SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q


(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001.

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         ACT OF 1934

For the transition period from _______________ to ___________

                         Commission File Number 0-17156

                                MERISEL, INC.
               (Exact name of registrant as specified in its charter)

Delaware                                             95-4172359
--------                                             ----------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)

200 Continental Boulevard
El Segundo, CA                                                     90245-0984
-------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip code)


Registrant's telephone number, including area code (310) 615-3080
                                                   --------------


Former name, former address, and former fiscal year, if changed since last year

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes X No _____

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

                                    Number of Shares Outstanding
          Class                           as of October 29, 2001
Common Stock, $.01 par value                7,890,145 Shares


<PAGE>




                                  MERISEL, INC.

                                      INDEX



PART I   FINANCIAL INFORMATION                                    Page Reference

                  Consolidated Balance Sheets as of                         1-2
                  September 30, 2001 and December 31, 2000

                  Consolidated Statements of Operations for the
                  Three and Nine Months Ended September 30, 2001 and 2000     3

                  Consolidated Statements of Cash Flows for the
                  Nine Months Ended September 30, 2001 and 2000               4

                  Notes to Consolidated Financial Statements               5-14

                  Management's Discussion and Analysis of                 15-23
                  Financial Condition and Results of Operations

                  Quantitative and Qualitative Market Risk Disclosure        23


PART II  OTHER INFORMATION                                                   24

                  SIGNATURES                                                 25



<PAGE>


               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION


         Certain statements contained in this Quarterly Report on Form 10-Q,
including without limitation statements containing the words "believes,"
"anticipates," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Merisel, Inc. (the "Company"), or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the effect of (i) economic conditions generally, (ii)
industry growth, (iii) competition, (iv) liability and other claims asserted
against the Company, (v) the loss of significant customers or vendors, (vi)
operating margins, (vii) business disruptions, (viii) the ability to attract and
retain qualified personnel, and (ix) other risks detailed in this report. These
factors are discussed elsewhere in this report, including, without limitation,
under the captions "Legal Proceedings" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations." Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking
statements. The Company disclaims any obligation to update any such factors or
to publicly announce the result of any revisions to any of the forward-looking
statements contained or incorporated by reference herein to reflect future
events or developments.


<PAGE>


<TABLE>
<CAPTION>


                          PART 1. FINANCIAL INFORMATION


Item 1.    Financial Statements

                          MERISEL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                     ASSETS

                                                                              (Unaudited)
                                                                             September 30,             December 31,
                                                                                  2001                     2000
                                                                           -------------------      -------------------
<S>                                                                        <C>                      <C>
Current assets:
  Cash and cash equivalents                                                        $   57,553                $  46,865
  Accounts receivable (net of allowances of $3,249
  and $15,688 for 2001 and 2000, respectively)                                          6,056                   30,504
  Inventories                                                                              34                   60,859
  Prepaid expenses and other current assets                                               446                    8,118
  Deferred income taxes                                                                                            880
                                                                           -------------------      -------------------
    Total current assets                                                               64,089                  147,226

Property and equipment, net                                                             5,429                   27,054
Cost in excess of net assets acquired, net                                                                       3,666
Other assets                                                                                                       335
                                                                           -------------------      -------------------

Total assets                                                                         $ 69,518               $  178,281
                                                                           ===================      ===================

</TABLE>




              See accompanying notes to consolidated financial statements.



<PAGE>

<TABLE>
<CAPTION>

                          PART 1. FINANCIAL INFORMATION

                          MERISEL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                         (In thousands, except share data)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                (Unaudited)          December 31, 2000
                                                                               September 30,
                                                                                    2001
                                                                             -------------------    --------------------

<S>                                                                          <C>                    <C>
Current liabilities:
  Accounts payable                                                                    $ 21,900               $  99,057
  Accrued liabilities                                                                   21,046                  40,640
  Capitalized lease obligations                                                             30                   1,363
                                                                             -------------------    --------------------
  Total current liabilities                                                             42,976                 141,060

Long-term debt                                                                                                  23,803

Stockholders' equity:
  Convertible preferred stock, $.01 par value, authorized
  1,000,000 shares; 150,000 shares issued and outstanding                               16,636                  15,677
  Common stock, $.01 par value, authorized 15,000,000
    shares; 7,969,305 and 8,030,905 shares issued and
    outstanding for 2001 and 2000, respectively                                             80                      80
  Additional paid-in capital                                                           281,676                 282,619
  Accumulated deficit                                                                 (271,752)               (275,450)
  Treasury stock, $.01 par value, 61,600 shares                                            (98)
  Accumulated other comprehensive loss                                                                          (9,508)
                                                                             -------------------    --------------------
Total stockholders' equity                                                              26,542                  13,418
                                                                             -------------------    --------------------

Total liabilities and stockholders' equity                                            $ 69,518              $  178,281
                                                                             ===================    ====================
</TABLE>


            See accompanying notes to consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>

                           MERISEL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except per share data)
                                   (Unaudited)

                                                           Three Months Ended                        Nine Months Ended
                                                              September 30,                            September 30,
                                                        2001              2000                    2001               2000
                                                   ---------------     ----------------    ------------------    -----------------

<S>                                                  <C>                 <C>                   <C>                <C>
Net sales                                            $45,013             $399,480              $328,824           $1,932,328

Cost of sales                                         39,466              399,061               296,301            1,867,142
                                                   ---------------     ----------------    ------------------    -----------------

Gross profit                                           5,547                  419                32,523               65,186

Selling, general & administrative expenses             4,102               40,360                33,620              137,037
Restructuring charge                                    (135)              10,964                 2,190               10,964
Impairment charge                                        546                9,859                29,962               29,346
                                                   ---------------     ----------------    ------------------    -----------------

Operating income (loss)                                1,034              (60,764)              (33,249)            (112,161)

Interest (income) expense, net                          (521)               1,523                   284               10,097
Other (income) expense, net                              (26)              (4,960)                  945                3,659
                                                   ---------------     ----------------    ------------------    -----------------

Income (loss) from continuing operations
before income taxes and extraordinary item             1,581              (57,327)              (34,478)            (125,917)


Income tax provision                                     299                  147                   946                  460
                                                   ---------------     ----------------    ------------------    -----------------

Income (loss) from continuing operations before
  Extraordinary item                                   1,282              (57,474)              (35,424)            (126,377)

Discontinued operations:
  Income from discontinued operations                                       3,228                                     20,130
  Gain on sale of discontinued operations                                                        36,250
                                                   ---------------     ----------------    ------------------    -----------------
Income (loss) before extraordinary item                1,282              (54,246)                  826             (106,247)

Extraordinary gain on extinguishment of debt, net                          10,514                 2,872               32,170
                                                   ---------------     ----------------    ------------------    -----------------


Net income (loss)                                     $1,282             $(43,732)               $3,698             $(74,077)
                                                   ===============     ================    ==================    =================

Preferred dividends                                      326                  369                   959                  369
                                                   ---------------     ----------------    ------------------    -----------------
Net income (loss) available to common
  stockholders                                          $956             $(44,101)               $2,739             $(74,446)
                                                   ===============     ================    ==================    =================

Net income (loss) per share (basic and diluted):
Income (loss) from continuing operations before
  extraordinary items less preferred dividends      $   0.12           $    (7.20)             $  (4.53)         $    (15.78)

