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 March 31, 1999.

                                       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                        May 14, 1999
Common Stock, $.01 par value                80,278,682  Shares


<PAGE>



9
                                  MERISEL, INC.

                                      INDEX


                                                                 Page Reference
PART I   FINANCIAL INFORMATION

                  Consolidated Balance Sheets as of                      1-2
                  March 31, 1999 and December 31, 1998

                  Consolidated Statements of Operations for the
                  Three Months Ended March 31, 1999 and 1998               3

                  Consolidated Statements of Cash Flows for the
                  Three Months Ended March 31, 1999 and 1998               4

                  Notes to Consolidated Financial Statements             5-8

                  Management's Discussion and Analysis of               9-18
                  Financial Condition and Results of Operations

                  Quantitative and Qualitative Market Risk Disclosure     18

PART II  OTHER INFORMATION                                             19-21

                  SIGNATURES                                              22


<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  may
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,  and (viii) other
risks  detailed  in this  report.  These  factors are  discussed  in more detail
elsewhere in this report. 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>




                          PART 1. FINANCIAL INFORMATION


Item 1.  Financial Statements
<TABLE>
<CAPTION>

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

                                     ASSETS

                                                                               March 31,               December 31,
                                                                                  1999                     1998
                                                                           -------------------      -------------------
<S>                                                                        <C>                      <C>
CURRENT ASSETS:
Cash and cash equivalents                                                             $24,780                  $36,341
Accounts receivable (net of allowances
of $15,122 and $20,476 for 1999 and 1998, respectively)                               178,796                  202,128
Inventories                                                                           472,680                  587,317
Prepaid expenses and other current assets                                              17,229                   14,193
Deferred income taxes                                                                     885                      865
                                                                           -------------------      -------------------
  Total current assets                                                                694,370                  840,844

PROPERTY AND EQUIPMENT, NET                                                            88,178                   79,719

COST IN EXCESS OF NET ASSETS
  ACQUIRED, NET                                                                        24,202                   24,309

OTHER ASSETS                                                                              494                      448
                                                                           -------------------      -------------------

TOTAL ASSETS                                                                         $807,244                 $945,320
                                                                           ===================      ===================












                           See  accompanying  notes  to  consolidated  financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

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

<S>                                                                          <C>                    <C> 
CURRENT LIABILITIES:
Accounts payable                                                                  $489,626               $623,673
Accrued liabilities                                                                 48,302                 31,737
Long-term debt and capitalized lease obligations - current                           3,179                  3,692
                                                                             -------------------    --------------------
  Total current liabilities                                                        541,107                659,102

Long-term debt                                                                     129,313                129,360
Capitalized lease obligations                                                        2,320                  2,605
                                                                             -------------------    --------------------
TOTAL LIABILITIES                                                                  672,740                791,067

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, authorized 1,000,000
  shares; none issued or outstanding
Common stock, $.01 par value, authorized
  150,000,000 shares; 80,278,683 and 80,272,683 shares
  outstanding for 1999 and 1998, respectively                                          803                    803
Additional paid-in capital                                                         282,392                282,380
Accumulated deficit                                                               (139,004)              (118,495)
Accumulated other comprehensive income                                              (9,687)               (10,435)
                                                                             -------------------    --------------------
Total stockholders' equity                                                         134,504                154,253
                                                                             -------------------    --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $807,244               $945,320
                                                                             ===================    ====================











                       See  accompanying  notes  to  consolidated  financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                                                                                    Three Months Ended
                                                                                        March 31,
                                                                         1999                          1998
                                                                  -------------------------     -------------------------

<S>                                                                 <C>                             <C>       
NET SALES                                                               $  1,255,197                    $1,101,670

COST OF SALES                                                              1,190,069                     1,039,919
                                                                  -------------------------     -------------------------

GROSS PROFIT                                                                  65,128                        61,751

SELLING, GENERAL &
  ADMINISTRATIVE EXPENSES                                                     55,122                        49,093

LITIGATION-RELATED CHARGE                                                     21,000
                                                                  -------------------------     -------------------------

OPERATING (LOSS) INCOME                                                      (10,994)                       12,658

INTEREST EXPENSE                                                               2,818                         3,783

OTHER EXPENSE                                                                  6,626                         5,090
                                                                  -------------------------     -------------------------

(LOSS) INCOME BEFORE INCOME TAXES                                            (20,438)                        3,785

INCOME TAX PROVISION                                                              71                           149
                                                                  -------------------------     -------------------------

NET (LOSS) INCOME                                                        $   (20,509)                     $  3,636
                                                                  =========================     =========================

NET (LOSS) INCOME PER SHARE (BASIC AND DILUTED)
                                                                          $   (0.26)                       $  0.05
                                                                  =========================     =========================

WEIGHTED AVERAGE NUMBER OF SHARES
  BASIC                                                                       80,278                        80,152
  DILUTED                                                                     80,278                        80,389
                                                                  =========================     =========================










