<PAGE>

                       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 June 30, 1998.

                                                        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                             August 13, 1998
Common Stock, $.01 par value                        80,228,393 Shares


<PAGE>






                                  MERISEL, INC.

                                      INDEX

                                                                  Page Reference
PART I            FINANCIAL INFORMATION

                  Consolidated Balance Sheets as of                        1-2
                  June 30, 1998 and December 31, 1997

                  Consolidated Statements of Operations for the
                  Three Months and Six Months Ended June 30, 1998 and 1997  3

                  Consolidated Statements of Cash Flows for the
                  Six Months Ended June 30, 1998 and 1997                   4

                  Notes to Consolidated Financial Statements               5-8

                  Management's Discussion and Analysis of                  9-19
                  Financial Condition and Results of Operations

PART II           OTHER INFORMATION                                       20-21

                  SIGNATURES                                                23





















                                      

<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

                                                                               June 30,               December 31,
                                                                                 1998                     1997
                                                                          -------------------      -------------------
<S>                                                                       <C>                      <C>    
CURRENT ASSETS:
Cash and cash equivalents                                                           $168,448                  $36,447
Accounts receivable (net of allowances
     of  $19,460 and $18,549 for 1998 and 1997,
     respectively)                                                                   143,225                  162,895
Inventories                                                                          431,013                  462,752
Prepaid expenses and other current assets                                             24,184                   12,352
Deferred income tax benefit                                                              624                      644
                                                                          -------------------      -------------------
   Total current assets                                                              767,494                  675,090

PROPERTY AND EQUIPMENT, NET                                                           49,113                   40,142

COST IN EXCESS OF NET ASSETS
  ACQUIRED, NET                                                                       24,863                   25,381

OTHER ASSETS                                                                           3,309                    6,498
                                                                          -------------------      -------------------

TOTAL ASSETS                                                                        $844,779                 $747,111
                                                                          ===================      ===================

          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

                                                                              June 30,              December 31,
                                                                                1998                    1997
                                                                         --------------------    --------------------

<S>                                                                       <C>                     <C>    
CURRENT LIABILITIES:
Accounts payable                                                                   $523,284             $437,211
Accrued liabilities                                                                  43,164               38,963
Long-term debt - current                                                              1,788                1,762
                                                                         --------------------    --------------------
     Total current liabilities                                                      568,236              477,936

Long-term debt                                                                      130,797              131,667
                                                                         --------------------    --------------------
TOTAL LIABILITIES                                                                   699,033              609,603

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; 80,225,368 and 80,078,500
  shares outstanding for 1998 and 1997, respectively                                    802                  801
Additional paid-in capital                                                          282,285              281,701
Accumulated deficit                                                                (128,261)            (137,005)
Cumulative translation adjustment                                                    (9,080)              (7,989)
                                                                         --------------------    --------------------
Total stockholders' equity                                                          145,746              137,508
                                                                         --------------------    --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $844,779             $747,111
                                                                         ====================    ====================



          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                       Six Months Ended
                                                            June 30,                                June 30,
                                                    1998                1997               1998              1997
                                              -----------------  -----------------   ----------------    ----------------
<S>                                           <C>                <C>                 <C>                 <C>    

NET SALES                                     $1,096,439         $895,754            $2,198,109          $2,008,855

COST OF SALES                                  1,034,736          840,101             2,074,655           1,888,224
                                              -----------------  -----------------   ----------------    ----------------

GROSS PROFIT                                      61,703           55,653               123,454             120,631

SELLING, GENERAL &
     ADMINISTRATIVE EXPENSES                      47,959           43,299                97,052              94,820
                                              -----------------  -----------------   ----------------    ----------------
OPERATING INCOME                                  13,744           12,354                26,402              25,811

INTEREST EXPENSE                                   3,890            7,760                 7,673              16,383

OTHER EXPENSE                                      4,531            2,389                 9,621               5,919
                                              -----------------  -----------------   ----------------    ----------------
INCOME BEFORE INCOME TAXES                         5,323            2,205                 9,108               3,509