Income from discontinued operations                                          0.40                                       2.51
Gain on sale of discontinued operations                                                            4.51
Extraordinary gain on extinguishment of debt, net                            1.31                   .36                 4.00
                                                   ---------------     ----------------    ------------------    -----------------
Net income (loss) available to common
  stockholders                                       $  0.12            $   (5.49)             $    .34            $   (9.27)
                                                   ===============     ================    ==================    =================

Weighted average number of shares
  Basic                                                8,014                8,033                 8,025                8,032
  Diluted                                              8,019                8,033                 8,025                8,032
</TABLE>



           See accompanying notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                           MERISEL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

                                                                                 Nine Months Ended September 30,
                                                                                  2001                     2000
                                                                            ------------------      -------------------
<S>                                                                         <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                                  $   3,698              $   (74,077)
Less: income from discontinued operations, net                                                                 20,130
                                                                            ------------------      -------------------
Income (loss) from continuing operations                                               3,698                  (94,207)
Adjustments to reconcile income (loss) from continuing operations
  to net cash (used for) provided by operating activities:
  Depreciation and amortization                                                        6,024                   16,053
  Provision for doubtful accounts                                                     (3,769)                  13,775
  Impairment losses                                                                   29,962                   29,346
  Gain on sale of property and equipment                                                                      (10,455)
  Gain on sale of MOCA                                                               (36,250)
  Extraordinary gain on extinguishment of debt                                        (2,872)                 (32,170)
Changes in operating assets and liabilities, net of dispositions:
  Accounts receivable                                                                (26,948)                  87,735
  Inventories                                                                         17,500                  296,453
  Prepaid expenses and other current assets                                            5,859                    3,622
  Accounts payable                                                                   (29,203)                (312,041)
  Accrued liabilities                                                                (18,001)                  10,960
                                                                            ------------------      -------------------
Net cash (used for) provided by  operating activities of continuing                  (54,000)                   9,071
operations
                                                                            ------------------      -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                      (514)                  (1,853)
Proceeds from sale of Canada, net of cash sold                                        14,686
Proceeds from sale of MOCA                                                            36,250
Proceeds from sale of property and equipment, net disposal cost                          740                   15,888
                                                                            ------------------      -------------------
Net cash provided by investing activities of continuing operations                    51,162                   14,035
                                                                            ------------------      -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit                                             35,963                   40,000
Repayments under revolving line of credit                                                                     (40,000)
Proceeds from issuance of convertible preferred stock                                                          15,000
Purchase of treasury stock                                                               (98)
Purchase of bonds                                                                    (20,931)                 (22,814)
Repayments under other financing arrangements                                         (1,333)                  (6,391)
                                                                            ------------------      -------------------
Net cash provided by (used for) financing activities of continuing                    13,601                  (14,205)
operations

Effect of exchange rate on cash                                                          (75)                  (2,588)

NET CASH USED IN DISCONTINUED OPERATIONS                                                                      (31,912)

                                                                            ------------------      -------------------
NET DECREASE IN CASH AND
  CASH EQUIVALENTS OF CONTINUING OPERATIONS                                           10,688                  (25,599)

                                                                            ------------------      -------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF  PERIOD                                       46,865                   57,557
                                                                            ------------------      -------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $   57,553             $     31,958
                                                                            ==================      ===================

Supplemental disclosure of cash flow information:

Cash paid (received) during the period for:
    Interest                                                                            $697                  $10,870
    Income taxes                                                                       5,732                   (1,653)

</TABLE>


           See accompanying notes to consolidated financial statements.


<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


1.   General

Merisel, Inc., a Delaware corporation and a holding company (together with its
subsidiaries, "Merisel" or the "Company"), is a distributor of software
licensing products and, through its subsidiary Optisel, Inc. ("Optisel"), a
provider of logistics and electronic services. Until July 28, 2001, the Company
also operated a Canadian distribution business, which the Company sold to Synnex
Information Technologies, Inc. ("Synnex") effective as of July 28, 2001.
Effective as of October 27, 2000, the Company completed the sale of its Merisel
Open Computing Alliance ("MOCA") business unit. Additionally, on December 14,
2000, the Company announced that its U.S. computer hardware and software
distribution business would focus solely on software licensing and that the
balance of the U.S. distribution business would be wound down.

The information for the three and nine months ended September 30, 2001 and 2000
has not been audited by independent accountants, but includes all adjustments
(consisting of normal recurring accruals) which are, in the opinion of
management, necessary for a fair presentation of the results for such periods.

Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to the
requirements of the Securities and Exchange Commission ("SEC"), although the
Company believes that the disclosures included in these financial statements are
adequate to make the information not misleading. Certain amounts for 2000 have
been reclassified to conform with the 2001 presentation. The consolidated
financial statements as presented herein should be read in conjunction with the
consolidated financial statements and notes thereto included in Merisel's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.

2.   Liquidity

At September 30, 2001, the Company had cash and cash equivalents of
approximately $57 million. The Company has developed an operating plan for 2001
that focuses upon maximizing cash in winding down its U.S. distribution business
(other than software licensing), and further developing its software licensing
and Optisel businesses. In addition to working capital and capital expenditure
requirements related to its software licensing and Optisel businesses, the
Company also has obligations relating to the wind-down of the U.S. distribution
business. Management believes that it will have sufficient cash flow and working
capital to meet the Company's future operating needs and cash requirements for
at least the next 12 months.


<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)

3.   New Accounting Pronouncements

In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141,  "Business  Combinations."  SFAS No. 141 requires  the  purchase  method of
accounting  for  business  combinations   initiated  after  June  30,  2001  and
eliminates the  pooling-of-interests  method.  The Company does not believe that
the  adoption of SFAS No. 141 will have a  significant  impact on the  financial
statements.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived   Assets."  SFAS  No.  144  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of." SFAS No. 144 retained  substantially all of the requirements of
SFAS No. 121 while  resolving  certain  implementation  issues.  SFAS No. 144 is
effective  for fiscal  years  beginning  after  December  15,  2001,  with early
application encouraged.  The Company is evaluating the impact of the adoption of
this standard and has not yet determined the effect of adoption on its financial
position  and  results of  operations.  The  Company  does not plan to adopt the
standard before required.

4.   Fiscal Year

The Company's fiscal year is the 52- or 53-week period ending on the Saturday
nearest to December 31. The Company's third quarter is the 13-week period ending
on the Saturday nearest to September 30. For simplicity of presentation, the
Company has described the interim periods and year-end period as of September 30
and December 31, respectively.

5.       Discontinued Operations

Effective as of October 27, 2000, the Company completed the sale to Arrow
Electronics, Inc. ("Arrow") of its Merisel Open Computing Alliance ("MOCA")
business unit, which provides enterprise-class solutions for Sun Microsystems
servers and the Solaris operating system to authorized resellers. The stock sale
agreement pursuant to which the sale was made provided for a purchase price of
$110 million, subject to adjustments based on changes in working capital
reflected on the closing balance sheet of Merisel Open Computing Alliance, Inc.,
plus an additional amount up to $37,500,000 payable by the end of March 2001
based upon MOCA's ability to retain existing and gain additional business (the
"Additional Payment"). The actual purchase price (excluding the Additional
Payment but including amounts received as deferred purchase price payments) was
approximately $179.8 million of which approximately $57.5 million was for
amounts outstanding under the Merisel asset securitization facility. Based on
the purchase price, in the fourth quarter of 2000 the Company realized a gain,
net of costs associated with the sale, of approximately $25.2 million. In March
2001 the Company received an Additional Payment of $37,500,000 which, after
deducting certain obligations relating to the payment, netted $36,250,000, which
was recorded in the quarter ended March 31, 2001 and resulted in a gain of
$36,250,000.

