a term of one year which is automatically
extended on a daily basis such that the remaining term of the agreement shall at
all times be one full year. The agreements provide for the payment of an annual
base salary of $400,000 to Mr. Diebel, $225,000 to Mr. Murdock, $125,000 to Mr.
Gordon and $100,000 to Mr. Ezra. The fiscal 1997 annual base salary for Mr. Ezra
has been reduced to $75,000. The fiscal 1998 annual base salary for Mr. Diebel
has been reduced to $295,000 and he will be eligible for a bonus to be
determined by the Compensation Committee. Annual base salaries will be reviewed
annually by the Company's Compensation Committee of the Board of Directors. The
Senior Management is also entitled to participate in and be covered by all
health, insurance, pension and other employee plans and benefits currently
established for the employees of the Company. In addition, the agreements
provide the Senior Management vacation benefits of three weeks per year and
reimbursement of all business expenses. If the Company terminates a Senior
Management

37
<PAGE> 39

member's employment without cause or as a result of a disability, or if a Senior
Management member terminates his employment under certain circumstances set
forth in the agreement, then the member of Senior Management shall be entitled
to continuation of employee benefits and salary continuation for a period equal
to the remainder of the term of his agreement. In addition, Senior Management
may not compete with the Company or solicit its customers, employees, agents or
independent contractors during the term of the agreement. The Company does not
currently have a bonus plan for its executive officers, however, the Company
intends to adopt such a plan for the 1998 fiscal year.

CERTAIN TRANSACTIONS

On April 23, 1996, pursuant to an Exchange Agreement among the Company and
Messrs. John C. Diebel, Steven G. Murdock, Joseph A. Gordon, Jr., and Ronald
Ezra (collectively, the "Stockholders"), the Stockholders exchanged their shares
of Common Stock for 2,571,361 shares of Series A Common Stock and 1,500,000
shares of Series B Common Stock in order to facilitate their sales of Series B
Common Stock to the ESOP. Immediately following such exchange, under the Meade
Redemption Agreement, among the Stockholders and the Company, the Company
repurchased in the aggregate 71,361 shares of Series A Common Stock from the
Stockholders, at the price of $3.50 per share (an aggregate purchase price of
$250,000), the fair value as determined by the Company after consultation with
the independent appraisal firm engaged to value the Series B Common Stock in
connection with the recapitalization of the Company. Such repurchase was
requested by the Stockholders to provide them with liquidity.

On April 23, 1996, the Company loaned the ESOP $11.0 million, which funds
were used by the ESOP to purchase a total of 1,500,000 shares of Series B Common
Stock from the Stockholders, at a price of $7.33 per share (an aggregate
purchase price of $11.0 million). This price was the fair market value of the
Series B Common Stock as determined by an independent appraisal firm which acted
as advisor to the ESOP. This transaction was structured in a manner intended to
permit any of the Stockholders who so elected to receive tax deferred treatment
on any gain from the sale under Section 1042 of the Code. The ESOP loan has a
ten-year term and bears interest at the rate of 6.0% per annum. Principal and
interest are due semi-annually, subject to the Company's making contributions to
the ESOP to fund the principal and interest payments.

In connection with the ESOP's purchase of the Stockholders' Series B Common
Stock, pursuant to a Securities Purchase Agreement ("Securities Purchase
Agreement"), dated April 23, 1996, the Company issued and sold 1,000 shares of
Redeemable Preferred Stock and a Series A Common Stock Warrant (the "Warrant")
for 1,000,000 shares of Series A Common Stock to Churchill for an aggregate
purchase price of $6.0 million. Churchill exercised the Warrant in full
immediately after the closing of the ESOP transaction. The amounts received by
the Company from the sale of the Redeemable Preferred Stock and the Warrant were
used to effect the recapitalization of the Company in connection with the ESOP
transaction. The Company and its shareholders have no relationship with
Churchill other than by virtue of Churchill's ownership of the Redeemable
Preferred Stock and shares of Series A Common Stock. In addition, the Company
paid Churchill a commitment fee of $180,000 in connection with Churchill's
investment.

In connection with the purchase of the Company by the Stockholders in 1991,
the Stockholders loaned $500,000 in the aggregate to the Company under
subordinated notes maturing on February 28, 1996 or in March 1996 at an interest
rate per annum equal to the "base" rate publicly announced by The First National
Bank of Boston plus 2.0%. In addition, Mr. John Diebel loaned $1.5 million to
the Company on July 8, 1993 for a term of one year which was then extended for
additional one-year periods on each of July 8, 1994 and July 8, 1995 at an
interest rate equal to 10.0% per annum. The proceeds from the foregoing notes
were used for working capital and repayment of other indebtedness of the
Company. On April 23, 1996, the Company repaid these subordinated notes,
together with all interest thereon.

Under Incentive Compensation Agreements ("Incentive Agreements"), between
the Company and each of Mr. Robert Wood and Mr. Brent W. Christensen, each of
Messrs. Wood and Christensen was entitled to a bonus payment from the Company in
the event of certain change-in-control transactions. Pursuant to Settlement
Agreements, dated April 22, 1996, the Company paid each of Mr. Wood and Mr.
Christensen a $150,000 bonus payment in exchange for termination of any future
rights under the Incentive Agreements. No

38
<PAGE> 40

payment was due under the Incentive Agreements in connection with the ESOP
transaction and resulting recapitalization.

As set forth in the Securities Purchase Agreement, certain members of the
Company's senior management received one-time contractual bonuses in an
aggregate amount of $340,000. Of such amount, the Named Officers received
$299,880 and a key employee, Ronald Ezra, received $40,120. See "Management --
Executive Compensation."

In connection with this Offering, the Company and Churchill entered into a
Letter Agreement, dated as of January 31, 1997, which provides, in part, that
upon the completion of this Offering, Churchill may reimburse the Company for up
to $400,000 of its expenses related to this Offering, depending upon various
factors set forth therein, including the number of shares sold in this Offering
and the Offering price of such shares.

Crowell, Weedon & Co., one of the Representatives of the Underwriters of
this Offering, provided certain financial advisory services to the Company in
connection with the recapitalization of the Company during fiscal 1997. Timothy
C. McQuay, a Future Director of the Company, is a partner with Crowell, Weedon &
Co. See "Management" and "Underwriters." The aggregate compensation for such
advisory services was approximately $300,000. In addition, Crowell, Weedon & Co.
will receive customary compensation for its services as an Underwriter in
connection with this Offering.

39
<PAGE> 41

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of January 31, 1997, as adjusted to
reflect the sale of the Common Stock offered hereby, for (i) each person who
beneficially owns more than 5% of the Common Stock, (ii) each of the directors,
Future Directors and Named Officers, (iii) all directors and executive officers
as a group and (iv) the Selling Stockholder.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
BEFORE THIS OFFERING NUMBER OF AFTER THIS OFFERING(1)
---------------------- SHARES ----------------------
NUMBER PERCENTAGE OFFERED(1) NUMBER PERCENTAGE
--------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
John C. Diebel(2).......................... 1,275,000 25.5% -- 1,275,000 17.0%
Steven G. Murdock(2)(3).................... 762,500 15.3% -- 762,500 10.2%
Ronald Ezra(2)............................. 295,000 5.9% -- 295,000 3.9%
Joseph A. Gordon, Jr.(2)................... 167,500 3.4% -- 167,500 2.2%
Brent W. Christensen(2)(4)................. -- -- -- -- --
Timothy C. McQuay.......................... -- -- -- -- --
Harry L. Casari............................ -- -- -- -- --
Meade Instruments Corp. Employee Stock
Ownership Plan(2)(5)..................... 1,500,000 30.0% -- 1,500,000 20.0%
Churchill ESOP Capital Partners(6)......... 1,000,000 20.0% 870,000 130,000 1.7%
All current directors and executive
officers as a group (4 persons)(7)....... 2,500,000 50.0% -- 2,500,000 33.3%
</TABLE>

- ---------------
(1) Assumes no exercise of the Underwriters' over-allotment option.

(2) The address for all officers of the Company and the ESOP Committee is c/o
Meade Instruments Corp., 16542 Millikan Avenue, Irvine, California 92606.

(3) Does not include 1,500,000 shares held by the ESOP. Mr. Murdock is a member
of the ESOP Committee and disclaims beneficial ownership of any of the
shares owned by the ESOP. If the 1,500,000 shares owned by the ESOP were
included, Mr. Murdock would be deemed to beneficially own 2,262,000 shares,
or 45.3% before this Offering, and 2,262,000 shares, or 30.2% after this
Offering, respectively. Mr. Murdock is not a participant in the ESOP. See
footnote (5) below.

(4) Does not include 1,500,000 shares held by ESOP. Mr. Christensen is a member
of the ESOP Committee and, other than as a participant, disclaims beneficial
ownership of any of the shares owned by the ESOP. If the 1,500,000 shares
owned by the ESOP were included, Mr. Christensen would be deemed to
beneficially own 1,500,000 shares, or 30.0% before this Offering, and
1,500,000 shares, or 20.0% after this Offering, respectively. See footnote
(5) below.

(5) Common Stock held by the ESOP is voted by the trustee of the ESOP, Wells
Fargo Bank, N.A. (the "Trustee"), as directed by the ESOP Committee, except
that participants in the ESOP are entitled to direct the Trustee as to how
to vote shares allocated to their ESOP accounts. The ESOP Committee is
comprised of Steven G. Murdock, the Company's President and Chief Operating
Officer, Brent W. Christensen, the Company's Vice President -- Finance and
Chief Financial Officer, and Pamela Diebel Grossman, the Company's Director
of Administration and sister of John C. Diebel, the Company's Chairman of
the Board and Chief Executive Officer. (If the 1,500,000 shares owned by the
ESOP were included in the holdings of Ms. Grossman, she would be deemed to
beneficially own 1,500,000 shares, or 30.0% before this Offering, and
1,500,000 shares, or 20.0% after this Offering, respectively.) Mr. Murdock
and Ms. Grossman are not participants in the ESOP. Each of the members of
the ESOP Committee, other than as a participant with respect to Mr.
Christensen, disclaims beneficial ownership of any of the shares owned by
the ESOP. The Trustee's address is 707 Wilshire Boulevard, Los Angeles,
California 90017.

(6) The address for Churchill ESOP Capital Partners, A Minnesota Limited
Partnership is 2400 Metropolitan Centre, 333 South Seventh Street,
Minneapolis, Minnesota 55402.