INCOME TAX PROVISION                                 215              159                   364                 333
                                              -----------------  -----------------   ----------------    ----------------
NET INCOME                                        $5,108           $2,046                $8,744              $3,176
                                              =================  =================   =================   =================
NET INCOME PER SHARE (BASIC AND DILUTED)           $0.06            $0.07                 $0.11               $0.11

WEIGHTED AVERAGE NUMBER OF  SHARES 
     BASIC                                        80,216           30,078                80,184              30,078
     DILUTED                                      81,531           30,078                80,557              30,078    
                                              =================  =================   =================   =================

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



<PAGE>
<TABLE>
<CAPTION>



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

                                                                                   Six Months Ended June 30,
                                                                                 1998                    1997
                                                                           ------------------     --------------------
<S>                                                                        <C>                    <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                           $8,744                 $3,176
Adjustments to reconcile net loss to net
   cash provided by operating activities:
   Depreciation and amortization                                                      5,118                  5,971
   Provision for doubtful accounts                                                    5,104                  4,692
Loss (Gain) on Sale of Property and Equipment                                             3                 (1,530)
Changes in assets and liabilities:
   Accounts receivable                                                              (37,821)               (24,715)
   Inventories                                                                       31,739                 45,826
   Prepaid expenses and other assets                                                 (8,642)                (9,050)
   Accounts payable                                                                  86,073                (13,381)
   Accrued liabilities                                                                4,220                  1,646
                                                                           ------------------     --------------------
Net cash provided by operating activities                                            94,538                 12,635
                                                                                                   
                                                                           ------------------     --------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                  (13,827)               (2,831)
Proceeds from sale of property                                                                              5,020
                                                                           ------------------     --------------------
Net cash (used for) provided by investing activities                                (13,827)                2,189
                                                                           ------------------     --------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit                                            27,200                 484,708
Repayments under revolving line of credit                                           (27,200)               (488,319)
Net repayments under other bank facilitie                                              (844)                   (777)
Repayment of senior notes                                                                                    (2,407)
Proceeds from sale of accounts receivable                                            52,489
Repayment of subordinated debt                                                                               (4,400)
Proceeds from issuance of Common Stock                                                  585
                                                                           ------------------     --------------------
Net cash provided by (used for) financing activities                                 52,230                 (11,195)
                                                                           ------------------     --------------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                (940)                    256
                                                                           ------------------     --------------------

NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                                                 132,001                   3,885

CASH AND CASH EQUIVALENTS, BEGINNING OF
   PERIOD                                                                            36,447                  44,678
                                                                           ------------------     --------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $168,448                 $48,563
                                                                           ==================     ====================

            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, networking equipment and software products. Through its main operating
subsidiary,  Merisel Americas,  Inc. ("Merisel Americas"),  and its subsidiaries
the Company  markets  products and  services  throughout  North  America 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/dealers,  and  retailers.  The Company  also  operates the
Merisel  Open  Computing  Alliance  (MOCA(TM)),  which  primarily  supports  Sun
Microsystems' UNIX(R)-based product sales and installations.

The  information  for the three and six months  ended June 30, 1998 and 1997 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 1997 have been reclassified to conform with 1998
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, 1997.

2.  New Accounting Pronouncements

In  June  1997,  the  Financial  Accounting  Standards  Board  issued  Financial
Accounting  Standard No. 131,  "Disclosure  about  Segments of an Enterprise and
Related   Information"  ("SFAS  131"),  which  requires  disclosure  of  certain
information  about  operating  segments,  geographic  areas in which the Company
operates,  major customers, and products and services. The Company will evaluate
the effect  that this new  standard  has on the  Company's  financial  statement
presentation,  and the required  information  will be reflected in the financial
statements for the year ended December 31, 1998.

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  second  quarter is the  13-week  period
ending on the Saturday nearest to June 30. For simplicity of  presentation,  the
Company has described the interim  periods and year-end period as of June 30 and
December 31, respectively.