<PAGE>

MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


In connection with the sale, Merisel and Arrow entered into a fee-based
transition services agreement pursuant to which Merisel provides logistics
management, order processing, configuration and information technology services.
The agreement, which had an initial term of six months, has been extended
through February 1, 2002 and will not be extended beyond that date.

The Company has reclassified its consolidated financial statements to reflect
the sale of the MOCA business and to segregate the revenues, direct costs and
expenses, assets and liabilities, and cash flows of this business. The net
operating results and net cash flows of this business have been reported as
"Discontinued Operations" in the accompanying consolidated financial statements.

Summarized financial information for the discontinued operations is as follows:
<TABLE>
<CAPTION>

                                                     (In thousands)                            (In thousands)
                                               For the Three Months Ended                For the Nine Months Ended
                                                   September 30, 2000                        September 30, 2000
                                         ---------------------------------------    -------------------------------------

<S>                                                          <C>                                     <C>
Net Sales                                                    $181,539                                $740,299
Income from
   Discontinued Operations                                      3,228                                  20,130

</TABLE>

6.       Restructuring Charges

During the third and fourth quarters of 2000, the Company announced
restructuring plans that included reductions in its workforce and in December
2000 announced that it would wind down virtually all of its U.S. distribution
business, excluding software licensing. As a result, the Company recorded
restructuring charges of $10,964,000 and $6,672,000 in the third quarter of 2000
and the fourth quarter of 2000, respectively. The Company reduced its workforce
by approximately 2,200 full-time positions as a result of such restructuring
plans.

During the second quarter of 2001, the Company  further reduced its workforce by
approximately 50 full-time positions.  As a result, an additional  restructuring
charge of $888,000  was  recorded.  Also during the second  quarter of 2001,  in
connection  with the  wind-down  of the U.S.  business  the Company  recorded an
additional  restructuring  charge of  $1,437,000  related to facility  and lease
commitments.  During the third quarter of 2001, the Company made the decision to
further reduce its workforce by approximately 45 full-time positions, which when
completed will result in the Company  having  approximately  65 employees.  As a
result, an additional restructuring charge of $946,000 was recorded. Also during
the third quarter of 2001, in connection with the wind-down of the
<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


U.S. business the Company was able to negotiate favorable settlements related to
certain lease and contract commitments. As a result, the Company reduced the
accrued liability related to the previously recorded restructuring charge by
$1,081,000, which, net of the additional $946,000 restructuring charge, resulted
in a $135,000 reduction in the accrued liability.

As of September 30, 2001, $7,819,000 of total restructuring costs had not been
paid and were included in accrued liabilities on the balance sheet. The
following table sets forth the activity and balances of the restructuring
reserve account from December 31, 2000 to September 30, 2001:
<TABLE>
<CAPTION>

                                                                          (In thousands)
                                         December 31, 2000                                            September 30, 2001
                                              Balance             Net Charges        Payments               Balance
<S>                                      <C>                      <C>                <C>               <C>
Type of cost:
Severance and related costs                $  5,214                 $  1,834          $  4,860          $  2,188
Facility, lease and other                     8,529                      356             3,254             5,631
                                      ------------------------- ----------------- ---------------- --------------------------
Total                                       $13,743                 $  2,190          $  8,114          $  7,819
                                      ========================= ================= ================ ==========================
</TABLE>


7.       Disposition of Assets and Impairment Losses

Effective as of July 28, 2001, the Company completed the sale to Synnex of its
Canadian distribution business ("Merisel Canada"), which is a full-line
distributor of computer hardware and software products. The purchase price was
CDN$30.0 million, of which CDN$1.0 million is deposited in an escrow account
pending resolution of indemnification claims made during the 12 months after
closing.

As a result of the impending sale of Merisel Canada, the Company reviewed the
recoverability of its long-lived assets, including identifiable intangible
assets, to determine if there had been any impairment. Based on this review, the
Company recorded an impairment charge of $29.4 million as of June 30, 2001. The
impairment charge includes $13.0 million for the SAP operating system, $9.6
million for the Company's foreign translation adjustment, $3.6 million for the
unamortized goodwill attributable to Merisel Canada, and $3.2 million related to
various other assets.



<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


The following tables disclose the unaudited Pro Forma Condensed Consolidated
Statements of Operations for the nine-month periods ended September 30, 2001 and
September 30, 2000 assuming that the disposition occurred on the first date of
the respective periods.
<TABLE>
<CAPTION>

                                                                               (In thousands)
                                                                           Pro Forma Adjustments
                                                                   --------------------------------------
                                                  Historical         Merisel                                    Pro Forma
                                                   9/30/01           Canada         (a)        Other
                                               ----------------    ----------------       ---------------      ----------------

<S>                                            <C>                 <C>                     <C>                    <C>
Net sales                                      $     328,824       $      295,682                              $      33,142
Cost of sales                                        296,301              278,679                                     17,622
                                               ----------------    ----------------       ---------------      ----------------
Gross profit                                          32,523               17,003                                     15,520
Selling, general & administrative expenses            33,620               15,041              $ 2,127    (b)         20,706
Restructuring charge                                   2,190                (229)                                      2,419
Impairment charge                                     29,962               29,416                                        546
                                               ----------------    ----------------       ---------------      ----------------
Operating loss                                       (33,249)             (27,225)              (2,127)               (8,151)
Interest expense (income), net                           284                1,799                  834    (c)           (681)
Other expense, net                                       945                  334                                        611
                                               ----------------    ----------------       ---------------      ----------------
Loss from continuing operations
  before income taxes and extraordinary item         (34,478)             (29,358)              (2,961)               (8,081)
Income tax provision                                     946                  297                                        649
                                               ----------------    ----------------       ---------------      ----------------
Loss from continuing operations
  before extraordinary item                     $    (35,424)      $      (29,655)        $     (2,961)         $     (8,730)
                                               ================    ================       ===============      ================
Net loss per share from continuing operations
  before extraordinary item less preferred
  dividends                                      $     (4.53)                                                    $     (1.21)
                                               ================    ================       ===============      ================
Weighted Average Number of
  Shares Outstanding                                   8,025                                                           8,025
                                               ================    ================       ===============      ================
</TABLE>


<PAGE>


MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)

<TABLE>
<CAPTION>

                                                                               (In thousands)
                                                                           Pro Forma Adjustments
                                                                   --------------------------------------
                                                  Historical         Merisel                                    Pro Forma
                                                   9/30/00           Canada         (a)        Other
                                               ----------------    ----------------       ---------------      ----------------