(7) Does not include 1,500,000 shares held by the ESOP. Messrs. Murdock and
Christensen are members of the ESOP Committee and, other than as a
participant with respect to Mr. Christensen, each disclaims beneficial
ownership of any of the shares owned by the ESOP. If the 1,500,000 shares
owned by the ESOP were included, all directors and officers as a group would
be deemed to beneficially own 4,000,000, or 80.0% before this Offering, and
4,000,000 shares, or 53.3% after this Offering, respectively.

40
<PAGE> 42

DESCRIPTION OF CAPITAL STOCK

REINCORPORATION

The Company was originally incorporated in the State of California on
December 19, 1975. Prior to the effectiveness of this Registration Statement of
which this Prospectus is a part, the Company will reincorporate as a Delaware
corporation to be named Meade Instruments Corp. pursuant to a merger with and
into a newly-formed and wholly-owned Delaware subsidiary, with such Delaware
subsidiary to be the surviving corporation.

OUTSTANDING CAPITAL

As of the completion of this Offering, and after giving effect to the
reincorporation of the Company, the authorized capital stock of the Company
consists of two classes of capital stock, designated respectively, "Common
Stock" and "Preferred Stock." The Company is authorized to issue 20,000,000
shares of Common Stock, $.01 par value per share, and 1,000,000 shares of
Preferred Stock, $.01 par value per share. The summary description included
herein relating to the capital stock of the Company does not purport to be
complete. Reference is made to the Certificate of Incorporation of the Company,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, for a detailed description of the provisions thereof
summarized below.

COMMON STOCK

Holders of Common Stock are entitled to receive such dividends as may from
time to time be declared by the Board of Directors of the Company out of funds
legally available therefor. Holders of Common Stock are entitled to one vote per
share on all matters on which the holders of Common Stock are entitled to vote
and do not have any cumulative voting rights. The Board of Directors is divided
into three classes. See "Description of Capital Stock -- Certain Anti-Takeover
Effects -- Classified Board of Directors." Holders of Common Stock have no
preemptive, conversion, redemption or sinking funds rights. In the event of a
liquidation, dissolution or winding-up of the Company, holders of Common Stock
are entitled to share equally and ratably in the assets of the Company, if any,
remaining after the payment of all debts and liabilities of the Company and the
liquidation preference of any outstanding Preferred Stock. The outstanding
shares of Common Stock are, and the shares of Common Stock offered by the
Company hereby when issued will be, fully paid and nonassessable. The rights,
preferences and privileges of holders of Common Stock are subject to any series
of Preferred Stock that the Company may issue in the future. As of January 31,
1997, there were six holders of the Company's Common Stock.

PREFERRED STOCK

The Board of Directors is authorized to provide for the issuance of
Preferred Stock in one or more series and to fix the designations, preferences,
powers and relative, participating, optional and other rights, qualifications,
limitations and restrictions thereof, including the dividend rate, conversion
rights, voting rights, redemption price and liquidation preference, and to fix
the number of shares to be included in any such series. Any Preferred Stock so
issued may rank senior to the Common Stock with respect to the payment of
dividends or amounts upon liquidation, dissolution or winding-up, or both. In
addition, any such shares of Preferred Stock may have class or series voting
rights. Upon completion of this Offering, the Company will not have any shares
of Preferred Stock outstanding. Issuances of Preferred Stock, while providing
the Company with flexibility in connection with general corporate purposes, may,
among other things, have an adverse effect on the rights of holders of Common
Stock, may have the effect of delaying, deferring or preventing a change in
control of the Company without further action by the stockholders, may
discourage bids for the Company's Common Stock at a premium over the market
price of the Common Stock, and may adversely affect the market price of and the
voting and other rights of the holders of Common Stock. At present, the Company
has no plans to issue any of the Preferred Stock. As of January 31, 1997, there
was one holder of the Company's Preferred Stock.

41
<PAGE> 43

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is U.S. Stock
Transfer Corporation.

CERTAIN ANTI-TAKEOVER EFFECTS

The provisions of the Certificate of Incorporation and the Bylaws of the
Company (the "Bylaws") summarized in the succeeding paragraphs may be deemed to
have anti-takeover effects and may delay, defer or prevent a tender offer or
takeover attempt that a stockholder might consider to be in such stockholder's
best interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders. However, certain of the
following provisions may be limited or prohibited by the application of Section
2115 of the California General Corporation Law described below.

Classified Board of Directors. The Certificate of Incorporation divides
the Board of Directors into three classes of directors serving staggered
three-year terms. As a result, approximately one-third of the Board of Directors
will be elected at each annual meeting of stockholders.

The classification of directors and provisions in the Certificate of
Incorporation that limit the ability of stockholders to increase the size of the
Board of Directors, together with provisions in the Certificate of Incorporation
that limit the ability of stockholders to remove directors and that permit the
remaining directors to fill any vacancies on the Board, will have the effect of
making it more difficult for stockholders to change the composition of the Board
of Directors. As a result, two annual meetings of stockholders may be required
for the stockholders to change a majority of the directors, whether or not a
change in the Board of Directors would be beneficial to the Company and its
stockholders and whether or not a majority of the Company's stockholders
believes that such a change would be desirable.

Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Bylaws establish advance notice procedures with regard to
stockholder proposals and the nomination, other than by or at the direction of
the Board of Directors or a committee thereof, of candidates for election as
directors. The Company may reject a stockholder proposal or nomination that is
not made in accordance with such procedures.

Prohibition on Stockholder Action by Written Consent and Limitations on
Calling Stockholder Meetings. The Certificate of Incorporation and Bylaws
prohibit stockholder action by written consent in lieu of a meeting, and provide
that stockholder action can be taken only at an annual or special meeting of
stockholders. The Certificate of Incorporation provide that, subject to the
rights of holders of any series of Preferred Stock to elect additional directors
under specified circumstances, special meetings of stockholders can be called
only by the Board of Directors, the Chairman of the Board of Directors or the
Chief Executive Officer of the Company. Stockholders are not permitted to call a
special meeting or to require that the Board of Directors call a special meeting
of stockholders. Such provision may have the effect of delaying consideration of
a stockholder proposal until the next annual meeting unless a special meeting is
called by the Board of Directors, the Chairman of the Board or the Chief
Executive Officer of the Company.

Section 203 of the Delaware General Corporation Law. Subject to certain
exclusions summarized below, Section 203 of the Delaware General Corporation Law
("Section 203") prohibits any interested stockholder (an "Interested
Stockholder") from engaging in a "business combination" with a Delaware
corporation for three years following the date such person became an Interested
Stockholder. Interested Stockholder generally includes (i) any person who is the
beneficial owner of 15% or more of the outstanding voting stock of the
corporation and (ii) any person who is an affiliate or associate of the
corporation and who held 15% or more of the outstanding voting stock of the
corporation at any time within three years before the date on which such
person's status as an Interested Stockholder is determined. Subject to certain
exceptions a "business combination" includes, among other things: (i) any merger
or consolidation involving the corporation; (ii) the sale, lease, exchange,
mortgage, pledge, transfer or other disposition of assets having an aggregate
market value equal to 10% or more of either the aggregate market value of all
assets of the corporation determined on a consolidated basis or the aggregate
market value of all the outstanding stock of the corporation; (iii) any
transaction that results in the issuance or transfer by the corporation of any
stock of

42
<PAGE> 44

the corporation to the Interested Stockholder, except pursuant to a transaction
that effects a pro rata distribution to all stockholders of the corporation;
(iv) any transaction involving the corporation that has the effect of increasing
the proportionate share of the stock of any class or series, or securities
convertible into the stock of any class or series, of the corporation that is
owned directly or indirectly by the Interested Stockholder; and (v) any receipt
by the Interested Stockholder of the benefit (except proportionately as a
stockholder) of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation.

Section 203 does not apply to a business combination if (i) before a person
became an Interested Stockholder, the board of directors of the corporation
approved the transaction in which the Interested Stockholder became an
Interested Stockholder or the business combination, (ii) upon consummation of
the transaction that resulted in the person becoming an Interested Stockholder,
the Interested Stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commences (other than
certain excluded shares) or (iii) following a transaction in which the person
became an Interested Stockholder, the business combination is (a) approved by
the board of directors of the corporation and (b) authorized at a regular or
special meeting of stockholders (and not by written consent) by the affirmative
vote of the holders of at least two-thirds of the outstanding voting stock of
the corporation not owned by the Interested Stockholder.

APPLICATION OF THE CALIFORNIA GENERAL CORPORATION LAW TO THE COMPANY

If the Company's equity securities are held by less than 800 stockholders
and a majority of its outstanding shares are held by persons with California
addresses and the Company has operational characteristics that indicate that it
has significant contacts to California, the Company may be subject to Section
2115 of the California Corporations Code. In such event, the Company would be
subject to certain key provisions of the California General Corporation Law,
including, without limitation, those provisions relating to the number of
directors to be elected each year (all directors would be required to be elected
each year under California law applicable to companies with less than 800
beneficial holders of their equity securities), the stockholders' right to
cumulate votes at elections of directors (cumulative voting would be mandatory
under California law applicable to companies with less than 800 beneficial
holders of their equity securities), the stockholders' right to remove directors
without cause (which under California law is subject to the stockholders' right
to cumulative voting), the Company's ability to indemnify its officers,
directors and employees (which generally is more limited in certain situations
in California than in Delaware), the Company's ability to make distributions,
dividends or repurchases (which generally is more restrictive in California than
in Delaware), inspection of corporate records (which is generally more available
in California than in Delaware), approval of certain corporate transactions, and
dissenters' rights. After consultation with the Underwriters of this Offering,
the Company anticipates that it will have more than 800 stockholders following
the completion of this Offering.

LIMITATION OF LIABILITY OF DIRECTORS

The Certificate of Incorporation provides that a director will not be
personally liable for monetary damages to the Company or its stockholders for
breach of fiduciary duty as a director, except to the extent such exemption for
liability or limitation thereof is not permitted under the Delaware General
Corporation Law (i.e., liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for paying a dividend or approving a stock repurchase in violation of
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit).

While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies, such as an injunction or
rescission based on a director's breach of such director's duty of care.

43
<PAGE> 45

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Certificate of Incorporation provides that each person (and the heirs,
executors, or administrators of such person) who was or is a party or is
threatened to be made a party to, or is involved in any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, by reason of the fact that such person is or was a director or
officer of the Company or is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, will be indemnified and held harmless by the Company to the
fullest extent permitted by the Delaware General Corporation Law. The
Certificate of Incorporation further provides that the right to indemnification
includes the right to be paid by the Company for expenses incurred in connection
with any such proceeding in advance of its final disposition to the fullest
extent permitted by the Delaware General Corporation Law, and that the right to
indemnification conferred thereunder is deemed a contract right.