                           See  accompanying  notes  to  consolidated  financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                                                                                   Three Months Ended March 31,
                                                                                  1999                     1998
                                                                            ------------------      -------------------
<S>                                                                         <C>                     <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                                                $(20,509)                  $3,636
Adjustments to reconcile net (loss) income to net
  cash provided by operating activities:
  Depreciation and amortization                                                     2,963                    2,509
  Provision for doubtful accounts                                                   4,227                    1,844
Changes in operating assets and liabilities:
  Accounts receivable                                                              18,997                   (6,464)
  Inventories                                                                     114,637                   (4,794)
  Prepaid expenses and other current assets                                        (3,082)                  (1,180)
  Accounts payable                                                               (134,046)                  82,149
  Accrued liabilities                                                              16,545                      372
                                                                            ------------------      -------------------
Net cash (used for) provided by operating activities                                 (268)                  78,072
                                                                            ------------------      -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                (11,111)                  (5,062)
                                                                            ------------------      -------------------
Net cash used for investing activities                                            (11,111)                  (5,062)
                                                                            ------------------      -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit                                                                   33,200
Repayments under revolving line of credit                                                                  (33,200)
Repayments under other financing arrangements                                        (846)                    (418)
Proceeds from issuance of Common Stock                                                 12                      557
                                                                            ------------------      -------------------
                                                                            ------------------      -------------------
Net cash (used for) provided by financing activities                                 (834)                     139
                                                                            ------------------      -------------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                               652                      105
                                                                            ------------------      -------------------

NET (DECREASE) INCREASE IN CASH AND
  CASH EQUIVALENTS                                                                (11,561)                  73,254

CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                                                           36,341                   36,447
                                                                            ------------------      -------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $24,780                 $109,701
                                                                            ==================      ===================






                           See  accompanying  notes  to  consolidated  financial statements.
</TABLE>


<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 leading distributor of computer
hardware and software products.  Through its main operating subsidiary,  Merisel
Americas,  Inc. ("Merisel Americas"),  and its subsidiaries the Company operates
three distinct business units: United States distribution, Canadian distribution
and the Merisel Open Computing Alliance (MOCA(TM)). The Company markets products
and  services  throughout  the  United  States  and  Canada,  and  has  achieved
operational  efficiencies that have made it a valued partner to a broad range of
computer  resellers,   including  value-added  resellers  ("VARs"),   commercial
resellers,   and  retailers.   Through   MOCA(TM),   the  Company  supports  Sun
Microsystems' UNIX(R)-based products and complementary third-party products.

The  information for the three months ended March 31, 1999 and 1998 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 generally accepted accounting
principles have been omitted  pursuant to the requirements of the Securities and
Exchange Commission, although the Company believes that the disclosures included
in  these  financial  statements  are  adequate  to  make  the  information  not
misleading.  Certain amounts for 1998 have been reclassified to conform with the
1999  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, 1998.

2. New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and  Hedging   Activities"  ("SFAS  133"),  which  is  effective  for  financial
statements  issued for periods  beginning  after June 15, 1999. The Company will
adopt SFAS 133 as required in January 2000. SFAS 133 requires all derivatives to
be  recorded  on the  balance  sheet at fair  value  with  changes in fair value
reflected in income or equity, depending on the nature of the hedge. The Company
is in the process of  evaluating  the effect that this new standard will have on
the Company's financial statements.



<PAGE>


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


3. 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 first quarter is the 13-week period ending
on the Saturday nearest to March 31. For simplicity of presentation, the Company
has  described  the  interim  periods  and  year-end  period  as of March 31 and
December 31, respectively.

4. Comprehensive Income

In June 1997,  the FASB issued  Statement of Financial  Accounting  Standard No.
130,  "Reporting for  Comprehensive  Income"  ("SFAS 130").  SFAS 130, which the
Company  adopted  in the  first  quarter  of  1998,  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)
                                                                    Three Months Ended
                                                                        March 31,
                                                               1999                    1998
                                                               ----                    ----

<S>                                                          <C>                       <C>   
Net (Loss) Income                                            $(20,509)                 $3,636
Other comprehensive income:
  Foreign currency translation adjustments                        748                     117
                                                        --------------------     ------------------

Comprehensive income                                         $(19,761)                 $3,753
                                                        ====================     ==================
</TABLE>

5. Earnings Per Share

The Company  calculates  earnings  per share in  accordance  with  Statement  of
Financial  Accounting Standard No. 128, "Earnings Per Share." Basic earnings per
share is  calculated  using the  average  number of common  shares  outstanding.
Diluted  earnings  per share is computed  on the basis of the average  number of
common shares outstanding plus the effect of outstanding stock options using the
"treasury stock" method.



<PAGE>


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


The following table is a  reconciliation  of the weighted average shares used in
the  computation  of basic and  diluted  EPS for the  income  statement  periods
presented herein:
<TABLE>
<CAPTION>

                                                                            (in thousands)
                                                                          Three Months Ended
                                                                               March 31,
Weighted average shares outstanding                                  1999                     1998
-----------------------------------                                  ----                     ----
<S>                                                             <C>                      <C> 

Basic                                                                80,278                   80,152
Assumed exercises of stock options                                                               237
                                                             ---------------------    ---------------------

Diluted                                                              80,278                   80,389
                                                             =====================    =====================
</TABLE>

6.    Supplemental Disclosure of Cash Flow Information

Cash received in the three-month periods ended March 31 for interest and income 
taxes was as follows:

                                                (in thousands)
                                         1999                         1998
                                         ----                         ----
              Interest                   $858                         $768
              Income taxes               $473                         $248

7.       Segment Information

In 1998, the Company implemented  Statement of Financial Accounting Standard No.
131, "Disclosure about Segments of an Enterprise and Related Information" ("SFAS
131").  SFAS 131 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 131, the Company has determined
it has three operating  segments:  the United States distribution  segment,  the
Canadian  distribution segment, and MOCA. Each of these segments has a dedicated
management team and is managed separately primarily because of geography (United
States and Canada) and differences in product categories,  marketing  strategies
and customer base (MOCA).