<S>                                            <C>                 <C>                    <C>                      <C>
Net sales                                      $   1,932,328      $       521,821                             $    1,410,507
Cost of sales                                      1,867,142              492,985                                  1,374,157
                                               ----------------    ----------------       ---------------      ----------------
Gross profit                                          65,186               28,836                                     36,350
Selling, general & administrative expenses           137,037               37,196             $  2,021    (b)        101,862
Restructuring charge                                  10,964                2,676                                      8,288
Impairment charge                                     29,346                                                          29,346
                                               ----------------    ----------------       ---------------      ----------------
Operating (loss) income                             (112,161)             (11,036)              (2,021)             (103,146)
Interest expense, net                                 10,097                  323                  543    (c)         10,317
Other expense (income), net                            3,659                4,327                                       (668)
                                               ----------------    ----------------       ---------------      ----------------
Loss from continuing operations
  before income taxes and extraordinary item        (125,917)             (15,686)              (2,564)             (112,795)
Income tax provision                                     460                  360                                        100
                                               ----------------    ----------------       ---------------      ----------------
Loss from continuing operations
  before extraordinary item                    $    (126,377)     $       (16,046)       $      (2,564)       $     (112,895)
                                               ================    ================       ===============      ================

Net loss per share from continuing operations
  before extraordinary item                    $      (15.78)                                                  $      (14.06)
                                               ================    ================       ===============      ================

Weighted Average Number of
  Shares Outstanding                                   8,032                                                           8,032
                                               ================    ================       ===============      ================
</TABLE>

(a)  Merisel Canada - Represents the historical unaudited balances of Merisel
     Canada for the nine months ended September 30, 2001 and September 30, 2000
     which are eliminated to reflect the sale of Merisel Canada to Synnex.

(b)  Selling, General and Administrative Expenses - Consists of corporate costs
     allocated by the Company to Merisel Canada (corporate overhead,
     administrative expenses, etc.) that would not have been eliminated due to
     the sale of Merisel Canada.

(c)  Interest Expense - Consists of interest expense allocated by the Company to
     Merisel Canada (related to the Company's 12-1/2% senior notes) that would
     not have been eliminated due to the sale of Merisel Canada.

During the quarter ended September 30, 2001, the Company decided to halt further
development of its front-end Web-based customer interface for its Optisel
business. The Company recorded an impairment charge of $546,000, which
represented book value of previously capitalized costs of this application.

As the result of its continuing losses and conditions in its business and the
industry in which it operated at June 30, 2000, the Company reviewed the
recoverability of its long-lived assets, including identifiable intangible
assets, to determine if there had been any impairment. The review of the
Company's intangible assets indicated that the excess of cost over net assets
acquired related to the U.S. distribution business was impaired. Accordingly,
the

<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


Company recorded an impairment loss totaling $19,487,000, representing the
unamortized goodwill attributable to the U.S. distribution business, in the
second quarter of 2000. In the third quarter of 2000, the Company announced a
restructuring plan that would significantly reduce its facilities and workforce.
In relation to this, the Company evaluated the fixed asset investments that
supported these former facilities and personnel. As a result, in the third
quarter of 2000 a $9,859,000 impairment charge related to redundant and non-used
assets determined to have no value to the Company was recorded.

8.       Extraordinary Gain on Debt Extinguishment

In January 2001, the Company purchased $20,175,000 of its outstanding 12-1/2%
Senior Notes due 2004 (the "12.5% Notes") for an aggregate cost of $17,149,000,
reducing the outstanding balance of the 12.5% Notes to $3,628,000, which were
redeemed at a total cost of $3,782,000 in February 2001. As a result, the
Company recognized an extraordinary gain of approximately $2,872,000 for the
nine months ended September 30, 2001. During the second, third and fourth
quarters of 2000, the Company purchased $101,197,000 aggregate principal amount
of its 12.5% Notes for an aggregate cost of $50,982,000. As a result, the
Company recognized an extraordinary gain, net of unamortized debt issuance
costs, of approximately $49,003,000 in 2000 of which $32,170,000 was recorded
during the nine months ended September 30, 2000. As a result of such purchases
and redemption, none of the 12.5% Notes remain outstanding and the Company's
obligations under the indenture relating to the 12.5% Notes have been
discharged. See "Liquidity and Capital Resources - Debt Obligations, Financing
Sources and Capital Expenditures."

9.       Comprehensive Income

The Company  calculates  comprehensive  income in accordance  with SFAS No. 130,
"Reporting  Comprehensive  Income."  SFAS  No.  130  establishes  standards  for
reporting and displaying  comprehensive  income and its components in a full set
of general purpose  financial  statements.  Comprehensive  income is computed as
follows:
<TABLE>
<CAPTION>

                                                              (In thousands)                         (In thousands)
                                                            Three Months Ended                      Nine Months Ended
                                                               September 30,                          September 30,
                                                         2001                2000                2001              2000
                                                         ----                ----                ----              ----

<S>                                                      <C>               <C>                    <C>            <C>
Net income (loss)                                        $1,282            $(43,732)              $3,698         $(74,077)
Other comprehensive loss -
   Foreign currency translation adjustments                                    (369)                               (1,210)
                                                    ----------------    ----------------     -------------    ---------------

Comprehensive income (loss)                              $1,282            $(44,101)              $3,698         $(75,287)
                                                    ================    ================     =============    ===============
</TABLE>


<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


10.  Earnings Per Share and Stockholders Equity

The Company calculates earnings per share in accordance with SFAS No. 128,
"Earnings Per Share." Basic earnings per share is computed on the basis of the
weighted average number of common shares outstanding. Diluted earnings per share
is computed on the basis of the weighted average number of common shares
outstanding plus the effect of outstanding potential common shares including
stock options, convertible preferred stock and restricted stock units using the
"treasury stock" method.
<TABLE>
<CAPTION>

                                                                (In thousands)                    (In thousands)
                                                              Three months ended                 Nine months ended
                                                                 September 30,                     September 30,
                                                              2001          2000               2001            2000
                                                          ------------- --------------     -------------- ---------------
<S>                                                            <C>          <C>               <C>            <C>
Income (loss) from continuing operations                       $1,282       $(57,474)         $(35,424)      $(126,377)
Preferred stock dividends                                        (326)          (369)             (959)           (369)
                                                          ------------- --------------     -------------- ---------------
Income (loss) available to common stockholders                    956        (57,843)          (36,383)       (126,746)
Income from discontinued operations                                            3,228                            20,130
Gain on sale of discontinued operations                                                         36,250
Extraordinary gain on extinguishment of debt                                  10,514             2,872          32,170
                                                          ------------- --------------     -------------- ---------------
Net income (loss) available to common
         stockholders                                            $956       $(44,101)           $2,739        $(74,446)
                                                          ============= ==============     ============== ===============
</TABLE>

On July 3, 2001 the Company announced that its Board of Directors had authorized
the repurchase of up to $1,000,000 of its common stock to be made from time to
time, in the open market or otherwise. As of September 30, 2001, the Company had
repurchased approximately 61,600 shares under this plan and these amounts have
been reflected as treasury stock in the accompanying balance sheet.
Approximately $900,000 was available under the current board authorization as of
September 30, 2001.

11.      Segment Information

The Company implemented SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information," which requires disclosure of certain
information about operating segments, geographic areas in which the Company
operates, major customers, and products and services. In accordance with SFAS
No. 131, the Company had determined it had three operating segments: the United
States distribution segment, the Canadian distribution segment, and MOCA.
Effective as of October 27, 2000, the Company completed the sale of its MOCA
business segment. MOCA has been treated as discontinued operations in the
accompanying financial statements. The segment data included below has been
restated to exclude amounts related to the

<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)


MOCA business unit. On November 10, 2000, the Company, through its wholly owned
subsidiary Optisel, acquired substantially all of the e-services assets of Value
America. Optisel shares a common management team with the Company's U.S.
software licensing business, however, it maintains a separate strategy and has
been determined to constitute a separate segment under SFAS No. 131.