The Certificate of Incorporation further provides that the Company may, by
action of its Board of Directors, provide indemnification to such of the
employees and agents of the Company and such other persons serving at the
request of the Company as employees or agents of another corporation,
partnership, joint venture, trust or other enterprise to such extent and to such
effect as is permitted by the Delaware General Corporation Law and the Board of
Directors.

Pursuant to the Certificate of Incorporation, the Company has the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss incurred by such person in any such capacity or
arising out of his or her status as such, whether or not the Company would have
the power to indemnify such person against such liability under the Delaware
General Corporation Law.

The Certificate of Incorporation provides that (i) the rights and authority
described above are not exclusive of any other right that any person otherwise
may have or acquire and (ii) no amendment, modification or repeal of the
Certificate of Incorporation, or adoption of any additional provision of the
Certificate of Incorporation or the Bylaws or, to the fullest extent permitted
by the Delaware General Corporation Law, any amendment, modification or repeal
of law will eliminate or reduce the effect of the provisions in the Certificate
of Incorporation limiting liability or indemnifying certain persons or adversely
affect any right or protection then existing thereunder in respect of any acts
or omissions occurring prior to such amendments, modifications, repeal or
adoption.

The Company has entered into indemnification agreements with its directors
and officers that require the Company to indemnify the directors and officers to
the fullest extent permitted by applicable provisions of the Delaware General
Corporation Law and, to the extent necessary, the California General Corporation
Law.

The Company believes the foregoing provisions are necessary to attract and
retain qualified persons as directors and officers.

44
<PAGE> 46

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering and assuming that the over-allotment option
granted to the Underwriters is not exercised, the Company will have 7,500,000
shares of Common Stock outstanding. The 2,500,000 shares of Common Stock sold by
the Company and the 870,000 shares of Common Stock sold by the Selling
Stockholder in the Offering will be freely tradeable in the public market
without restriction or limitation under the Securities Act. Although the
remaining 4,130,000 shares of Common Stock will be deemed "restricted"
securities within the meaning of the Securities Act, the Company believes that
2,500,000 of such shares will be available for sale under Rule 144 of the
Securities Act ("Rule 144"). The following discussion is based on Rule 144, as
amended effective April 29, 1997.

In general, under Rule 144, a person (or persons whose shares are
aggregated) who has beneficially owned "restricted" securities for at least one
year, including persons who may be deemed "affiliates" of the Company (as the
term is defined under the Securities Act), would be entitled to sell (in
accordance with the provisions specified in Rule 144), within any three-month
period, that number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of Common Stock of the Company (75,000 shares
immediately after the Offering) or (ii) the average weekly trading volume of the
then outstanding shares of Common Stock during the four calendar weeks preceding
each such sale. Sales under Rule 144 are also subject to certain requirements as
to the manner of sale, notice and availability of current public information
about the Company.

An "affiliate" of the Company may sell securities that are not "restricted"
without regard to the period of beneficial ownership but subject to the volume
limitations described above and other conditions of Rule 144, subject to
restrictions on affiliates. A person who is not deemed an "affiliate" of the
Company (and has not been such for at least 90 days) and who has beneficially
owned his or her shares for at least two years, would be entitled to sell such
shares under Rule 144 without regard to the volume limitations described above,
manner of sale provisions, notice requirements or availability of public
information. As defined in Rule 144, an "affiliate" of an issuer is a person
that directly or indirectly controls, or is controlled by, or is under common
control with such issuer.

The Company, each of its executive officers and directors and the ESOP have
agreed that they will not, directly or indirectly, offer, sell, offer to sell,
contract to sell, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, grant of any option
to purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exercisable or exchangeable for, any shares of
Common Stock without the prior written consent of Morgan Keegan & Company, Inc.
for a period of 270 days from the date of this Prospectus. In addition, the
remaining 130,000 shares of Common Stock held by the Selling Stockholder after
the Offering shall become eligible for sale in the public market 180 days after
the date of this Prospectus, subject to the holding period, volume and other
restrictions of Rule 144. See "Underwriting" and "Principal and Selling
Stockholders."

Prior to this Offering, there has been no market for the Common Stock and
no prediction can be made as to the effect, if any, that future sales of shares,
or the availability of such shares for future sale, will have on the market
price for the Common Stock prevailing from time to time. Nevertheless, sales by
the existing stockholders of substantial amounts of the Common Stock in the
public market could adversely affect prevailing market conditions.

45
<PAGE> 47

UNDERWRITING

The underwriters named below (the "Underwriters"), represented by Morgan
Keegan & Company, Inc. and Crowell, Weedon & Co. (the "Representatives"), have
severally agreed, subject to the terms and conditions set forth in the
Underwriting Agreement (the "Underwriting Agreement"), to purchase from the
Company and the Selling Stockholder the number of shares of Common Stock
indicated below opposite their respective names at the initial public offering
price less the underwriting discount set forth on the cover page of this
Prospectus.

<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER SHARES
------------------------------------------------------------------------ ----------
<S> <C>
Morgan Keegan & Company, Inc. ..........................................
Crowell, Weedon & Co. ..................................................

---------
Total......................................................... 3,370,000
=========
</TABLE>

The Underwriting Agreement provides that the Underwriters are obligated to
purchase all of the shares of Common Stock offered hereby (other than those
covered by the over-allotment option described below) if any of such shares are
purchased. The Company and the Selling Stockholder have been advised by the
Underwriters that the Underwriters propose to offer the shares of Common Stock
to the public at the initial public offering price set forth on the cover page
of this Prospectus and to certain dealers at such price less a concession not in
excess of $ per share of Common Stock. The Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per share to
other dealers. The initial public offering price and the concessions and
discount to dealers may be changed by the Underwriters after the initial public
offering.

The Company and the Selling Stockholder have granted to the Underwriters an
option, exercisable for 30 days from the date of this Prospectus, to purchase up
to an additional 505,500 shares of Common Stock (of which the first 130,000
shares will be sold by the Selling Stockholder and the remaining 375,500 shares
will be sold by the Company) at the initial public offering price, less
underwriting discounts and commissions, as shown on the cover page of this
Prospectus. The Underwriters may exercise such option solely for the purpose of
covering over-allotments incurred in the sale of the shares of Common Stock
offered hereby.

The Company and the Selling Stockholder have agreed to indemnify the
several Underwriters or to contribute to losses arising out of certain
liabilities, including liabilities under the Securities Act.

The Company, each of its executive officers and directors and the ESOP have
agreed, for a period of 270 days from the date of this Prospectus, not to,
directly or indirectly, offer, sell, offer to sell, contract to sell, grant any
option to purchase, or otherwise dispose (or announce any offer, sale, grant of
any option to purchase or other disposition) of any shares of Common Stock, or
any securities convertible into, or exercisable or exchangeable for, shares of
Common Stock, in the public market, without the prior written consent of the
Representatives. In addition, the remaining 130,000 shares of Common Stock held
by the Selling Stockholder after the Offering shall become eligible for sale in
the public market 180 days after the date of this Prospectus, subject to the
holding period, volume and other restrictions of Rule 144.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price of the Common Stock will
be determined by negotiations among the Company, the Selling Stockholder and the
Representatives. Among the factors considered in determining the initial public
offering price of the Common Stock will be the history of, and the prospects
for, the Company and the industry in which it competes, an assessment of the
Company's management, the Company's past and present operations, its past and
present earnings and the trend of such earnings, the prospects for future
earnings of the Company, the general condition of the securities market at the
time of the Offering and the market prices of publicly traded companies that the
Company and the Representatives believe to be comparable to the Company.

46
<PAGE> 48

Timothy C. McQuay, a partner with Crowell, Weedon & Co., has been elected a
director of the Company, effective upon the completion of this Offering. See
"Management" and "Certain Transactions."

Application has been made for inclusion of the Common Stock on the Nasdaq
National Market under the symbol "MEAD." The Company has been advised by the
Representatives that each of the Representatives presently intend to make a
market in the Common Stock offered hereby; however, the Representatives are not
obligated to do so, and any market making activity may be discontinued at any
time. There can be no assurance that an active public market for the Common
Stock will develop and continue after this Offering.

The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids for and purchases of the Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchase of the Common Stock in the open market in order to
cover a syndicate short position. Penalty bids permit the Underwriters to
reclaim a selling concession from a syndicate member when the shares of Common
Stock originally sold by such syndicate member are purchased in a stabilizing
transaction or syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Common Stock to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on the NASDAQ National Market or otherwise and, if commenced, may be
discontinued at any time.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company and the Selling Stockholder by O'Melveny & Myers LLP,
Newport Beach, California. Certain legal matters will be passed upon for the
Underwriters by Gibson, Dunn & Crutcher LLP, Los Angeles, California.

EXPERTS

The financial statements of Meade Instruments Corp. as of February 28,
1995, February 29, 1996 and November 30, 1996 and for each of the three years in
the period ended February 29, 1996 and the nine months ended November 30, 1996
and the balance sheet of Meade Merger Corp. as of February 5, 1997 included in
this Prospectus have been so included in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules to the Registration Statement. For further information with respect to
the Company and such Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules filed as a part of the
Registration Statement. Statements contained in this Prospectus concerning the
contents of any contract or any other document referred to are not necessarily
complete and in each instance reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement. Each such statement
is qualified in all respects by such reference to such exhibit. The Registration
Statement, including exhibits and schedules thereto, as well as the reports and
other information filed by the Company with the Securities and Exchange
Commission, may be inspected without charge at the Public Reference Room of the
Securities and Exchange Commission's principal office at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Securities and Exchange
Commission's regional offices at Seven World Trade Center, 13th Floor, New York,
New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Securities and
Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. Electronic filings made through the Electronic Data Gathering Analysis
and Retrieval System are also publicly available through the Securities and
Exchange Commission's Web Site (http://www.sec.gov).

47
<PAGE> 49

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Meade Merger Corp.
Report of Independent Accountants................................................. F-2
Balance Sheet..................................................................... F-3
Note to Balance Sheet............................................................. F-4

Meade Instruments Corp.
Report of Independent Accountants................................................. F-5
Balance Sheets.................................................................... F-6
Income Statements................................................................. F-7
Statements of Stockholders' Equity (Deficit)...................................... F-8
Statements of Cash Flows.......................................................... F-9
Notes to Financial Statements..................................................... F-10
</TABLE>

F-1
<PAGE> 50

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Meade Merger Corp.