<PAGE>


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


The Company does not maintain separate stand-alone financial statements prepared
in accordance  with  generally  accepted  accounting  principles for each of its
operating  segments.  In accordance  with SFAS 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
                                                                      March 31, 1999
                                                                      (in thousands)
                                      -------------------------------------------------------------------------------

                                           United
                                           States              MOCA               Canada                Total
<S>                                          <C>               <C>                 <C>                <C>       
Net sales to external customers              $789,682          $201,801            $263,714           $1,255,197
Segment profit contribution(A)                                    7,460(A)                                 7,460(A)
Segment operating (loss) profit(A)            (21,969)                                3,515              (18,454) (A)

</TABLE>
<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                      March 31, 1998
                                                                      (in thousands)
                                      -------------------------------------------------------------------------------

                                           United
                                           States              MOCA               Canada                Total
<S>                                        <C>               <C>                   <C>                <C>       
Net sales to external customers            $749,899          $116,399              $235,372           $1,101,670
Segment profit contribution(A)                                  7,026(A)                                   7,026(A)
Segment operating profit(A)                   2,818                                   2,814                5,632(A)

</TABLE>


Geographical Area Net Sales:
                               Three months ended
                                    March 31,
                                    1999 1998
                     -------------------    -------------------
United States              $ 991,483               $ 866,298
Canada                       263,714                 235,372

                     -------------------    -------------------
Total Net Sales           $1,255,197              $1,101,670
                     ===================    ===================


Note A: For each of its operating  segments,  the Company evaluates  performance
based upon operating (loss) profit or profit contribution.  However, the Company
does not allocate corporate overhead,  depreciation and amortization,  or shared
operating  expenses  to the MOCA  operating  segment.  As a result,  the Company
believes that the segment profit contribution for MOCA in the tables above would
be  substantially  lower than the  amounts  shown if such costs were  allocated.
Corporate overhead,  amortization and shared operating expenses are allocated to
Canada.  Segment operating (loss) profit for the United States business includes
all corporate  overhead and amortization  not allocated to Canada,  and in 1999,
segment operating loss includes the litigation-related charge.



<PAGE>


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


GENERAL

Merisel,  Inc., a Delaware  corporation and a holding company (together with its
subsidiaries,  "Merisel" or the "Company"), is a leading distributor of computer
hardware and software products.  Through its main operating subsidiary,  Merisel
Americas,  Inc. ("Merisel Americas"),  and its subsidiaries the Company operates
three distinct business units: United States distribution, Canadian distribution
and the Merisel Open Computing Alliance (MOCA(TM)). The Company markets products
and  services  throughout  the  United  States  and  Canada,  and  has  achieved
operational  efficiencies that have made it a valued partner to a broad range of
computer  resellers,   including  value-added  resellers  ("VARs"),   commercial
resellers,   and  retailers.   Through   MOCA(TM),   the  Company  supports  Sun
Microsystems' UNIX(R)-based products and complementary third-party products.

RESULTS OF OPERATIONS

Three  Months  Ended March 31, 1999 as Compared to the Three  Months Ended March
31, 1998.

Net sales  increased  13.9% from  $1,101,670,000  in the quarter ended March, 31
1998 to  $1,255,197,000  in the  quarter  ended  March 31,  1999.  The  increase
resulted from a 14.5% increase in net sales for the U.S. and a 12.0% increase in
Canada.  The U.S.  growth rate resulted from increased  sales of 73% in the MOCA
business  segment and 46% for the retail  customer  group,  combined  with sales
growth of 1% and 2% for the VAR and commercial  customer  groups,  respectively.
The growth rate in the MOCA business  segment  reflected in substantial part the
acquisition  by the  Company  of  several  new large Sun  Microsystems  reseller
accounts  during  1998,  and the  Company  does not expect  that  growth rate to
continue.  The growth rate in Canada in terms of Canadian dollars was 17.8%, but
the  decline in the value of the  Canadian  dollar  hampered  the growth rate in
terms of U.S. dollars.

Hardware and accessories  accounted for 79% of net sales and software  accounted
for 21% of net sales in the first  quarter of 1999,  as  compared to 78% and 22%
for the same categories, respectively, for the first quarter of 1998.

Gross profit  increased 5.5% or $3,377,000 from $61,751,000 in the first quarter
of 1998 to  $65,128,000  in the 1999 period.  Gross  profit as a  percentage  of
sales,  or gross margin,  decreased  from 5.6% in the 1998 period to 5.2% in the
1999 period.  Gross  margins in the United States and Canada were 5.1% and 5.6%,
respectively,  for the  first  quarter  of  1999,  compared  to 5.6%  and  5.8%,
respectively,  for the first  quarter of 1998.  Gross  margins  were  positively
affected by the favorable resolution of customer dispute issues that resulted in
a reduction  of accounts  receivable  allowances.  The  decrease in margins as a
percentage of sales has resulted in large part from intense  pricing  pressures,
as well as  changes  in  vendor  terms  and  conditions,  particularly  in price
protection.  The  margin  decrease  is also  partially  the result of changes in
customer  concentration  and  mix and  product  mix.  Gross  margins  were  also
negatively  affected  by  lower  vendor  rebates  as  a  result  of  lower  than
anticipated sales. The Company has committed resources to address the

<PAGE>



                   
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


issue of  declining  margins by focusing  attention on more  profitable  product
lines,  expanding the Company's customer base, and enhancing customer support by
segmenting  customers by business model and geographical  location and assigning
those customers to dedicated sales teams. The Company is also continuing efforts
to improve the  controls  and  management  supervision  over  margin  management
related activities such as sales execution and processes.  There is no assurance
that the Company's  efforts to improve  margins will be successful.  The Company
continues to face intense competitive pricing pressures,  which escalated during
the fourth  quarter of 1998 and  continue  to  persist.  In  addition,  changing
manufacturer  terms  and  conditions,  particularly  in price  protection,  have
contributed  to greater  inventory risk and  necessitated  changes in purchasing
practices that in turn have affected selling and pricing.