In accordance with SFAS No. 131, the Company has prepared the following tables
which present information related to each operating segment included in internal
management reports.
<TABLE>
<CAPTION>

                                                               Three months ended September 30, 2001
                                                                          (In thousands)
                                       --------------------------------------------------------------------------------------
                                                            U.S.
                                          Optisel       Distribution      Total U.S.          Canada             Total

<S>                                          <C>           <C>                <C>              <C>                 <C>
Net sales to external customers              $2,814        $11,297            $14,111          $30,902             $45,013
Gross profit                                  1,210          2,629              3,839            1,708               5,547
Operating profit (loss)                                                         2,370           (1,336)              1,034
Total segment assets                          1,421         68,097             69,518                               69,518


</TABLE>
<TABLE>
<CAPTION>
                                                               Three months ended September 30, 2000
                                                                          (In thousands)
                                       --------------------------------------------------------------------------------------
                                                            U.S.
                                          Optisel       Distribution      Total U.S.          Canada             Total

<S>                                                       <C>                <C>              <C>                 <C>
Net sales to external customers                           $269,808           $269,808         $129,672            $399,480
Gross profit                                                (4,719)            (4,719)           5,138                 419
Operating (loss) profit                                    (50,764)           (50,764)         (10,000)            (60,764)
Total segment assets                                       142,205            142,205           64,993             207,198


</TABLE>


<PAGE>



MERISEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)

<TABLE>
<CAPTION>

                                                               Nine months ended September 30, 2001
                                                                          (In thousands)
                                       --------------------------------------------------------------------------------------
                                                            U.S.
                                          Optisel       Distribution      Total U.S.          Canada             Total

<S>                                          <C>           <C>                <C>             <C>                 <C>
Net sales to external customers              $7,279        $25,863            $33,142         $295,682            $328,824
Gross profit                                  2,445         13,075             15,520           17,003              32,523
Operating (loss) profit                                                        (6,024)         (27,225)            (33,249)

</TABLE>

<TABLE>
<CAPTION>


                                                               Nine months ended September 30, 2000
                                                                          (In thousands)
                                       --------------------------------------------------------------------------------------
                                                            U.S.
                                          Optisel       Distribution      Total U.S.          Canada             Total

<S>                                                     <C>                <C>                <C>               <C>
Net sales to external customers                         $1,410,507         $1,410,507         $521,821          $1,932,328
Gross profit                                                36,350             36,350           28,836              65,186
Operating (loss) profit                                                      (101,125)         (11,036)           (112,161)


</TABLE>
The Company does not track operating expenses below the gross profit line
separately for the Optisel and U.S. distribution segments. Therefore, the
Company cannot report operating (loss) profit for these segments.



<PAGE>


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS


GENERAL

The Company was founded in 1980 as Softsel Computer Products, Inc. and changed
its name to Merisel, Inc. in 1990 in connection with the acquisition of
Microamerica, Inc. ("Microamerica"). From 1996 through the first quarter of
1997, the Company engaged in the process of divesting of its operations outside
of the United States and Canada and its operations not involving computer
hardware and software distribution, which resulted in the Company's operations
being focused exclusively in the United States and Canada and consisting of
three distinct business units: United States distribution, Canadian distribution
and the Merisel Open Computing Alliance ("MOCA"). Effective as of October 27,
2000, the Company completed the sale of its MOCA business unit to Arrow
Electronics, Inc. ("Arrow"). On December 14, 2000, the Company announced that
the U.S. distribution business would focus solely on software licensing and that
the balance of the U.S. distribution business would be wound down. Effective as
of July 28, 2001, the Company completed the sale of its Canadian distribution
business to Synnex Information Technologies, Inc. ("Synnex"). On November 10,
2000, the Company acquired substantially all the e-services assets of Value
America, Inc. through the Company's newly formed subsidiary Optisel, which will
leverage the Company's distribution and logistics capabilities to operate a
logistics and e-services business. As a result, Merisel today operates a U.S.
software licensing business and Optisel.

As a result of the sale of its MOCA and Canadian distribution businesses and the
wind-down of its U.S. distribution business excluding software licensing, the
Company has substantial cash balances that are in excess of what it believes it
requires for liquidity for its ongoing businesses and to meet obligations
related to the wind-down. The Company is actively seeking and exploring
acquisition and other investment opportunities, including strategic acquisitions
that would complement the Company's existing businesses.

Discontinued Operations

Effective as of October 27, 2000, the Company completed the sale to Arrow of its
MOCA business unit, which provides enterprise-class solutions for Sun
Microsystems servers and the Solaris operating system to authorized resellers.
The stock sale agreement pursuant to which the sale was made provided for a
purchase price of $110 million, subject to adjustments based on changes in
working capital reflected on the closing balance sheet of Merisel Open Computing
Alliance, Inc., plus an additional amount up to $37.5 million payable by the end
of March 2001 based upon MOCA's ability to retain existing and gain additional
business (the "Additional Payment"). The actual purchase price (excluding the
Additional Payment but including amounts received as deferred purchase price
payments) was approximately $179.8 million of which approximately $57.5 million
was for amounts outstanding under the Merisel asset securitization facility.
Based on the purchase price, in the fourth quarter of 2000 the Company realized
a gain, net of costs associated with the sale, of approximately $25.2 million.
In March 2001 the Company received an Additional Payment of $37.5 million which,
after deducting certain obligations relating to the payment, netted $36.25
million, which was recorded in the quarter ended March 31, 2001 and resulted in
a gain of $36.25 million.
<PAGE>

The Company has reclassified its consolidated financial statements to reflect
the sale of the MOCA business and to segregate the revenues, direct costs and
expenses, assets and liabilities, and cash flows of the business. The net
operating results and net cash flows of this business have been reported as
"Discontinued Operations" in the accompanying consolidated financial statements.

Wind-Down of U.S. Distribution Business

With respect to the U.S. distribution business, in December 2000 the Company
determined that, primarily as a result of a significant contraction in sales and
continuing substantial operating losses, such business would focus solely on
software licensing and the balance of the U.S. distribution business would be
wound down. Although the wind-down was substantially complete by the end of the
first quarter of 2001, the Company has substantial remaining obligations related
to the U.S. distribution business, primarily with respect to leases, vendors and
employee severance. See "Liquidity and Capital Resources" below.

Sale of Merisel Canada

Effective as of July 28, 2001, the Company completed the sale to Synnex of its
Canadian distribution business ("Merisel Canada"), which is a full-line
distributor of computer hardware and software products. The purchase price was
CDN$30.0 million, of which CDN$1.0 million is deposited in an escrow account
pending resolution of indemnification claims made during the 12 months after
closing. In connection with this transaction, in the quarter ended June 30, 2001
the Company recorded an impairment charge of approximately $29.4 million with
respect to Merisel Canada related to the excess book value over expected cash
consideration less transaction fees.