In our opinion, the accompanying balance sheet presents fairly, in all material
respects, the financial position of Meade Merger Corp. at February 5, 1997 in
conformity with generally accepted accounting principles. This financial
statement is the responsibility of the Company's management; our responsibility
is to express an opinion on this financial statement based on our audit. We
conducted our audit of this statement in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall balance sheet presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

Costa Mesa, California
February 6, 1997

F-2
<PAGE> 51

MEADE MERGER CORP.

BALANCE SHEET

<TABLE>
<CAPTION>
FEBRUARY 5,
1997
------------
<S> <C>
ASSETS
Cash......................................................................... $100
----
$100
====
STOCKHOLDERS' EQUITY
Stockholders' equity:
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares
issued and outstanding..................................................
Series A common stock; $0.01 par value; 15,000,000 shares authorized; 10
shares issued and outstanding...........................................
Series B common stock; $0.01 par value; 5,000,000 shares authorized; no
shares issued and outstanding...........................................
Additional paid-in capital.............................................. $100
----
Total stockholders' equity.............................................. 100
----
$100
====
</TABLE>

F-3
<PAGE> 52

MEADE MERGER CORP.

NOTE TO BALANCE SHEET

1. THE COMPANY

Meade Merger Corp. was incorporated in Delaware on February 4, 1997. Prior to
the effectiveness of the registration statement of which this Prospectus is a
part, Meade Instruments Corp., a California corporation, will merge with and
into Meade Merger Corp. As part of the merger, Meade Merger Corp. will exchange
at a ratio of one to one all of the outstanding shares of the redeemable Series
A preferred stock and Series A and Series B common stock of the California
corporation into comparable securities of Meade Merger Corp. Upon the closing of
the Offering, the then outstanding shares of Series A and Series B common stock
of Meade Merger Corp. will be converted to one series of common stock at a ratio
of one to one.

The balance sheet should be read in conjunction with the historical financial
statements of Meade Instruments Corp., a California corporation, included
elsewhere in the registration statement.

F-4
<PAGE> 53

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Meade Instruments Corp.

In our opinion, the accompanying balance sheets and related statements of
income, of stockholders' equity (deficit) and of cash flows present fairly, in
all material respects, the financial position of Meade Instruments Corp. at
February 28, 1995, February 29, 1996, and November 30, 1996, and the results of
its operations and its cash flows for each of the three years in the period
ended February 29, 1996 and for the nine months ended November 30, 1996, in
conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Costa Mesa, California
March 12, 1997

F-5
<PAGE> 54

MEADE INSTRUMENTS CORP.

BALANCE SHEETS

<TABLE>
<CAPTION>
FEBRUARY FEBRUARY
28, 29, NOVEMBER 30,
1995 1996 1996
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash........................................................ $ 42,000 $ 3,000 $ 3,000
Accounts receivable, less allowance for doubtful accounts of
$189,000 in 1995, $333,000 in 1996 and $198,000 at
November 30, 1996........................................ 3,386,000 4,539,000 12,852,000
Inventories (Note 2)........................................ 5,427,000 6,462,000 11,264,000
Deferred income taxes....................................... 226,000 330,000 513,000
Prepaid expenses and other current assets................... 104,000 213,000 48,000
----------- ----------- ------------
Total current assets................................ 9,185,000 11,547,000 24,680,000
Other assets.................................................. 151,000 263,000 1,287,000
Property and equipment, net (Note 3).......................... 861,000 1,225,000 1,480,000
----------- ----------- ------------
$10,197,000 $13,035,000 $ 27,447,000
=========== =========== ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Bank line of credit (Note 4)................................ $ 1,409,000 $ 2,127,000 $ 8,984,000
Notes payable to related parties (Note 5)................... 1,775,000 2,000,000
Current portion of long-term debt (Note 6).................. 200,000 200,000 1,584,000
Current portion of capital lease obligations (Note 7)....... 54,000 146,000 212,000
Accounts payable............................................ 1,252,000 1,406,000 2,796,000
Accrued liabilities......................................... 877,000 863,000 2,545,000
Income taxes payable........................................ 260,000 622,000 1,435,000
----------- ----------- ------------
Total current liabilities........................... 5,827,000 7,364,000 17,556,000
----------- ----------- ------------
Long-term debt, net of current portion (Note 6)............... 650,000 450,000 7,124,000
----------- ----------- ------------
Notes payable to related parties, net of current portion (Note
5).......................................................... 225,000
----------- ----------- ------------
Long-term capital lease obligations, net of current portion
(Note 7).................................................... 179,000 368,000 608,000
----------- ----------- ------------
Deferred rent................................................. 101,000 82,000 68,000
----------- ----------- ------------
Commitments (Note 7)
Redeemable Series A preferred stock; 1,000 shares authorized,
issued and outstanding (Note 8)............................. 3,041,000
----------- ----------- ------------
Stockholders' equity (deficit):
Preferred stock; 999,000 shares authorized, none issued and
outstanding..............................................
Series A common stock; 15,000,000 shares authorized; issued
and outstanding 2,571,361 shares at February 28, 1995 and
February 29, 1996 and 3,500,000 shares at November 30,
1996..................................................... 1,000 1,000 3,511,000
Series B common stock; 5,000,000 shares authorized;
1,500,000 shares issued and outstanding at February 28,
1995, February 29, 1996 and November 30, 1996 (Note 9)...
Retained earnings........................................... 3,214,000 4,770,000 5,544,000
----------- ----------- ------------
3,215,000 4,771,000 9,055,000
Unearned ESOP shares (Note 9)............................... (10,005,000)
----------- ----------- ------------
Total stockholders' equity (deficit)................ 3,215,000 4,771,000 (950,000)
----------- ----------- ------------
$10,197,000 $13,035,000 $ 27,447,000
=========== =========== ============
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE> 55

MEADE INSTRUMENTS CORP.

INCOME STATEMENTS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED FEBRUARY 28(29), NOVEMBER 30,
--------------------------------------- -------------------------
1994 1995 1996 1995 1996
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales........................... $16,628,000 $24,934,000 $29,770,000 $23,459,000 $38,966,000
Cost of sales....................... 11,670,000 17,040,000 20,054,000 15,827,000 26,267,000
----------- ----------- ----------- ----------- -----------
Gross profit........................ 4,958,000 7,894,000 9,716,000 7,632,000 12,699,000
Selling expenses.................... 1,565,000 2,035,000 2,832,000 2,158,000 3,555,000
General and administrative
expenses.......................... 1,378,000 2,118,000 2,951,000 1,966,000 3,004,000
Research and development expenses... 425,000 423,000 518,000 396,000 444,000
ESOP contribution................... 1,745,000
Amortization of deferred credit..... (53,000)
----------- ----------- ----------- ----------- -----------
Operating income.................... 1,643,000 3,318,000 3,415,000 3,112,000 3,951,000
Interest expense.................... 493,000 470,000 659,000 496,000 1,253,000
----------- ----------- ----------- ----------- -----------
Income before income taxes.......... 1,150,000 2,848,000 2,756,000 2,616,000 2,698,000
Provision for income taxes (Note
10)............................... 110,000 797,000 1,200,000 1,177,000 1,133,000
----------- ----------- ----------- ----------- -----------
Net income.......................... 1,040,000 2,051,000 1,556,000 1,439,000 1,565,000
Deductions for accretion on
redeemable preferred stock (Note
1)................................ 541,000
----------- ----------- ----------- ----------- -----------
Net income available to common
stockholders...................... $ 1,040,000 $ 2,051,000 $ 1,556,000 $ 1,439,000 $ 1,024,000
=========== =========== =========== =========== ===========
Net income per share................ $ 0.22 $ 0.44 $ 0.33 $ 0.31 $ 0.28
=========== =========== =========== =========== ===========
Weighted average number of shares
outstanding (Note 1).............. 4,682,472 4,682,472 4,682,472 4,682,472 3,608,335
=========== =========== =========== =========== ===========
Supplemental net income per share
(Note 12), unaudited.............. $ 0.37 $ 0.47
=========== ===========
</TABLE>

See accompanying notes to financial statements.

F-7
<PAGE> 56

MEADE INSTRUMENTS CORP.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
SERIES A SERIES B
COMMON STOCK COMMON STOCK
---------------------- -------------------- RETAINED UNEARNED
SHARES AMOUNT SHARES AMOUNT EARNINGS ESOP SHARES TOTAL
--------- ---------- ---------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at February 28, 1993....... 2,571,361 $ 1,000 1,500,000 $ $ 123,000 $ $ 124,000
Net income......................... 1,040,000 1,040,000
--------- ---------- --------- -------- ---------- ------------ ------------
Balance at February 28, 1994....... 2,571,361 1,000 1,500,000 1,163,000 1,164,000
Net income......................... 2,051,000 2,051,000
--------- ---------- --------- -------- ---------- ------------ ------------
Balance at February 28, 1995....... 2,571,361 1,000 1,500,000 3,214,000 3,215,000
Net income......................... 1,556,000 1,556,000
--------- ---------- --------- -------- ---------- ------------ ------------
Balance at February 29, 1996....... 2,571,361 1,000 1,500,000 4,770,000 4,771,000
Redemption of Series A common
stock............................ (71,361) (250,000) (250,000)
Purchase and exercise of warrant
for shares of Series A common
stock............................ 1,000,000 3,510,000 3,510,000
Unearned ESOP shares............... (11,000,000) (11,000,000)
Payment received on ESOP
acquisition loan................. 995,000 995,000
Accretion on redeemable preferred
stock............................ (541,000) (541,000)
Net income......................... 1,565,000 1,565,000
--------- ---------- --------- -------- ---------- ------------ ------------
Balance at November 30, 1996....... 3,500,000 $3,511,000 1,500,000 $ $5,544,000 $(10,005,000) $ (950,000)
========= ========== ========= ======== ========== ============ ============
</TABLE>

See accompanying notes to financial statements.