Selling, general and administrative expenses increased by 12.3% from $49,093,000
in the  first  quarter  of 1998 to  $55,122,000  in the first  quarter  of 1999.
However,  selling,  general and administrative expenses as a percentage of sales
decreased  slightly  from  4.5% of sales in 1998 to 4.4% for the same  period in
1999.  Selling,  general and  administrative  expenses in the 1999  quarter were
negatively  affected  by the U.S.  implementation  of SAP,  which  required  the
training of 1,400 associates over an eight-week period during the quarter.

The  depreciation  of the  approximately  $50  million in  capital  expenditures
associated with the  implementation  of the SAP operating  system in the U.S. in
April 1999 is expected to result in  additional  depreciation  and  amortization
expense in future periods of more than $2 million per quarter.  The Company also
expects to incur  approximately  $1 million in expenses in the second quarter of
1999 for post "go-live" SAP costs and  approximately  $3.3 million in the second
and third quarters of 1999 for expenses associated with Year 2000 compliance. In
addition, the payroll and payroll-related costs of employees directly associated
with the SAP project,  which were capitalized prior to the implementation,  will
be expensed in future periods as these  employees  will be integrated  back into
the operations of the business.

The Company  also  expects  that,  notwithstanding  that it  considered  the SAP
implementation  to be a success,  particularly  given its scope and  complexity,
sales  and  profitability  in the  second  quarter  of 1999  will be  negatively
affected by issues that arise in transitioning to a new operating system such as
SAP.

In the first  quarter of 1999,  the  Company  recorded  a charge of  $21,000,000
relating to the settlement of the litigation  pending in Delaware Chancery Court
between  the Company and  certain  holders and former  holders of the  Company's
12-1/2% Senior Notes.  The charge  represents  amounts  payable  pursuant to the
settlement  agreement as well as certain costs related to the settlement and the
litigation.  The Company is currently in negotiations  with its insurers seeking
to  recover a  substantial  portion  of the  litigation  and  settlement  costs,
although  there is no assurance that the Company will be successful in obtaining
any significant reimbursement. See Part II Item 1. "Legal Proceedings."



<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


As a result of the above items,  operating  income decreased by $23,652,000 from
$12,658,000 for the first quarter of 1998 to a loss of $10,994,000 for the first
quarter of 1999. Excluding the charge related to the noteholder litigation,  the
Company would have had operating  income of $10,006,000 for the first quarter of
1999.

Interest Expense; Other Expense; and Income Tax Provision

Interest  expense for the Company  decreased  25.5% from  $3,783,000  in 1998 to
$2,818,000 in 1999. The decrease in interest  expense is primarily  attributable
to the capitalization of interest related to the SAP implementation in the first
quarter of 1999.

Other expenses for the Company  increased  from  $5,090,000 for the three months
ended March 31, 1998 to $6,626,000 for the same period in 1999. This increase is
due primarily to a $1,734,000  increase in asset  securitization  fees which are
included in other expense.  The increased  securitization  fees are due in large
part to increased sales of accounts receivable in order to fund sales growth and
daily  operations.  The  average  proceeds  drawn  from  the  sale  of  accounts
receivable at month end under the Company's securitization  facilities increased
from  $291,846,000 for the three months ended March 31, 1998 to $438,223,000 for
the same period in 1999.

The income tax  provision  decreased  from an expense of $149,000  for the three
months  ended  March 31,  1998 to an expense of $71,000  for the same  period in
1999. In both periods,  the income tax rate reflects only 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 provisions
to offset federal income taxes.

Consolidated Net Loss

On a  consolidated  basis,  net income for the Company  decreased from income of
$3,636,000  for the three months  ended March 31, 1998 to a loss of  $20,509,000
for the three  months ended March 31, 1999 due to the factors  described  above.
Net income per share  decreased  from $0.05 per share for the three months ended
March 31, 1998 to a net loss of $0.26 per share for the same period of 1999.

SYSTEMS AND PROCESSES

In April 1999,  Merisel  completed the conversion of its U.S.  operations to the
SAP  client/server   operating  system.   The  Company  converted  its  Canadian
operations from a mainframe to the SAP client/server  operating system in August
1995. With the U.S.  implementation  complete,  the U.S. and Canadian operations
are each operating on a single platform.  SAP is an enterprise-wide system which
integrates substantially all functional areas of

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


the business in a real-time  environment.  The new system is designed to provide
greater  transaction  functionality,  real-time  information  access,  automated
controls, flexibility, and custom pricing applications.

YEAR 2000 ISSUES

Introduction

The term  "Year  2000  issue" is a general  term used to  describe  the  various
problems  that  may  result  from the  improper  processing  of  dates  and date
sensitive  calculations  by  computers  and other  equipment as the year 2000 is
approached  and  reached.  These  problems  generally  arise  from the fact that
computers and equipment have  historically  used two-digit fields that recognize
dates  using the  assumption  that the first two  digits are "19." On January 1,
2000,  systems using  two-digit date fields could recognize a date using "00" as
the year 1900 rather than the year 2000.