Optisel Business

Through its subsidiary Optisel, in November 2000 the Company acquired
substantially all the e-services assets of Value America, Inc. with the
intention of leveraging the Company's distribution and logistics capabilities to
operate a logistics and electronic services business. Optisel is currently
recruiting clients with back-end systems-support and logistics needs to leverage
the Company's existing capabilities. In connection with the sale of the MOCA
business to Arrow in October 2000, the Company entered into a transition
services agreement with Arrow pursuant to which Optisel is providing fee-based
distribution and logistics services and IT services for MOCA. The agreement,
which provided for a minimum six-month term, has been extended through February
1, 2002 and will not be extended beyond that date. In connection with the sale
of Merisel Canada to Synnex, Merisel and Synnex entered into a fee-based
transition services agreement pursuant to which Optisel agreed to provide
information technology services to Merisel Canada. Synnex converted Merisel
Canada's operations to its systems and terminated the agreement effective
September 11, 2001. Optisel has not yet generated any significant revenue except
under these two transition services agreements. In addition, to support its
electronic services business, Optisel has been developing a front-end Web-based
customer interface to offer future clients along with other e-service offerings,
which could include marketing and advertising services, web development and
design, and interactive call center management and customer service. As a result
of economic conditions generally and with respect to Internet-related businesses
specifically and Optisel's lack of success in generating business, the Company
has decided to halt further development of its front-end Web-based customer

<PAGE>

interface and to discontinue related e-services offerings, however, as
opportunities may arise the Company will continue to offer the types of
electronic services it has provided to MOCA and Synnex. These include Web-based
commerce tools, electronic data interchange and flat file transmissions using
File Transfer Protocol (FTP) of custom price files, inventory data, and point of
sale data. If Optisel were to gain a client that required a front-end Web-based
customer interface and the economics were compelling, development could be
completed in a few months or it could be acquired from a third-party provider.

RESULTS OF OPERATIONS

The Company reported net income of $1,282,000, or $.12 per share, both basic and
dilutive, for the three months ended September 30, 2001, compared to a net loss
of $43,732,000, or $5.49 loss per share, for the 2000 period. The Company
reported net income of $3,698,000, or $.34 per share, both basic and dilutive,
for the nine months ended September 30, 2001, compared to a net loss of
$74,077,000, or $9.27 loss per share, for the 2000 period. The results for 2000
include income from discontinued operations of $3,228,000 for the three months
ended September 30, 2000 and $20,130,000 for the nine months ended September 30,
2000. The discussion and analysis below does not reflect discontinued
operations, but does include the Company's U.S. distribution business and,
through July 28, 2001, its Canadian distribution business.

Three Months Ended September 30, 2001 as Compared to the Three Months Ended
September 30, 2000.

The Company's net sales decreased 89% from $399,480,000 in the quarter ended
September 30, 2000 to $45,013,000 in the quarter ended September 30, 2001. The
decrease resulted from a 96% decline in net sales in the U.S. distribution
business and the fact that the Canadian distribution business was sold effective
July 28, 2001. Net sales for the 2001 period excluding sales from the Canadian
distribution business were $14.1 million. The decrease in net sales for the U.S.
distribution business resulted from the significant contraction in that business
experienced over the course of 2000 due to many factors, which led to the
Company's decision in December 2000 to wind down the business with the exception
of software licensing. Revenues for the U.S. software licensing business were
approximately $68.0 million, $68.0 million and $56.0 million for the first,
second and third quarters of 2000, respectively, and declined to $3.2 million
for the fourth quarter of 2000. For the first quarter of 2001, which followed
the Company's decision in December 2000 that it would not wind down its software
licensing business, revenues for the software licensing business increased 54%
over the fourth quarter of 2000 to approximately $5.0 million, for the second
quarter of 2001 grew 66% over first quarter 2001 to approximately $8.3 million
and for the third quarter of 2001 grew 36% to approximately $11.3 million.
Revenues for the Optisel business for the third quarter of 2001 were $2.8
million, substantially all of which were generated by the MOCA and Synnex
transition services agreements. The Synnex transition services agreement was
terminated effective September 11, 2001. The Arrow transition services agreement
has been extended through February 1, 2002, and will not be extended beyond that
date.

Gross profit increased $5,128,000 from $419,000 in the third quarter of 2000 to
$5,547,000 in the 2001 period. Gross profit as a percentage of sales, or gross
margin, was 12.34% for the three months ended September 30, 2001, which
reflected as a reduction of cost of sales approximately $1,956,000 relating to

<PAGE>

the settlement of certain discontinued vendor accounts, primarily related to the
wind-down of the U.S. business. Gross profit as a percentage of sales, or gross
margin, was .10% for the three months ended September 30, 2000, which reflected
as an increase of cost of sales approximately $13,813,000 relating to the
settlement of certain discontinued vendor accounts. Excluding these adjustments,
gross margin would have been 7.99% for the three months ended September 30, 2001
compared to 3.56% for the three months ended September 30, 2000. The higher
gross margin in the 2001 period was due to the fact that the Canadian
distribution business, which has historically experienced higher margins than
the U.S. distribution business, accounted for approximately 69% of total sales
and, to a lesser extent, to the higher margin generated by Optisel under the
MOCA transition services agreement and higher software licensing margins.
Front-end selling margins in the software licensing business increased from 1.3%
in the third quarter of 2000 to 3.81% in the third quarter of 2001. The increase
in margins was due primarily to changes in customer and vendor mixes and product
offerings.

Selling, general and administrative expenses decreased by 90% from $40,360,000
in the third quarter of 2000 to $4,102,000 in the third quarter of 2001. This
reduction resulted primarily from a decrease in variable expenses due to lower
sales volumes. The Company had approximately $200,000 of favorable adjustments
related to the collection of certain customer accounts related to the wind-down
of the U.S. distribution business which caused a reduction of selling, general
and administrative expenses for the three months ended September 30, 2001.
Excluding these adjustments, selling, general and administrative expenses as a
percentage of sales would have been 9.6% in the three months ended September 30,
2001 compared to 10.1% in the 2000 period.

As a result of the sale of Merisel Canada, selling, general and administrative
expenses as a percentage of sales will increase in future periods because of
certain fixed costs (primarily related to information technology services) that
can no longer be allocated to Merisel Canada. On a pro forma basis, these costs
were $3.2 million for the nine months ended September 30, 2001. The Company
recovered a substantial portion of these costs for the three months ended
September 30, 2001 under the transition services agreement entered into with
Synnex in connection with sale of Merisel Canada, which was terminated effective
September 11, 2001. The Company will be similarly affected by the termination,
effective February 1, 2002, of the Arrow transition services agreement under
which the Company has been providing services for MOCA. While there are variable
costs associated with providing such services that will be eliminated, there are
fixed costs (also primarily related to information technology services) that
have been allocated to Optisel in connection with the transition services
agreement that will remain and be allocated to the software licensing business.
The Company believes that it can significantly, but not completely, reduce its
costs to offset the effect of such termination.

During the third quarter of 2001, the Company made the decision to further
reduce its workforce by approximately 45 full-time positions. As a result, an
additional restructuring charge of $946,000 was recorded. Also during the third
quarter of 2001, in connection with the wind-down of the U.S. business the
Company was able to negotiate favorable settlements related to certain lease and
contract commitments. As a result, the Company reduced the accrued liability
related to the previously recorded restructuring charge by $1,081,000, which,
net of the additional $946,000 restructuring charge, resulted in a $135,000
reduction of the accrued liability.
<PAGE>

As a result of the Company's decision to halt further development of its
front-end Web-based customer interface, the Company has recorded an impairment
charge of $546,000 in the third quarter of 2001. In connection with the
Company's announced restructuring plan, which significantly reduced its
facilities and workforce, the Company recorded an impairment charge of
$9,859,000 related to redundant and non-used assets in the third quarter of
2000.