F-8
<PAGE> 57

MEADE INSTRUMENTS CORP.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED FEBRUARY 28(29), NOVEMBER 30,
--------------------------------------- --------------------------
1994 1995 1996 1995 1996
----------- ----------- ----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income....................................... $ 1,040,000 $ 2,051,000 $ 1,556,000 $ 1,439,000 $ 1,565,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................. 120,000 150,000 300,000 220,000 422,000
ESOP contribution.............................. 1,745,000
Amortization of deferred credit (Note 1)....... (53,000)
Changes in assets and liabilities:
Increase in accounts receivable.............. (334,000) (924,000) (1,153,000) (3,811,000) (8,313,000)
Increase in inventories...................... (312,000) (853,000) (1,035,000) (1,632,000) (4,802,000)
Increase in deferred income taxes............ (208,000) (18,000) (104,000) (183,000)
(Increase) decrease in prepaid expenses and
other current assets...................... 22,000 (23,000) (109,000) (39,000) 165,000
Increase in other assets..................... (122,000) (112,000) (79,000) (1,164,000)
(Decrease) increase in accounts payable...... (1,209,000) 21,000 154,000 413,000 1,390,000
(Decrease) increase in accrued liabilities... 507,000 201,000 (33,000) (98,000) 918,000
Increase in income taxes payable............. 210,000 50,000 362,000 569,000 813,000
----------- ----------- ----------- ----------- ------------
Total adjustments......................... (1,257,000) (1,518,000) (1,730,000) (4,457,000) (9,009,000)
----------- ----------- ----------- ----------- ------------
Net cash provided by (used in) operating
activities.............................. (217,000) 533,000 (174,000) (3,018,000) (7,444,000)
----------- ----------- ----------- ----------- ------------
Cash flows from investing activities:
Capital expenditures............................. (304,000) (215,000) (247,000) (138,000) (93,000)
----------- ----------- ----------- ----------- ------------
Net cash used in investing activities..... (304,000) (215,000) (247,000) (138,000) (93,000)
----------- ----------- ----------- ----------- ------------
Cash flows from financing activities:
Payments on long-term debt....................... (591,000) (800,000) (200,000) (150,000) (1,442,000)
Proceeds from long-term debt..................... 800,000 1,000,000 9,500,000
Net borrowings (payments) under bank line of
credit......................................... (1,187,000) (307,000) 718,000 3,368,000 6,857,000
Proceeds from (payments on) notes payable to
related parties................................ 1,500,000 (2,000,000)
Redemption of common stock....................... (250,000)
Issuance of preferred stock...................... 2,500,000
Purchase and exercise of warrant for common
stock.......................................... 3,510,000
Unearned ESOP shares............................. (11,000,000)
Payment of Series B common stock dividend........ (995,000)
Payment received on ESOP acquisition loan........ 995,000
Payments under capital lease obligations......... (173,000) (136,000) (101,000) (138,000)
----------- ----------- ----------- ----------- ------------
Net cash provided by (used in) financing
activities.............................. 522,000 (280,000) 382,000 3,117,000 7,537,000
----------- ----------- ----------- ----------- ------------
Net increase (decrease) in cash.................... 1,000 38,000 (39,000) (39,000) -0-
Cash at beginning of period........................ 3,000 4,000 42,000 42,000 3,000
----------- ----------- ----------- ----------- ------------
Cash at end of period.............................. $ 4,000 $ 42,000 $ 3,000 $ 3,000 $ 3,000
=========== =========== =========== =========== ============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest....................................... $ 496,000 $ 455,000 $ 639,000 $ 491,000 $ 1,152,000
Income taxes................................... $ 11,000 $ 859,000 $ 940,000 $ 540,000 $ 540,000
Non-cash financing activities:
Capital lease obligations...................... $ 162,000 $ 417,000 $ 417,000 $ 444,000
Accretion on redeemable preferred stock........ $ 541,000
</TABLE>

See accompanying notes to financial statements.

F-9
<PAGE> 58

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Meade Instruments Corp. ("the Company"), a California corporation,
manufactures, imports and distributes telescopes and telescope accessories.

On February 28, 1991, Meade Holding Corp. ("MHC") acquired all of the
outstanding common stock (17,200 shares) of the Company for $1,000 in cash. The
acquisition was accounted for using the purchase method of accounting, and the
assets and liabilities of Meade Instruments Corp. reflect the underlying basis
of Meade Holding Corp. in the Company. The fair market value of the net assets
acquired exceeded the cost. This excess over cost was allocated to reduce
noncurrent assets to zero. The remainder of the excess, approximately $151,000,
was classified as a deferred credit (negative goodwill) and was amortized using
the straight-line method over three years. The balance of the deferred credit of
$53,000 was amortized during the year ended February 28, 1994.

On February 26, 1996, MHC was merged into Meade Instruments Corp., which
was the surviving corporation of the merger. In the merger, all 17,200 shares of
the outstanding common stock of the Company were canceled, and 1,000 shares of
the outstanding common stock of MHC (representing all of the issued and
outstanding shares of MHC) were converted, on a one to one basis, into the
common stock of the surviving Meade Instruments Corp.

In April 1996, the Company effected a recapitalization. The existing
stockholders exchanged their existing common stock for 2,571,361 shares of
Series A and 1,500,000 shares of Series B common stock. The accompanying
financial statements have been retroactively adjusted to give effect to this
transaction. The Company redeemed 71,361 shares of Series A common stock for
$250,000. The Company also issued 1,000 shares of redeemable Series A preferred
stock and a warrant to purchase 1,000,000 shares of Series A common stock at
$0.01 per share for $6.0 million in the aggregate. The warrant was exercised
immediately upon purchase of the Series A preferred stock. The Company has
allocated $2.5 million of the proceeds as the fair value of the Series A
preferred stock and $3.5 million as the fair value of the Series A common stock.

Also in April 1996, the Company's newly-formed Employee Stock Ownership
Plan (ESOP) purchased all of the outstanding shares of Series B common stock
(1,500,000 shares) from the existing stockholders. The ESOP financed the
purchase through the proceeds of an $11.0 million term loan from the Company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Sales are recorded when products are shipped.

Inventories

Inventories are stated at the lower of cost, as determined using the
first-in, first-out (FIFO) method, or market. Costs include materials, labor and
manufacturing overhead.

Property and equipment

Property and equipment are stated at cost and are depreciated using the
straight-line method over the estimated useful lives of the assets which range
from three to seven years. Properties held under capital leases are recorded at
the present value of the noncancellable lease payments over the term of the
lease and are amortized over the shorter of the lease term or the estimated
useful lives of the assets.

F-10
<PAGE> 59

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes

The Company uses the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates that will be in effect when the
differences are expected to reverse. The Company files its tax return for the
year ending August 31, rather than for the financial reporting period ending the
last day of February.

Research and development

Expenditures for research and development costs are charged to expense as
incurred.

Net income per share

Net income per share is based upon the weighted average number of common
shares outstanding during each period under the treasury stock method, after
giving retroactive effect to the conversion of shares to Series A and B common
stock (as discussed above). Unearned ESOP shares become outstanding for net
income per share purposes when they are released or committed to be released
from collateral (Note 9). Pursuant to the requirements of the Staff of the
Securities and Exchange Commission, the shares related to stock sold subsequent
to November 30, 1995 have been shown as outstanding for all periods presented.
Net income available to common stockholders for the nine month period ended
November 30, 1996 is computed by deducting from net income the accretion on the
redeemable preferred stock of $541,000 (Note 8) during such period.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
concentration of credit risk, are principally accounts receivable. The Company
maintains an allowance for doubtful accounts but historically has not
experienced any significant losses related to individual customers or groups of
customers in any particular industry or geographic area.

Fair value of financial instruments

The Company's financial instruments include cash, accounts receivable,
prepaid expenses and other current assets, accounts payable, accrued
liabilities, and short-term loans. The carrying value of these financial
instruments approximates fair value due to their short-term nature.

Use of estimates in the preparation of financial statements

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 revenues and expenses during the
respective reporting periods. Actual results could differ from those estimates.

New accounting pronouncements

Effective March 1, 1996, the Company adopted the Financial Accounting
Standards Board ("FASB") Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS No. 121")
and Statement No. 123, "Accounting for Stock-Based Compensation" ("SFAS No.
123"). The adoption of SFAS No. 121 and SFAS No. 123 by the Company did not have
a

F-11
<PAGE> 60

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

material impact on the Company's financial position, results of operations or
liquidity. The Company has adopted only the disclosure provisions of SFAS No.
123 for employee stock-based compensation.

Unaudited interim information

The information presented for the nine months ended November 30, 1995 is
unaudited. In the opinion of management, the unaudited interim financial
information includes all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Company's results of its operations
and its cash flows for the nine months ended November 30, 1995. The Company's
results of operations and cash flows for the interim period are not necessarily
indicative of the results to be expected for any other interim period or a full
year. The data disclosed in these notes to financial statements at such dates
and for such periods are also unaudited.

Reclassifications

Certain reclassifications, which have no effect on retained earnings, have
been made to conform the 1994 and 1995 information to the 1996 presentation.

2. INVENTORIES

The composition of inventories is as follows:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1995 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Raw materials................................. $ 2,698,000 $ 2,433,000 $ 3,412,000
Work in process............................... 1,140,000 1,500,000 1,839,000
Finished goods................................ 1,589,000 2,529,000 6,013,000
----------- ----------- ------------
$ 5,427,000 $ 6,462,000 $ 11,264,000
=========== =========== ============
</TABLE>

3. PROPERTY AND EQUIPMENT

The composition of property and equipment is as follows:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1995 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Molds and dies................................ $ 436,000 $ 668,000 $ 720,000
Machinery and equipment....................... 362,000 866,000 1,339,000
Furniture and fixtures........................ 99,000 27,000 37,000
Leasehold improvements........................ 299,000 299,000 301,000
----------- ----------- ----------
1,196,000 1,860,000 2,397,000
Less accumulated depreciation and
amortization................................ (335,000) (635,000) (917,000)
----------- ----------- ----------
$ 861,000 $ 1,225,000 $1,480,000
=========== =========== ==========
</TABLE>

The gross value of assets under capital leases included in machinery and
equipment above is $252,000 at February 28, 1995, $669,000 at February 29, 1996,
and $1.1 million at November 30, 1996.

4. BANK DEBT

At February 29, 1996, the Company's bank line of credit extended to June
30, 1996 and was evidenced by a note payable which provided for borrowings of up
to 80% of eligible accounts receivable, as defined, plus 50% of eligible
inventory, as defined. The note, which bore interest at the bank's reference
rate (8.25% at February 29, 1996) plus 1.0%, was secured by substantially all of
the Company's assets and was guaranteed by

F-12
<PAGE> 61

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the Company's stockholders. The Company's $1.0 million term loan at February 29,
1996 was secured by substantially all of the Company's assets and guaranteed by
the Company's stockholders (Note 6). The line of credit and term loan were
subject to certain restrictive covenants including certain financial statement
ratios, restrictions on capital expenditures, and a minimum tangible net worth.
Furthermore, the bank agreement restricted the Company from declaring or paying
dividends.