Year 2000 Project and the Company's State of Readiness

The Company  believes that  implementation  of the SAP  operating  system in the
U.S., which was completed in April 1999, will address its major Year 2000 issues
for its core information  technology ("IT") systems. See "Systems and Processes"
above. The Company has developed a plan for addressing the remainder of its Year
2000 issues which focuses on the following six areas: core IT systems;  off-line
IT  subsystems;  technical  infrastructure  (e.g.,  networks,  servers,  desktop
computers);   vendor/customer   interfaces   (consisting   of  electronic   data
interchange or "EDI");  facilities (including security systems,  elevators,  and
heating and cooling systems); and third-party  suppliers,  vendors and customers
("External  Parties").  For the first five areas,  the Company's  Year 2000 plan
consists of the following phases: (1) conducting an inventory of items with Year
2000  implications;  (2) assessment of Year 2000 compliance;  (3) remediation or
replacement of material items that are determined not to be Year 2000 compliant;
(4) testing  (including  re-testing  of material  items that were  remediated or
replaced); and (5) certification of Year 2000 compliancy.

The Company has  completed the  inventory  phase with respect to all areas.  The
assessment  phase is  substantially  completed and the  remediation  and testing
phases are in process and are  scheduled to be  substantially  completed for the
core IT systems during the second quarter of 1999,  with the remaining  areas to
be completed during the third quarter of 1999. In addition,  the Company intends
to conduct  integration  testing  during the early part of the third  quarter of
1999.  The  Company  currently  plans to complete  the Year 2000  project by the
beginning of the fourth quarter of 1999.



<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


Costs

The Company currently estimates that the aggregate cost of its Year 2000 project
will be approximately $4.0 million,  although the total amount could be greater.
Approximately  $700,000 had been spent  through the first  quarter of 1999.  The
aggregate  cost  estimate  excludes the cost of  implementing  the SAP operating
system in the U.S.  and costs  incurred  pursuant  to the  Company's  technology
upgrade  strategy  where  the  upgrades  were not  accelerated  due to Year 2000
issues.  In addition,  a portion of the  estimated  total costs of the Year 2000
project  will be  funded by  reallocation  of  existing  resources  rather  than
incurring  incremental  costs. This reallocation of resources is not expected to
have a significant impact of the day-to-day operations of the Company, including
any  material  effect on the  implementation  of any IT project.  The  Company's
aggregate  cost  estimate  does not  include  costs that may be  incurred by the
Company as a result of the failure of any third parties, including suppliers, to
become  Year 2000 ready or costs to  implement  any  contingency.  The Year 2000
project costs are expensed by the Company as incurred.

Risks

The  Company  believes  that the  completion  of its Year 2000  project  and the
implementation  of the SAP  operating  system  in the U.S.  will  result  in the
Company being Year 2000  compliant in a timely manner.  However,  the failure to
correct a material  Year 2000 problem could result in an  interruption  in, or a
failure of,  certain  normal  business  activities  or  operations,  which could
materially and adversely affect the Company's  results of operations,  liquidity
and  financial  condition.  In addition,  if third parties that provide goods or
services  that  are  critical  to the  Company's  business  activities  fail  to
adequately  address  their Year 2000 issues,  there could be a similar  material
adverse  effect on the Company.  The Company  believes that its most  reasonably
likely worst case scenario is the failure of such a third party.  Such a failure
could result in, for example,  the inability of the Company to ship  product,  a
telecommunications  failure  at one or more of the  Company's  call  centers,  a
decrease in customer orders,  delays in product deliveries from vendors or power
outages at one or more of the  Company's  facilities.  The  Company's  Year 2000
project is expected to  significantly  reduce the Company's level of uncertainty
about the Year 2000 problem and, in particular,  about the Year 2000  compliance
and readiness of material External Parties.  The Company believes that, with the
completion of its Year 2000 project as scheduled, the possibility of significant
interruptions of normal operations should be reduced.

Contingency Plans

As part of the Company's Year 2000 project, Year 2000-specific contingency plans
are being  developed.  The Company  expects that these plans will continue to be
modified as the Company obtains additional  information  regarding the Company's
internal  systems and equipment during the remediation and testing phases of its
Year 2000 program and regarding the status of the Year


<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


2000  readiness  of  External  Parties.  The Company  expects  these plans to be
finalized by the date of completion of all other areas of the Year 2000 project.
In addition,  as a normal course of business,  the Company maintains and deploys
contingency  plans as part of its disaster recovery program that are designed to
address  various  other  potential  business  interruptions.  These plans may be
applicable  to address  the  failure  of  External  Parties to provide  goods or
services  to the  Company as a result of their  failure  to be Year 2000  ready.
During  1999,  the Company  intends to expand its disaster  recovery  program to
cover systems for which detailed contingency plans do not currently exist.

Readers are cautioned that forward-looking statements contained under "Year 2000
Issues" should be read in conjunction with the Company's  disclosures  under the
heading: "SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION" on page ii.

VARIABILITY OF QUARTERLY RESULTS AND SEASONALITY

Historically,  the  Company  has  experienced  variability  in its net sales and
operating margins on a quarterly basis and expects these patterns to continue in
the  future.   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 of existing  products;  (iii) the
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. In addition,  quarterly
variability  could be  affected  by the Year 2000 issue by  shifting  demand for
computer  products during 1999 and future years. Due to the factors noted above,
as well as the dynamic  characteristics  of the  computer  product  distribution
industry,  the  Company's  revenues  and  earnings  may be subject  to  material
volatility, particularly on a quarterly basis.