As a result of the above items, the Company had operating income of $1,034,000
for the three-month period ended September 30, 2001 compared to an operating
loss of $60,764,000 for the three-month period ended September 30, 2000.

In July 2000, the Company purchased $20,105,000 aggregate principal amount of
its outstanding 12-1/2% Senior Notes due 2004 (the "12.5% Notes") for an
aggregate cost of $7,742,000. As a result, the Company recognized an
extraordinary gain, net of unamortized debt issuance costs, of approximately
$10,514,000 for the three months ended September 30, 2000. See "Debt
Obligations, Financing Sources and Capital Expenditures."

Nine Months Ended September 30, 2001 as Compared to the Nine Months Ended
September 30, 2000.

For the nine months ended September 30, 2001, net sales decreased by 83% from
$1,932,328,000 for the nine months ended September 30, 2000 to $328,824,000 for
the nine months ended September 30, 2001 for the reasons described above. Sales
in the Canadian distribution business decreased 43% from $521,821,000 in the
nine months ended September 30, 2000 to $295,682,000 in same period in 2001. The
sales decline reflects the sale of the Canadian business effective July 28, 2001
as well as a year-over-year decline that the Company believes resulted primarily
from management's need to focus on problems in the U.S. distribution business
and diminished vendor credit support, due primarily to heightened vendor
concerns regarding the U.S. business, and related product availability
challenges. Net sales for the U.S. software licensing business decreased 87% to
$24,573,000 from $192,113,000.

Gross profit decreased 50% from $65,186,000 for the nine months ended September
30, 2000 to $32,523,000 for the nine months ended September 30, 2001. Gross
profit as a percentage of sales, or gross margin, was 9.89% for the nine months
ended September 30, 2001, which reflected approximately $11,360,000 of favorable
adjustments relating to the settlement of certain vendor accounts, primarily
related to the wind-down of the U.S. business. Gross profit as a percentage of
sales, or gross margin, was 3.37% for the nine months ended September 30, 2000,
which reflected as an increase of cost of sales approximately $13,813,000
relating to the settlement of certain discontinued vendor accounts. Excluding
these adjustments, gross margin would have been 6.44% for the nine months ended
September 30, 2001 compared to 4.09% for the nine months ended September 30,
2000. Front-end selling margin in the software licensing business was 4.16% for
the nine months ended September 30, 2001, compared to 1.44% for the nine months
ended September 30, 2000. The changes in gross margins are attributable to
substantially the same factors summarized in the discussion of gross margin for
the three months ended September 30, 2001.

Selling, general and administrative expenses decreased by 75% from $137,037,000
in the nine months ended September 30, 2000 to $33,620,000 in the nine months
ended September 30, 2001. Selling, general and administrative expenses as a
percentage of sales increased from 7.09% of sales in 2000 to 10.2% for the same
period in 2001, primarily as a result of decreased sales volumes. The Company
had approximately $4,700,000 of favorable adjustments resulting from the

<PAGE>

collection of certain customer accounts related to the wind-down of the U.S.
distribution business which caused a reduction of selling, general and
administrative expenses for the nine months ended September 30, 2001. Excluding
these adjustments, selling, general and administrative expenses as a percentage
of sales would have been 11.7% in the nine months ended September 30, 2001.

During the second quarter of 2001 the Company further reduced its work force by
approximately 50 full-time positions. As a result, an additional restructuring
charge of $888,000 was recorded. Also during the second quarter of 2001, as part
of the wind-down of the U.S. business the Company recorded an additional
restructuring charge of $1,437,000 related to facility and lease commitments.
During the third quarter of 2001, the Company recorded a net reduction of
$135,000 in the accrued liability related to a previously recorded restructuring
charge, as described in the discussion for the three months ended September 30,
2001.

As a result of the impending sale of its Canadian distribution business, the
Company reviewed the recoverability of its long-lived assets, including
identifiable intangible assets, to determine if there had been any permanent
impairment. Based on this review, at June 30, 2001, the Company recorded
$29,416,000 of impairment charges outlined as follows: $13,000,000 related to
the Company's SAP operating system asset, representing the net book value
related to the Canadian distribution business; $9,612,000 related to the
Company's foreign translation adjustment; $3,559,000 related to the excess of
cost over net assets acquired, representing the unamortized goodwill
attributable to the Canadian distribution business; and $3,245,000 related to
other assets.

As a result of the Company's decision to halt development of its front-end
Web-based customer interface for its Optisel business, the Company has recorded
an impairment charge of $546,000 in the third quarter of 2001.

As the result of its continuing losses and conditions in its business and the
industry in which it operated at June 30, 2000, the Company reviewed the
recoverability of its long-lived assets, including identifiable intangible
assets, to determine if there had been any impairment. The review of the
Company's intangible assets indicated that the excess of cost over net assets
acquired related to the U.S. distribution business was impaired. Accordingly,
the Company recorded an impairment loss totaling $19,487,000, representing the
unamortized goodwill attributable to the U.S. distribution business, in the
second quarter of 2000. In connection with the Company's announced restructuring
plan, the Company recorded an impairment charge of $9,859,000 related to
redundant and non-used assets in the third quarter of 2000.

As a result of the above items, the Company incurred an operating loss of
$33,249,000 for the nine-month period ended September 30, 2001 compared to an
operating loss of $112,161,000 for the nine-month period ended September 30,
2000.



<PAGE>


Interest Expense; Other Expense; and Income Tax Provision

Interest expense decreased from $1,523,000 in the third quarter of 2000 to
income of $521,000 in the third quarter of 2001 and decreased from $10,097,000
in the nine months ended September 30, 2000 to $284,000 in the nine months
September 30, 2001. These decreases were primarily related to the purchases of
the 12.5% Notes that the Company made during the second half of 2000 and the
first quarter of 2001 and also reflect interest income earned on invested cash
balances in the 2001 periods.

Other income for the Company decreased from $4,960,000 in the three months ended
September 30, 2000 to $26,000 in the three months ended September 30, 2001.
Other income for the 2000 period reflects a $8,917,000 gain recorded in
September 2000 on the sale of the building in El Segundo, California owned by
the Company, offset in part by other expense of $3,957,000 comprised primarily
of fees related to the Company's asset securitization facilities. Because of the
termination of the U.S. asset securitization facility in the fourth quarter of
2000 and the Canadian asset securitization facility in the first quarter of
2001, the 2001 period does not include other expense related to these
facilities. Other expense decreased from $3,659,000 in the nine months ended
September 30, 2000 to $945,000 in the nine months ended September 30, 2001,
primarily due to the termination of the asset securitization facilities. Other
expense for the nine months ended September 30, 2000 was offset in part by the
$8,917,000 gain on the sale of the El Segundo building described above and by a
$1,538,000 gain recorded on the sale of the Company's Marlborough,
Masssachusettts call center in January 2000.

The income tax provision was $299,000 and $946,000 for the three and nine months
ended September 30, 2000, respectively, and $147,000 and $460,000 for the same
periods in 2001. In both periods, the income tax rate reflects primarily the
minimal statutory tax requirements in the various states and provinces in which
the Company conducts business, as the Company has sufficient net operating loss
carry forwards to offset federal income taxes in the current period.