In April 1996, the Company replaced its revolving line of credit with a
$10.0 million line of credit with a new lender secured by receivables and
inventory. The line of credit bears interest at the bank's base rate (8.25% at
November 30, 1996) plus 0.5%, interest payable monthly in arrears. In April
1996, the Company also borrowed $9.5 million evidenced by a term note (Note 6).
The Loan and Security Agreement between the bank and the Company, which governs
the line of credit and term note, contains certain financial covenants including
minimum working capital, minimum profitability, and minimum interest and debt
coverage ratios. Furthermore, the bank agreement restricts the Company from
declaring or paying dividends on its Series A common stock.

5. NOTES PAYABLE TO RELATED PARTY

In July 1993, the Company borrowed $1.5 million from a stockholder
evidenced by a promissory note payable. Interest was payable monthly at the rate
of 10.0% per annum. The note was subordinated to the bank debt and was due, as
amended, on July 8, 1996. Also, payable to stockholders were subordinated notes
payable totaling $500,000 and due on various dates between February 28, 1996 and
March 29, 1996. Interest was payable quarterly at the First National Bank of
Boston's base rate (8.25% at February 29, 1996) plus 2.0%. Payment of principal
was subordinated to the bank indebtedness. The notes payable to related parties
were repaid in full in April 1996. Interest expense on the notes payable to
related parties was $140,000, $198,000, $204,000 and $16,000 for the years ended
February 28, 1994, February 28, 1995 and February 29, 1996 and for the nine
months ended November 30, 1996, respectively.

6. LONG-TERM DEBT

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1995 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Note payable to bank, interest at the bank's
base rate (8.25% at November 30, 1996) plus
0.75% payable monthly, principal payments are
due in defined quarterly amounts totaling
$1,584,000 annually for five years commencing
July 1996, any remaining principal and
interest amounts are due in full at April 2001
(Note 4)...................................... $ 8,708,000
Note payable to bank, interest at the bank's
reference rate (9% at February 28, 1995 and
8.25% at February 29, 1996) plus 1.25% payable
monthly, principal payments are due in equal
monthly installments over five years
commencing June 1, 1994....................... $ 850,000 $ 650,000
---------- ---------- ------------
850,000 650,000 8,708,000
Less current portion of long-term debt.......... (200,000) (200,000) (1,584,000)
---------- ---------- ------------
$ 650,000 $ 450,000 $ 7,124,000
========== ========== ============
</TABLE>

F-13
<PAGE> 62

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The aggregate maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
FEBRUARY 29, NOVEMBER 30,
FISCAL YEAR 1996 1996
---------------------------------------------------- ------------ ------------
<S> <C> <C>
1997.............................................. $200,000 $ 525,000
1998.............................................. 200,000 1,584,000
1999.............................................. 200,000 1,584,000
2000.............................................. 50,000 1,584,000
2001.............................................. 1,584,000
Thereafter........................................ 1,847,000
-------- ----------
$650,000 $8,708,000
======== ==========
</TABLE>

7. LEASES AND OTHER COMMITMENTS

The Company is obligated under certain long-term noncancellable leases and
other noncancellable agreements for its office and manufacturing facilities and
certain equipment and machinery. Aggregate future minimum commitments under
noncancellable leases and other agreements at February 29, 1996 that have
remaining terms in excess of one year are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR CAPITAL OPERATING
---------------------------------------------------- ------------ ------------
<S> <C> <C>
1997.............................................. $ 197,000 $ 292,000
1998.............................................. 173,000 292,000
1999.............................................. 137,000 292,000
2000.............................................. 121,000 292,000
2001.............................................. 4,000
---------- ----------
Net minimum lease payments.......................... 632,000 $1,168,000
==========
Less amount representing interest................... (118,000)
----------
Capital lease obligations........................... $ 514,000
==========
</TABLE>

For the years ended February 28, 1994, February 28, 1995 and February 29,
1996 and the nine months ended November 30, 1996, the Company incurred rent
expense of $387,000, $309,000, $373,000 and $261,000, respectively.

In November 1992, the Company executed a lease commencing March 1993 for
its office and manufacturing facilities. The lease term is seven years,
extendable for an additional five years at the Company's option. Aggregate
future minimum lease commitments for this lease are included in the schedule
above. Such commitments are subject to periodic upward adjustment, based upon
increases in the Consumer Price Index.

In December 1996, the Company entered into a ten-year lease agreement for
new office and manufacturing facilities that is expected to commence in October
1997 upon completion of certain tenant improvements. Aggregate future minimum
commitments under noncancellable operating leases are expected to increase
$254,000 in 1998, $610,000 in 1999 and 2000, $684,000 in 2001, and $7.2 million
in the aggregate thereafter.

8. REDEEMABLE PREFERRED STOCK

The Redeemable Series A preferred stock has a cumulative 14% dividend per
annum payable quarterly and is mandatorily redeemable in April 2001. In the
event that the Company does not declare and pay the dividends in cash which have
accumulated on any quarterly due date or the Series A preferred stock is not

F-14
<PAGE> 63

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

redeemed when due, then thereafter additional dividends shall accrue on the
Series A preferred stock at the rate of 14% per annum, compounded quarterly,
with the amount of such additional dividends added to accrued dividend payments
or redemption value until all such amounts have been paid in full. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the holders of the Series A preferred stock will be entitled to be paid, before
any payment shall be made to the common stockholders, an amount in cash equal to
$6,000 for each share of Series A preferred stock plus all accrued and unpaid
dividends to date. If the Company does not satisfy certain covenants in the
preferred stock purchase agreement, the preferred stockholder may designate a
majority of the Company's Board of Directors. The Company recorded the Series A
preferred stock at $2.5 million, its fair value, and is recording accretion to
increase the carrying value of the Series A preferred stock to the redemption
value of $6.0 million by April 23, 2001, the redemption date, plus unpaid
dividends.

9. EMPLOYEE STOCK OWNERSHIP PLAN

Adoption of the Employee Stock Ownership Plan (ESOP) was effective March 1,
1996 and covers all employees of the Company who meet certain service and
eligibility requirements. The ESOP year ends on the last day of February each
year. A participant becomes 100% vested in his ESOP account if, while employed
at the Company, the participant (i) reaches his 65th birthday, (ii) becomes
disabled (as defined), (iii) dies, or (iv) achieves five years of credited
service (as defined). Distributions of a participant's vested account are
directed by the ESOP's Administrative Committee. The Company provides a put
option to any participant who receives a distribution of Company stock, unless
the stock is readily tradable on an established market.

In April 1996, the ESOP purchased all of the outstanding shares of the
Company's Series B common stock (1,500,000 shares) held by the existing
stockholders for $11.0 million. The Series B common stock has a cumulative
dividend of $0.513 per share and a liquidation preference over the Series A
common stock. The ESOP financed the purchase of the Series B common stock (the
financed shares) with the proceeds of an $11.0 million term loan (the
acquisition loan) from the Company. The financed shares are held by the Meade
Instruments Corp. Employee Stock Ownership Trust (the ESOP trust). The ESOP
pledged the financed shares to the Company as security for the acquisition loan.
The financed shares were initially credited to a suspense account on the books
of the ESOP and will be allocated to the accounts of individual ESOP
participants, as of each plan year end, for payments made on the acquisition
loan. The acquisition loan has a ten year term and bears interest at 6% per
annum. Principal and interest is due semi-annually, subject to the Company
making contributions to the ESOP to fund the principal and interest payments.
The release of financed shares from collateral is based on the ratio that the
payment of principal bears to the initial principal of the acquisition loan. The
Company accounts for its ESOP in accordance with Statement of Position 93-6.
Accordingly, the shares pledged as collateral are reported as unearned ESOP
shares in the balance sheet. As shares are released from collateral, the Company
records compensation expense, and the shares become outstanding for net income
per share purposes. Dividends on allocated shares are recorded as a reduction of
retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest.

For the nine months ended November 30, 1996, the Company has recognized
ESOP contribution expense of $1,745,000, including the dividend payment
described below. In August 1996, the Company's board of directors (i) authorized
a contribution to the ESOP in the amount of $237,000 to fund the semi-annual
interest payment due on the acquisition loan and (ii) declared and paid a
dividend on the Series B common stock in the amount of $995,000. The ESOP trust
used the proceeds of the contribution to pay the semi-annual interest payment
due on the acquisition loan. The ESOP used the proceeds from the dividend to
repay a portion of the acquisition loan. The repayment released approximately
136,000 shares from collateral resulting in $995,000 in ESOP contribution
expense.

F-15
<PAGE> 64

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

As of November 30, 1996, no shares in the ESOP trust have been allocated to
individual participants. Allocations of the 136,000 released shares will be made
as of December 31, 1996 for the plan year ending February 28, 1997. Allocation
to individual participant accounts are made in the ratio that the compensation
of each participant bears to the total compensation of all such participants.
There are no shares committed to be released as of November 30, 1996. Shares in
suspense at November 30, 1996 are 1,364,000.

The fair value of the Series B common stock upon purchase from the existing
stockholders in April 1996 was determined to be $7.33 per share. Under the terms
of the ESOP, the fair value of the stock at any plan year end is to be
determined by an independent appraiser so long as the stock is not readily
tradable on an established market. At November 30, 1996, there is no repurchase
obligation.

10. INCOME TAXES

Significant components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED FEBRUARY 28(29), ENDED
------------------------------------- NOVEMBER 30,
1994 1995 1996 1996
--------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Current:
Federal.......................... $ 259,000 $649,000 $1,094,000 $1,103,000
State............................ 59,000 166,000 210,000 213,000
--------- -------- ---------- ----------
318,000 815,000 1,304,000 1,316,000
--------- -------- ---------- ----------
Deferred:
Federal.......................... (163,000) (14,000) (87,000) (153,000)
State............................ (45,000) (4,000) (17,000) (30,000)
--------- -------- ---------- ----------
(208,000) (18,000) (104,000) (183,000)
--------- -------- ---------- ----------
$ 110,000 $797,000 $1,200,000 $1,133,000
========= ======== ========== ==========
</TABLE>

The provision for income taxes differed from the amount computed by
applying the U.S. federal statutory rate to income before income taxes due to
the effects of the following:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY NINE MONTHS
28(29), ENDED
------------------------ NOVEMBER 30,
1994 1995 1996 1996
----- ----- ---- ------------
<S> <C> <C> <C> <C>
Federal income tax rate......................... 34.0% 34.0% 34.0% 34.0%
State income taxes, net of federal income tax
benefit....................................... 6.1 6.1 6.1 6.1
Benefit of operating loss carryforwards......... (12.6) (15.2)
Reduction in valuation allowance................ (18.0)
Other........................................... 0.1 3.1 3.5 1.9
----- ----- ---- ----
9.6% 28.0% 43.6% 42.0%
===== ===== ==== ====
</TABLE>

Deferred tax assets at February 28, 1995, February 29, 1996 and November
30, 1996 consist of certain inventory and accounts receivable reserves as well
as differences in the bases of fixed asset which are measured differently for
tax and financial reporting purposes.