Additionally,   the  Company's  net  sales  in  the  fourth  quarter  have  been
historically  higher than in its other 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. As
a result of this pattern,  the Company's  working  capital  requirements  in the
fourth quarter have typically been greater than other quarters. Net sales in the
Canadian  operations  are also  historically  strong in the first quarter of the
fiscal year,  which is primarily due to buying  patterns of Canadian  government
agencies. See "Liquidity and Capital Resources" below.



<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Activity

Net cash used by  operating  activities  during the three months ended March 31,
1999 was $268,000. The primary sources of cash from operating activities include
a decrease in accounts receivable of $18,997,000, and a decrease in inventory of
$114,637,000  from the unusually high level of inventory at the end of 1998. The
primary  use of cash  during the  period  includes a  $134,046,000  decrease  in
accounts payable,  which resulted in part from  industry-wide  changes in vendor
terms and conditions.

Net cash used in  investing  activities  consisted  of capital  expenditures  of
$11,111,000.  The expenditures  were primarily  related to costs associated with
development and implementation of SAP and with other information systems.

Net cash used for financing  activities was $834,000 and was comprised primarily
of repayments under capitalized lease obligations and bank debt.

Securitization Facilities

Funds  generated by the sale of  receivables  in the U.S.  are provided  through
Merisel  Capital  Funding,  Inc.  ("Merisel  Capital  Funding"),  a wholly owned
subsidiary of Merisel  Americas.  Merisel Capital Funding's sole business is the
ongoing  purchase of trade  receivables from Merisel  Americas.  Merisel Capital
Funding  sells  these   receivables,   in  turn,   under  an  agreement  with  a
securitization  company, whose purchases yield proceeds of up to $500,000,000 at
any point in time.  Merisel Capital Funding is a separate  corporate entity with
separate  creditors who, upon its liquidation,  are entitled to be satisfied out
of  Merisel  Capital  Funding's  assets  prior to any  value  in the  subsidiary
becoming available to the subsidiary's  equity holder. This agreement expires in
October 2003.

Funds are also provided to Merisel Canada,  Inc.  ("Merisel  Canada")  through a
receivables purchase agreement with a securitization company. In accordance with
this agreement,  Merisel Canada sells receivables to the securitization company,
which  yields  proceeds  of up to  CND$150,000,000  at any  point in  time.  The
facility  expires  December  12,  2000,  but is  extendible  by notice  from the
securitization company, subject to the Company's approval.

Under these  securitization  agreements,  the receivables are sold at face value
with payment of a portion of the purchase price being deferred.  As of March 31,
1999, the total amount outstanding under these agreements was $404,812,000. Fees
incurred in connection with the sale of accounts receivable for the three months
ended March 31, 1999 were  $6,376,000  compared to  $4,642,000  incurred for the
three months ended March 31, 1998 and are recorded as other expense.



<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


Debt Obligations, Financing Sources and Capital Expenditures

At March 31, 1999, Merisel, Inc. had outstanding  $125,000,000  principal amount
of 12-1/2%  Senior Notes due 2004 (the "12.5%  Notes").  The 12.5% Notes provide
for an  interest  rate of 12.5%  payable  semi-annually.  By  virtue of being an
obligation of Merisel, Inc., the 12.5% Notes are effectively subordinated to all
liabilities of the Company's subsidiaries, including trade payables, and are not
guaranteed by any of the Company's  subsidiaries.  The indenture relating to the
12.5% Notes contains certain covenants that, among other things,  limit the type
and amount of additional indebtedness that may be incurred by the Company or any
of its subsidiaries  and imposes  limitations on investments,  loans,  advances,
asset sales or transfers,  dividends and other payments,  the creation of liens,
sale-leasebacks, transactions with affiliates and certain mergers.

At March  31,  1999,  the  Company  had  promissory  notes  outstanding  with an
aggregate balance of $6,257,000.  Such notes provide for interest at the rate of
approximately 7.7% per annum and are repayable in 48 and 60 monthly installments
that  commenced  February 1, 1996,  with balloon  payments due at maturity.  The
notes  are  collateralized  by  certain  of  the  Company's  real  property  and
equipment.

Merisel Americas entered into a Loan and Security Agreement dated as of June 30,
1998 (the "Loan and Security  Agreement")  with a subsidiary  of Bank of America
NT&SA  ("BA"),  acting as agent,  that  provides for  borrowings  on a revolving
basis.  Effective  April 1,  1999,  the  obligations  of BA  under  the Loan and
Security  Agreement were assumed by Bank of America NT&SA. The Loan and Security
Agreement permits  borrowings of up to $100,000,000  outstanding at any one time
(including  face  amounts  of  letters of  credit),  subject to meeting  certain
availability  requirements under a borrowing base formula and other limitations.
Borrowings  under the Loan and  Security  Agreement  are  secured by a pledge of
substantially  all of the inventory held by Merisel  Americas.  Borrowings  bear
interest  at the rate of LIBOR plus a  specified  margin,  or, at the  Company's
option,  the agent's prime rate. An annual fee of 0.375% is payable with respect
to the unused portion of the commitment.  The Loan and Security  Agreement has a
termination  date of June 30, 2003. No amounts were  outstanding  under the Loan
and Security Agreement as of March 31, 1999.