Loss from Continuing Operations Before Extraordinary Item

Loss from continuing operations before extraordinary item for the Company
decreased from $126,377,000 for the nine months ended September 30, 2000 to
$35,424,000 for the nine months ended September 30, 2001 due to the factors
described above.

Extraordinary Gain; Gain on Sale of MOCA

In the first quarter of 2001, the Company purchased and redeemed $23,803,000
aggregate principal amount of 12.5% Notes for an aggregate cost of $20,931,000.
As a result, the Company recognized an extraordinary gain, net of unamortized
debt issuance costs, of approximately $2,872,000 for the nine months ended
September 30, 2001. In June 2000, the Company purchased $37,500,000 aggregate
principal amount of the 12.5% Notes for an aggregate cost of $15,000,000. In
July 2000, the Company purchased $20,105,000 aggregate principal amount of its
outstanding 12.5% Notes for an aggregate cost of $7,742,000. As a result, the
Company recognized an extraordinary gain, net of unamortized debt issuance
costs, or approximately $32,170,000 for the nine months ended September 30,
2000. See "Liquidity and Capital Resources - Debt Obligations, Financing Sources

<PAGE>

and Capital Expenditures." Additionally, for the nine months ended September 30,
2001 the Company had a gain of $36,250,000 in connection with the sale of MOCA.

VARIABILITY OF QUARTERLY RESULTS AND SEASONALITY

Historically, the Company has experienced variability in its net sales and
operating margins on a quarterly basis. Management believes that the factors
influencing quarterly variability include: (i) the overall growth in the
computer industry; (ii) shifts in short-term demand for the Company's products
resulting, in part, from the introduction of new products or updates to existing
products; (iii) intensity of price competition among the Company and its
competitors as influenced by various factors; and (iv) the fact that virtually
all sales in a given quarter result from orders booked in that quarter. Due to
the factors noted above, as well as the dynamic qualities of the computer
products distribution industry, the Company's revenues and earnings relating to
its software licensing business may be subject to material volatility,
particularly on a quarterly basis, and the results for any quarterly period may
not be indicative of results for a full fiscal year.

In the U.S., the Company's net sales in the fourth quarter have been
historically higher than in the first three quarters. Management believes that
the pattern of higher fourth quarter sales is partially explained by customer
buying patterns relating to calendar year-end business and holiday purchases in
the fourth quarter. As a result of this pattern, the Company's working capital
requirements in the fourth quarter have typically been greater than other
quarters. The Company expects that it would also experience this type of
seasonality in its Optisel business. See "Liquidity and Capital Resources."

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Activity

Net cash used by operating activities during the nine months ended September 30,
2001 was $54,000,000. The primary uses of cash were decreases in accounts
payable and accrued expenses of $29,203000 and $18,001,000, respectively, which
were primarily related to the wind-down of the U.S. distribution business and an
increase in accounts receivable of $28,404,000, which resulted primarily from
the termination of the Canadian accounts receivable securitization facility in
January. These were offset by a decrease in inventory of $17,500,000, which was
primarily related to the wind-down of the U.S. distribution business.

Net cash provided by investing activities was $51,162,000 and consisted of the
$36,250,000 in net cash proceeds received as an additional payment in connection
with the sale of the MOCA business unit and net cash proceeds of $14,686,000
from the sale of the Canadian distribution business.

Net cash provided by financing activities was $13,601,000. This was comprised
$35,963,000 of borrowings under the Canadian Congress facility and was offset by
$20,931,000 used to purchase and redeem $23,803,000 aggregate principal amount
of the 12.5% Notes.
<PAGE>

Debt Obligations, Financing Sources and Capital Expenditures

In January 2001, the Company purchased $20,175,000 of the 12.5% Notes, reducing
the outstanding balance of the 12.5% Notes to $3,628,000, which were redeemed in
February 2001. As a result, the Company recognized an extraordinary gain, net of
unamortized debt issuance costs, of approximately $2,872,000 in the first
quarter of 2001. During 2000, the Company purchased $101,197,000 aggregate
principal amount of its 12.5% Notes for an aggregate cost of $50,982,000. As a
result, the Company recognized an extraordinary gain, net of unamortized debt
issuance costs, of approximately $49,003,000 in 2000. As a result, none of the
12.5% Notes remain outstanding and the Company's obligations under the indenture
relating to the 12.5% Notes have been discharged.

The Company has obligations relating to the wind-down of the U.S. distribution
business in addition to working capital and capital expenditure requirements
related to its software licensing and Optisel businesses. In addition, the
Company is actively seeking and exploring acquisition and other investment
opportunities, including strategic acquisitions that would complement the
Company's existing businesses. Management believes that it will have sufficient
cash flow and working capital to meet the Company's future operating needs and
cash requirements for at least the next 12 months.

ASSET MANAGEMENT

The Company offers credit terms to qualifying customers and also sells on a
prepay, early-pay, credit card and cash-on-delivery basis. In addition, the
Company has developed a number of customer financing alternatives, including an
escrow program. The Company also arranges a wide variety of programs through
which third parties provide financing to certain of its customers. With respect
to credit sales, the Company attempts to control its bad debt exposure by
monitoring customers' creditworthiness and, where practicable, through
participation in credit associations that provide customer credit rating
information for certain accounts. If the Company's receivables experience a
substantial deterioration in their collectibility, the Company's financial
condition and results of operations may be adversely impacted.


Item 3.  QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURE

At September 30, 2001, the Company had cash investments of approximately
$57,000,000 held in overnight, interest-bearing accounts invested through
high-credit quality financial institutions. As a result of the sale of Merisel
Canada effective July 28, 2001, the Company has no outstanding long-term debt
and no significant foreign currency risk.


<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in certain legal proceedings arising in the ordinary
course of business, none of which is expected to have a material impact on the
financial condition or business of Merisel.


Item 6. Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  10.1-Deferred Compensation Agreement between Merisel, Inc.
                  and Timothy N. Jenson dated September 18, 2001.

         (b) The following Reports on Form 8-K were filed during the quarter
ended September 30, 2001.


                  Current report on Form 8-K dated July 2, 2001 which reported
         that the Company's wholly-owned subsidiary Merisel Americas, Inc.
         ("Americas") entered into a Share Purchase Agreement dated as of July
         2, 2001 between Americas and SYNNEX Information Technologies, Inc.
         ("SYNNEX"), pursuant to which Americas sold the outstanding capital
         stock of Merisel Canada Inc. to SYNNEX.

                  Current report on Form 8-K dated July 3, 2001 which reported
         that the Company's board of directors authorized the Company to
         repurchase up to $1,000,000 of the Company's outstanding common stock.


                  Current report on Form 8-K dated July 27, 2001 which reported
         that the Company completed the sale of the outstanding capital stock of
         Merisel Canada Inc. to SYNNEX. The report includes pro forma condensed
         consolidated balance sheet as of March 31, 2001 and pro forma condensed
         consolidated statements of operations for the three months ended March
         31, 2001 and for the year ended December 31, 2000.




<PAGE>




                                   SIGNATURES





Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date: November 6, 2001


                                  Merisel, Inc.


                                By:/s/ Timothy N. Jenson
                                   ---------------------------------------
                                   Timothy N. Jenson
                                   Chief Executive Officer, President and Chief
                                   Financial Officer
                                  (Principal Executive and Financial Officer)