F-16
<PAGE> 65

MEADE INSTRUMENTS CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. SIGNIFICANT CUSTOMERS AND FOREIGN SALES

The Company generated 13%, 16% and 12% of its revenue from one customer
during the years ended February 28, 1994, February 28, 1995, February 29, 1996,
respectively, and 24% of its revenue from two customers totalling $5.0 million
and $4.3 million, respectively, during the nine months ended November 30, 1996.
Export sales approximated $3.2 million, $4.2 million, $7.4 million and $6.6
million of sales for the years ended February 28, 1994, February 28, 1995,
February 29, 1996 and the nine months ended November 30, 1996, respectively.
Included in export sales are sales to Europe of $2.0 million, $3.1 million, $4.1
million and $4.5 million in the years ended February 28, 1994, February 28, 1995
and February 29, 1996 and the nine months ended November 30, 1996, respectively.

12. SUBSEQUENT EVENTS

Proposed public offering

In December 1996, the Company entered into an agreement in principle with
two underwriters (the Underwriters), whereby the Underwriters have agreed in
principle to act as underwriters in an initial public offering (the Offering) of
up to 2,875,500 shares of newly-issued Company common stock (2,500,000 shares
intended to be offered to the public and 375,500 shares which the Underwriters
have the option to purchase to cover over-allotments, if any). Prior to the
closing of this Offering, the Company will reincorporate into a Delaware
corporation pursuant to a merger with and into a newly-formed and wholly-owned
Delaware subsidiary, with the Delaware subsidiary to be the surviving
corporation. All of the outstanding shares of the Series A and Series B common
stock and Series A preferred stock of the Company will be exchanged on a ratio
of one for one with shares of Series A and Series B common stock and Series A
preferred stock of the Delaware subsidiary.

The Company intends to use the proceeds to redeem all of the outstanding
shares of the redeemable preferred stock and to repay the Company's term note
and a portion of the line of credit. Supplemental net income per share is based
upon the weighted average number of common shares outstanding during the year
ended February 29, 1996 and the nine months ended November 30, 1996, after
giving retroactive effect to the beginning of the period for the redemption of
the preferred stock and the repayment of the Company's term note and a portion
of the line of credit. Pursuant to Accounting Principles Board Statement No. 15,
the number of weighted average shares outstanding has been increased by
2,077,778 shares. This is the number of shares necessary, at an assumed public
offering price of $9.00 per share, to retire $12.7 million of term and revolving
debt and to redeem $6.0 million of Series A preferred stock.

Stock Incentive Plan

In February 1997, the Company's Board of Directors adopted the 1997 Stock
Incentive Plan (the Plan). The Plan provides for the grant of incentive and
non-qualified stock options, restricted stock, stock appreciation rights (SARs),
and performance stock awards to certain key employees (including officers,
whether or not directors) of the Company. Under the Plan, the Company may grant
options and other awards with respect to 750,000 shares of common stock. Awards
under the Plan generally vest after six months and become exercisable over a
four-year period, or as determined by the Compensation Committee of the Board of
Directors. Stock options generally remain exercisable for a period of ten years
from the date of grant.

F-17
<PAGE> 66

=========================================================

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE OBTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY OF THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS, NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE INFORMATION PRESENTED HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
AS OF WHICH SUCH INFORMATION IS GIVEN. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES OF COMMON STOCK TO
WHICH IT RELATES, OR ANY SUCH SHARES IN ANY JURISDICTION TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................... 3
Risk Factors................................. 7
Use of Proceeds.............................. 12
Dividend Policy.............................. 12
Dilution..................................... 13
Capitalization............................... 14
Selected Financial Information............... 15
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................. 17
Business..................................... 23
Management................................... 33
Certain Transactions......................... 38
Principal and Selling Stockholders........... 40
Description of Capital Stock................. 41
Shares Eligible for Future Sale.............. 45
Underwriting................................. 46
Legal Matters................................ 47
Experts...................................... 47
Additional Information....................... 47
Index to Financial Statements................ F-1
</TABLE>

------------------

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF THE DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

=========================================================

3,370,000 SHARES

LOGO

COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
MORGAN KEEGAN & COMPANY, INC.
CROWELL, WEEDON & CO.
, 1997

=========================================================
<PAGE> 67

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses, other than underwriting
discounts and commissions, payable by the Company in connection with the
issuance and distribution of the Common Stock being registered. All amounts are
estimates except the Securities and Exchange Commission registration fee, the
NASD filing fee and the Nasdaq National Market listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $ 11,744
NASD filing fee........................................................... 4,376
Nasdaq National Market listing fee........................................ 36,250
Accounting fees and expenses.............................................. 175,000
Legal fees and expenses................................................... 325,000
Blue Sky qualification fees and expenses.................................. 10,000
Printing and engraving expenses........................................... 150,000
Transfer agent and registrar fees......................................... 2,500
Miscellaneous............................................................. 5,130
--------
Total........................................................... $720,000
========
</TABLE>

- ---------------

(1) A portion of such expenses may be reimbursed by the Selling Stockholder. See
"Certain Transactions."

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

LIMITATION OF LIABILITY OF DIRECTORS

II-1
<PAGE> 68

The Company has entered into indemnification agreements with certain of its
directors and officers that require the Company to indemnify such directors and
officers to the fullest extent permitted by applicable provisions of law,
provided that any settlement of a third party action against a director or
officer is approved by the Company, and subject to limitations for actions
initiated by the director or officer, penalties paid by insurance and violations
of Section 16(b) of the Securities Exchange Act of 1934, as amended, and similar
laws.

The Underwriting Agreement filed as Exhibit 1.1 to this Registration
Statement provides for indemnification by the Underwriters of the Company and
its directors and officers for certain liabilities arising under the Securities
Act or otherwise.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

(a) On April 23, 1996, pursuant to a recapitalization of the Company, the
Stockholders exchanged their shares of Common Stock for shares of Series A
Common Stock and shares of Series B Common Stock. Immediately following such
exchange, the Stockholders sold all of such shares of Series B Common Stock. See
"Certain Transactions." The issuances described in this Item 15(a) were deemed
exempt from registration under the Securities Act in reliance upon Section
3(a)(9) of the Securities Act.

(b) On April 23, 1996, the Company issued and sold 1,000 shares of its
Redeemable Preferred Stock and a Series A Common Stock Purchase Warrant to
purchase 1,000,000 shares of Series A Common Stock to Churchill ESOP Capital
Partners ("Churchill") for an aggregate purchase price of $6.0 million.
Churchill exercised such warrant in full immediately after the closing of the
ESOP transaction. The issuances described in this Item 15 were deemed to be
exempt from registration under the Securities Act, in reliance on Section 4(2)
of the Securities Act as transactions by an issuer not involving a public
offering. In addition, Churchill represented its intentions to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof and appropriate legends were affixed to the share
certificates issued in such transactions. Churchill had adequate access to
information about the Company.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- --------------------------------------------------------------------------------
<C> <S>
1.1+ Form of Underwriting Agreement
3.1+ Certificate of Incorporation of the Company, as amended
3.2+ Bylaws of the Company
4.1 Specimen stock certificate
5.1+ Opinion of O'Melveny & Myers LLP
10.1+ Form of Directors' and Officers' Indemnity Agreement
10.2+ Exchange Agreement, dated April 23, 1996, among Messrs. John C. Diebel, Steven
G. Murdock, Ronald Ezra and Joseph A. Gordon, Jr. (the "Stockholders") and the
Company
10.3+ Redemption Agreement, dated April 23, 1996, among the Stockholders and the
Company
10.4+ Securities Purchase Agreement, dated April 23, 1996, among Churchill ESOP
Capital Partners, A Minnesota Limited Partnership ("Churchill"), and the Company
</TABLE>

II-2
<PAGE> 69

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- --------------------------------------------------------------------------------
<C> <S>
10.5+ Series A Common Stock Purchase Warrant, dated April 23, 1996, issued to
Churchill
10.6+ Shareholder Agreement, dated April 23, 1996, among the Stockholders, Churchill
and the Company
10.7+ Industrial Lease (Single Tenant; Net; Stand-Alone), dated December 20, 1996,
between The Irvine Company and the Company
10.8+ Indemnity Agreement, dated April 23, 1996, among the Stockholders, the Company
and Churchill
10.9+ Employment Agreement, dated April 23, 1996, between John C. Diebel and the
Company
10.10+ Employment Agreement, dated April 23, 1996, between Steven G. Murdock and the
Company
10.11+ Employment Agreement, dated April 23, 1996, between Ronald Ezra and the Company
10.12+ Employment Agreement, dated April 23, 1996, between Joseph A. Gordon, Jr. and
the Company
10.13+ Meade Instruments Corp. Employee Stock Ownership Plan (the "ESOP"), effective as
of March 1, 1996, together with Form of Amendments No. 1 and No. 2 to the ESOP
10.14+ Employee Stock Ownership Trust Agreement, dated as of March 1, 1996, between the
Company and Wells Fargo Bank, N.A.
10.15+ Employee Stock Ownership Plan Loan and Pledge Agreement, dated April 23, 1996,
between the ESOP and the Company
10.16+ Loan and Security Agreement, dated as of April 23, 1996, between the Company and
Fleet Capital Corporation
10.17+ Purchase and Sales Agreement, dated as of December 29, 1994, between the Company
and Weidy Optical Co., Ltd.
10.18+ Standard Industrial/Commercial Single-Tenant Lease-Net, dated as of November 20,
1992, between the Company and Rossmore Enterprises
10.19+ Promissory Note, dated July 8, 1995, between the Company and John C. Diebel
10.20+ Form of Trademark Distribution Agreement for EEC Countries
10.21+ Form of Trademark Distribution Agreement for Non-EEC Countries
10.22+ Incentive Compensation Agreement, dated as of October 4, 1995, between the
Company and Brent Christensen
10.23+ Standard Industrial/Commercial Multi-Tenant Lease-Gross, dated as of January 31,
1996, by and between the Company and CNH, LLC
10.24+ Celtic Master Lease, dated as of February 23, 1995, by and between the Company
and Celtic Leasing Corp.
10.25+ Stock Purchase Agreement, dated as of April 23, 1996, by and among the ESOP, the
Company, the Diebel Living Trust u/d/t dated January 12, 1995 and John C. Diebel
10.26+ Stock Purchase Agreement, dated as of April 23, 1996, by and among the ESOP, the
Company, the Murdock 1986 Trust u/d/t dated October 23, 1986 and Steven G.
Murdock
10.27+ Stock Purchase Agreement, dated as of April 23, 1996, by and among the ESOP, the
Company and Ronald Ezra
10.28+ Stock Purchase Agreement, dated as of April 23, 1996, by and among the ESOP, the
Company and Joseph A. Gordon, Jr.
10.29+ Meade Instruments Corp. 1997 Stock Incentive Plan
</TABLE>