In addition to its requirements for working capital for operations,  the Company
presently  anticipates that its capital expenditures will be between $35,000,000
and  $45,000,000  for  1999,  primarily  consisting  of  costs  associated  with
information  systems,  including systems for enhancing  electronic  services and
growing  the  Company's  infrastructure,  developing  and  implementing  the SAP
operating  system,   developing  the  Company's  configuration  and  co-location
capabilities,  and upgrading warehouse systems and other Company facilities. The
Company intends to fund its capital  expenditures  primarily through  internally
generated cash and lease financing.



<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


At March 31, 1999, the Company had cash and cash equivalents of $24,780,000.  In
the opinion of management,  anticipated  cash from operations in 1999,  together
with proceeds from the sale of  receivables  under the Company's  securitization
agreements,  trade  credit  from  vendors  and  borrowings  under the  Company's
revolving credit facility, will be sufficient to meet the Company's requirements
for the next 12 months, without the need for additional financing. This assumes,
however,   that  there  are  not  material  adverse  changes  in  the  Company's
relationships with its vendors,  customers or lenders. Any unforeseen event that
adversely  impacts the industry or the Company's  position in the industry could
have a direct and material unfavorable effect on the liquidity of the Company.

ASSET MANAGEMENT

Merisel attempts to manage its inventory  position to maintain levels sufficient
to achieve high product  availability  and same-day order fill rates.  Inventory
levels may vary from period to period,  due to factors  including  increases  or
decreases in sales levels,  Merisel's practice of making large-volume  purchases
when  it  deems  such  purchases  to be  attractive,  and  the  addition  of new
manufacturers and products.  The Company has negotiated  agreements with many of
its manufacturers  that contain stock balancing and price protection  provisions
intended  to  reduce,  in part,  Merisel's  risk of loss due to  slow-moving  or
obsolete inventory or manufacturer price reductions.  The Company is not assured
that these  agreements  will  succeed in reducing  this risk.  In the event of a
manufacturer  price  reduction,  the  Company  generally  receives  a credit for
products  in  inventory.  In  addition,  the  Company  has the right to return a
certain percentage of purchases,  subject to certain limitations.  Historically,
price protection and stock return privileges, as well as the Company's inventory
management  procedures,  have  helped  to  reduce  the risk of loss of  carrying
inventory.  In the past year,  however,  certain computer systems  manufacturers
that are among the Company's  largest  vendors have  announced  changes in price
protection  and other  terms and  conditions  that  could  adversely  affect the
Company.  The  Company  is working  closely  with  these  manufacturers  and has
developed buying procedures and controls to manage inventory purchases to reduce
the potential  adverse  impact from these  changes  while  balancing the need to
maintain sufficient levels of inventory. There is no assurance that such efforts
will be successful in preventing a material adverse effect on the Company.

The  Company   purchases   exchange   contracts  to  minimize  foreign  exchange
transaction  gains and losses.  The Company  intends to continue the practice of
purchasing foreign exchange contracts and is currently  considering  adjustments
to its hedging strategy in an attempt to reduce foreign exchange risks. However,
the risk of foreign exchange transaction losses cannot be completely eliminated.

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
escrow programs and selected bid financing


<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


arrangements. The Company also arranges a wide variety of programs through which
third parties  provide  financing to certain of its  customers.  These  programs
include floor plan financing and hardware and software leasing.  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.  In addition,  the Company  purchases  credit
insurance as it deems appropriate.

COMPETITION

Competition  in  the  computer  products   distribution   industry  is  intense.
Competitive factors include price, brand selection,  breadth and availability of
product  offering,  purchasing  arrangements,  financing  options,  shipping and
packaging accuracy,  speed of delivery, level of training and technical support,
marketing services and programs, and ability to influence a buyer's decision.

Certain of Merisel's  competitors have substantially greater financial resources
than  Merisel.  Merisel's  principal  competitors  for  its  U.S.  and  Canadian
distribution  businesses  include  large United  States-based  distributors  and
aggregators  such  as  Gates/Arrow,   Inacom,  Ingram  Micro,  Pinacor,   Synnex
Information  Technologies,  Inc. and Tech Data, as well as regional distributors
and franchisers.  MOCA's  competitors are Access Graphics,  which is owned by GE
Capital, and Ingram Micro.

Merisel  also  competes  with  manufacturers  that  sell  directly  to  computer
resellers,  sometimes  at prices  below  those  charged by Merisel  for  similar
products. The Company believes its broad product offering, product availability,
prompt  delivery  and  support  services  may  offset  a  manufacturer's   price
advantage.  In addition,  many  manufacturers  concentrate their direct sales on
large computer  resellers  because of the relatively high costs  associated with
dealing with small-volume computer resellers.



Item 3.  QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURE

No material  changes have occurred in the  quantitative  and qualitative  market
risk  disclosure of the Company as presented in the  Company's  Annual Report on
Form 10-K for the period ended December 31, 1998.


<PAGE>


                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings

Effective  April 14, 1997, the Company  entered into a Limited Waiver and Voting
Agreement (the "Limited Waiver  Agreement") with holders of more than 75% of the
outstanding principal amount of the Company's 12-1/2% Senior Notes due 2004 (the
"12.5% Notes").  Pursuant to the terms of the Limited Waiver Agreement, upon the
fulfillment  of certain  conditions,  holders of the 12.5% Notes would  exchange
(the "Exchange")  their 12.5% Notes for common stock of the Company (the "Common
Stock"), which would equal approximately 80% of the outstanding shares of Common
Stock immediately after the Exchange. The Limited Waiver Agreement also provided
that,  immediately  after the  consummation  of the Exchange,  the Company would
issue certain  warrants to the existing  holders of Common Stock. The conditions
to the Exchange  were not met and, on September  19,  1997,  the Limited  Waiver
Agreement  terminated in accordance with its terms.  Prior to the termination of
the Limited Waiver Agreement on September 19, 1997, certain  disagreements arose
between  the  Company  and  certain   holders  of  the  Company's   12.5%  Notes
("Noteholders")  over the interpretation of the Company's  obligations under the
Limited Waiver  Agreement,  including that the Limited Waiver  Agreement did not
require  either the Board of  Directors  of the  Company  (the  "Board")  or the
Company to recommend to its stockholders proposals relating to the proposed debt
restructuring  in which the  Noteholders  would have exchanged their 12.5% Notes
for Common Stock (the "Noteholder  Restructuring")  and that the Company was not
obligated to seek  confirmation  of a "prepackaged  plan" of  reorganization  by
means of the "cramdown" provisions of the Bankruptcy Code. On September 4, 1997,
the  Company  filed suit in  Delaware  Chancery  Court (the  "Delaware  Action")
seeking a declaratory judgment with respect to these issues.

On September  11, 1997,  certain  Noteholders  filed an answer to the  Company's
complaint in the Delaware  Action as well as a counterclaim  against the Company
asserting claims for breach of the Limited Waiver  Agreement,  unjust enrichment
and a declaratory  judgment (the  "Noteholder  Suit").  The Noteholder Suit also
asserted  a claim  for  unjust  enrichment  against  Dwight A.  Steffensen,  the
Company's Chief Executive Officer.  The Noteholder Suit sought damages in excess
of $100 million from the Company. The Company's alleged breaches included, among
other  things,  that the  Board  changed  its  recommendation  with  respect  to
proposals  relating  to  the  Noteholder  Restructuring.  The  Company  and  Mr.
Steffensen  filed  motions  for  judgment  on the  pleadings  on October 7, 1997
seeking to have the Noteholder Suit dismissed.  On January 5, 1998, the Delaware
Chancery  Court (the "Court")  denied both motions.  In January 1999 the Company
and Mr.  Steffensen  filed motions for summary  judgment.  While waiting for the
Court to rule on its motion for  summary  judgment,  the  Company  entered  into
settlement  negotiations with the Noteholders.  On May 10, 1999, the Company and
Mr.  Steffensen  entered into a settlement  agreement (the "Agreement") with the
Noteholders that provides for all of the parties to dismiss their claims against
each other with prejudice. As a result of the settlement, the

<PAGE>


Company  recorded a charge in the first  quarter of 1999 of $21  million,  which
represents  amounts payable  pursuant to the settlement as well as certain costs
related to the  settlement  and the  litigation.  The  Company is  currently  in
negotiations  with its insurers seeking to recover a substantial  portion of the
litigation and settlement costs, although there is no assurance that the Company
will be  successful in obtaining any  significant  reimbursement.  The Agreement
also provided for the dismissal of an action brought by the Noteholders  against
Stonington Partners, Inc. alleging tortious interference.

On March 16, 1998, the Company  received a summons and  complaint,  filed in the
Superior  Court of  California,  County of Santa  Clara,  in a matter  captioned
Official  Unsecured  Creditors  Committee  of Media Vision  Technology,  Inc. v.
Merisel,  Inc. The plaintiff  alleges that certain  executive  officers of Media
Vision Technology,  Inc. ("Media Vision") committed fraud and breached fiduciary
duties owed to Media Vision  through,  inter alia, the improper  recognition and
reporting of sales, revenue and income and the failure to properly recognize and
report product returns during 1993 and 1994,  thereby  overstating the financial
condition of Media Vision as reflected in its financial statements for 1993. The
plaintiff further alleges that the Company aided, abetted, conspired and/or made
possible such acts and omissions of the Media Vision  executives.  The plaintiff
seeks to recover compensatory damages, including interest thereon, exemplary and
punitive  damages,  and costs  including  attorneys'  fees. On May 6, 1998,  the
Company filed a motion to dismiss the complaint on various legal grounds as well
as a motion to strike the punitive  damages prayer.  In response to the motions,
the plaintiff filed a first amended complaint on August 31, 1998, adding a claim
for unfair business  practices under California  Business & Professions Code ss.
17200 and additional allegations. The plaintiff's filing of an amended complaint
mooted the Company's original motions. The Company filed a motion to dismiss the
amended complaint on various grounds and a motion to strike the punitive damages
prayer.  In its  opposition  to the  Company's  motion to strike,  the plaintiff
withdrew its prayer for punitive damages.  On January 15, 1999, the Court issued
an Order  staying  prosecution  of the action  under the  doctrine of  exclusive
concurrent  federal  jurisdiction.  It is unknown  whether  the  plaintiff  will
proceed  further with its action in any forum.  The Company has defended  itself
vigorously against this claim and will continue to do so.

The  Company is  involved  in certain  other  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.



<PAGE>


Item 6. Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  None.


         (b) The  following  Reports on Form 8-K were filed  during the  quarter
ended March 31, 1999.

                  None.



<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: May 15, 1999


                                          Merisel, Inc.



                                          By  /s/ Timothy N. Jenson 
                                          Timothy N. Jenson
                                          Chief Financial Officer and
                                          Senior Vice President, Finance