II-3
<PAGE> 70

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- --------------------------------------------------------------------------------
<C> <S>
10.30+ Form of Agreement of Merger, by and between the Company and the predecessor of
the Company.
10.31+ Preferred Stock Redemption Agreement, dated as of January 31, 1997, by and
between the Company and Churchill
11.1+ Statement re Computation of Per Share Earnings
23.1 Consent of Price Waterhouse LLP
23.2+ Consent of O'Melveny & Myers LLP (included in Exhibit 5.1)
23.3 Consent of Price Waterhouse LLP
24.1+ Power of Attorney
27.1+ Financial Data Schedule
99.1+ Consents of Future Directors
</TABLE>

- ---------------

+ Previously filed.

(B) FINANCIAL STATEMENT SCHEDULES.

All schedules are omitted because they are not required, are not
applicable, or the information is included in the Financial Statements or Notes
thereto.

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 71

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 3 to the Registration Statement (No. 333-21123) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Irvine, County of Orange, State of California, on the 24th day of March,
1997.

MEADE INSTRUMENTS CORP.

By: /s/ STEVEN G. MURDOCK
------------------------------------
Steven G. Murdock
President and Chief Operating
Officer

Pursuant to the requirements of the Securities Act, this Amendment No. 3 to
the Registration Statement (No. 333-21123) has been signed by the following
persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ----------------------------------- ---------------
<C> <S> <C>

* Chairman of the Board and Chief March 24, 1997
- ----------------------------------- Executive Officer (Principal
John C. Diebel Executive Officer)

/s/ STEVEN G. MURDOCK Director, President and Chief March 24, 1997
- ----------------------------------- Operating Officer
Steven G. Murdock

* Vice President -- Finance and Chief March 24, 1997
- ----------------------------------- Financial Officer (Principal
Brent W. Christensen Financial and Accounting Officer)

* Director and Senior Vice President March 24, 1997
- ----------------------------------- of North American Sales
Joseph A. Gordon, Jr.

*By: /s/ STEVEN G. MURDOCK
- -----------------------------------
Steven G. Murdock
Attorney-in-Fact
</TABLE>

II-5
<PAGE> 72

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
------- --------------------------------------------------------------------- -----------
<C> <S> <C>
1.1+ Form of Underwriting Agreement.......................................
3.1+ Certificate of Incorporation of the Company, as amended..............
3.2+ Bylaws of the Company................................................
4.1 Specimen stock certificate...........................................
5.1+ Opinion of O'Melveny & Myers LLP.....................................
10.1+ Form of Directors' and Officers' Indemnity Agreement.................
10.2+ Exchange Agreement, dated April 23, 1996, among Messrs. John C.
Diebel, Steven G. Murdock, Ronald Ezra and Joseph A. Gordon, Jr. (the
"Stockholders") and the Company......................................
10.3+ Redemption Agreement, dated April 23, 1996, among the Stockholders
and the Company......................................................
10.4+ Securities Purchase Agreement, dated April 23, 1996, among Churchill
ESOP Capital Partners, A Minnesota Limited Partnership ("Churchill"),
and the Company......................................................
10.5+ Series A Common Stock Purchase Warrant, dated April 23, 1996, issued
to Churchill.........................................................
10.6+ Shareholder Agreement, dated April 23, 1996, among the Stockholders,
Churchill and the Company............................................
10.7+ Industrial Lease (Single Tenant; Net; Stand-Alone), dated December
20, 1996, between The Irvine Company and the Company.................
10.8+ Indemnity Agreement, dated April 23, 1996, among the Stockholders,
the Company and Churchill............................................
10.9+ Employment Agreement, dated April 23, 1996, between John C. Diebel
and the Company......................................................
10.10+ Employment Agreement, dated April 23, 1996, between Steven G. Murdock
and the Company......................................................
10.11+ Employment Agreement, dated April 23, 1996, between Ronald Ezra and
the Company..........................................................
10.12+ Employment Agreement, dated April 23, 1996, between Joseph A. Gordon,
Jr. and the Company..................................................
10.13+ Meade Instruments Corp. Employee Stock Ownership Plan (the "ESOP"),
effective as of March 1, 1996, together with Form of Amendments No. 1
and No. 2 to the ESOP................................................
10.14+ Employee Stock Ownership Trust Agreement, dated as of March 1, 1996,
between the Company and Wells Fargo Bank, N.A. ......................
10.15+ Employee Stock Ownership Plan Loan and Pledge Agreement, dated April
23, 1996, between the ESOP and the Company...........................
10.16+ Loan and Security Agreement, dated as of April 23, 1996, between the
Company and Fleet Capital Corporation................................
10.17+ Purchase and Sales Agreement, dated as of December 29, 1994, between
the Company and Weidy Optical Co., Ltd. .............................
</TABLE>

<PAGE> 73

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
------- --------------------------------------------------------------------- -----------
<C> <S> <C>
10.18+ Standard Industrial/Commercial Single-Tenant Lease-Net, dated as of
November 20, 1992, between the Company and Rossmore Enterprises......
10.19+ Promissory Note, dated July 8, 1995, between the Company and John C.
Diebel...............................................................
10.20+ Form of Trademark Distribution Agreement for EEC Countries...........
10.21+ Form of Trademark Distribution Agreement for Non-EEC Countries.......
10.22+ Incentive Compensation Agreement, dated as of October 4, 1995,
between the Company and Brent Christensen............................
10.23+ Standard Industrial/Commercial Multi-Tenant Lease-Gross, dated as of
January 31, 1996, by and between the Company and CNH, LLC............
10.24+ Celtic Master Lease, dated as of February 23, 1995, by and between
the Company and Celtic Leasing Corp. ................................
10.25+ Stock Purchase Agreement, dated as of April 23, 1996, by and among
the ESOP, the Company, the Diebel Living Trust u/d/t dated January
12, 1995 and John C. Diebel..........................................
10.26+ Stock Purchase Agreement, dated as of April 23, 1996, by and among
the ESOP, the Company, the Murdock 1986 Trust u/d/t dated October 23,
1986 and Steven G. Murdock...........................................
10.27+ Stock Purchase Agreement, dated as of April 23, 1996, by and among
the ESOP, the Company and Ronald Ezra................................
10.28+ Stock Purchase Agreement, dated as of April 23, 1996, by and among
the ESOP, the Company and Joseph A. Gordon, Jr. .....................
10.29+ Meade Instruments Corp. 1997 Stock Incentive Plan....................
10.30+ Form of Agreement of Merger, by and between the Company and the
predecessor of the Company...........................................
10.31+ Preferred Stock Redemption Agreement, dated as of January 31, 1997,
by and between the Company and Churchill.............................
11.1+ Statement re Computation of Per Share Earnings.......................
23.1 Consent of Price Waterhouse LLP......................................
23.2+ Consent of O'Melveny & Myers LLP (included in Exhibit 5.1)...........
23.3 Consent of Price Waterhouse LLP......................................
24.1+ Power of Attorney....................................................
27.1+ Financial Data Schedule..............................................
99.1+ Consents of Future Directors.........................................
</TABLE>

- ---------------

+ Previously filed.

<PAGE> 1
EXHIBIT 4.1

MEADE INSTRUMENTS CORP.

NUMBER SHARES

INCORPORATED UNDER THE LAWS OF THE CUSIP 583062 10 4
STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITION

THIS CERTIFIES THAT

IS THE RECORD HOLDER OF

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE, OF

- -------------------------------MEADE INSTRUMENTS CORP.-------------------------

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized Attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

/s/ STEVEN MURDOCK /s/ JOHN C. DIEBEL
- ---------------------------------- ----------------------------------
PRESIDENT, CHIEF OPERATING OFFICER [SEAL] CHAIRMAN OF THE BOARD AND
AND SECRETARY CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:

U.S. STOCK TRANSFER CORPORATION

TRANSFER AGENT
AND REGISTRAR,

AUTHORIZED SIGNATURE
<PAGE> 2
MEADE INSTRUMENTS CORP.

The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common UNIF GIFT MIN ACT -_________ Custodian ________
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants with the right of under Uniform Gifts to Minors
survivorship and
not as tenants in common Act__________________________
(State)

Additional abbreviations may also be used though not in the above list.

For Value Received,_____________________________hereby sell(s), assign(s) and
transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------

_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OR ASSIGNEE(S)

_______________________________________________________________________________

_______________________________________________________________________________
of the Shares of capital stock represented by the within Certificate and do(es)
hereby irrevocably constitute and appoint______________________________________
Attorney to transfer the said Shares on the books of the within named
Corporation with full power substitution in the premises.

Dated ______________ ____________________________________________________

____________________________________________________
NOTE: The signature to this assignment must
correspond with the name as written upon the face of
the certificate in every particular, without
alteration or enlargement or any change whatever.
Signature must be guaranteed.

Signature(s) Guaranteed

By____________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad.15.

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated March 12, 1997,
relating to the financial statements of Meade Instruments Corp., which appears
in such Prospectus. We also consent to the references to us under the headings
"Experts" and "Selected Financial Data" in such Prospectus. However, it should
be noted that Price Waterhouse LLP has not prepared or certified such "Selected
Financial Data."

PRICE WATERHOUSE LLP

Costa Mesa, California
March 24, 1997

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated February 6, 1997,
relating to the financial statements of Meade Merger Corp., which appears in
such Prospectus.

PRICE WATERHOUSE LLP

Costa Mesa, California
March 24, 1997