<PAGE>

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



4.    Loan and Security Agreement

Merisel Americas entered into a Loan and Security Agreement dated as of June 30,
1998 (the "Loan and Security  Agreement") with BankAmerica Business Credit, Inc.
("BA"), acting as agent, which provides for borrowings on a revolving basis. 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,  BA'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.

The Revolving Credit  Agreement and Convertible  Promissory Note (the "BT Note")
entered  into in January 1998 by the Company and Merisel  Americas  with Bankers
Trust Company  expired in accordance  with its terms on July 2, 1998. No amounts
were outstanding under the BT Note on the expiration date.

5.   Dispositions

As of March 28, 1997, the Company completed the sale of substantially all of the
assets of its wholly owned  subsidiary  Merisel FAB, Inc.  ("Merisel  FAB") to a
wholly owned subsidiary of SYNNEX Information Technologies, Inc. ("Synnex"). The
sale price,  computed  based upon the February 21, 1997 balance sheet of Merisel
FAB, was $31,992,000 consisting of the assumption by the buyer of $11,992,000 of
trade payables and accrued liabilities and a $20,000,000 extended payable due to
Vanstar  Corporation.  As part of the sale, the Company agreed to extend rebates
to Synnex on future purchases at a defined rate per dollar of purchases,  not to
exceed $2,000,000 in aggregate rebates.


<PAGE>


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



Following are  summarized pro forma  operating  results for the six months ended
June 30, 1997 assuming that the Company had sold the assets of Merisel FAB as of
January 1, 1997 and summarized actual operating results for the six months ended
June 30, 1998.


                                  (in thousands except per share data)
                                      Actual              Pro Forma
                                 Six Months Ended      Six Months Ended
                                     June 30,              June 30,
                                       1998                  1997
                                ----------------     --------------------     
     
        Net Sales                 $  2,198,109         $   1,806,677
        Gross Profit                   123,454               112,952
        Net Income (loss)                8,744                 1,022
                                ================     ====================
        Net Income (loss) per
        share                     $       0.11         $        0.03
                                ================     ====================
        Weighted Average
        Shares                  
        Outstanding
        (Diluted)                       80,557                30,078
                                ================     ====================       
  

6.  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)                (in thousands)
                                                            Three Months Ended             Six Months Ended
                                                                 June 30,                      June 30,
                                                           1998           1997           1998            1997
                                                           ----           ----           ----            ----
<S>                                                    <C>            <C>            <C>            <C>    
Net Income                                             $   5,108      $   2,046      $   8,744      $   3,176
Other comprehensive income, net of tax:
   Foreign currency translation adjustments               (1,209)           505         (1,091)           191
                                                       -----------    ----------     ----------     -------------
Comprehensive income                                   $   3,899      $   2,551      $   7,653      $   3,367
                                                       ===========    ==========     ==========     =============
</TABLE>


<PAGE>

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



7.  Earnings Per Share

The Company  calculates  earnings per share ("EPS") in accordance with 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. In the both the three-month period and six-month period
ended  June 30,  1997,  there is no  material  difference  between  the  primary
earnings per share  reported  previously by the Company,  and basic earnings per
share or diluted earnings per share methods adopted currently.

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)                (in thousands)
                                                            Three-months Ended             Six Months Ended
                                                                 June 30,                      June 30,
Weighted average shares outstanding                        1998           1997           1998            1997
-----------------------------------                        ----           ----           ----            ----
<S>                                                        <C>            <C>            <C>             <C>    
Basic                                                      80,216        30,078          80,184        30,078
Assumed exercises of stock options                          1,315                           373
                                                       ------------   ------------   -------------  ------------
Diluted                                                    81,531        30,078          80,557        30,078
                                                       ============   ============   =============  ============

</TABLE>


8. Supplemental Disclosure of Cash Flow Information

Cash paid  (received) in  the three-month  periods and  six-month  periods ended
June 30 for interest and income taxes was as follows:


<TABLE>
<CAPTION>

                                                  (in thousands)                  (in thousands)
                                                Three Months Ended               Six Months Ended
                                                     June 30,                        June 30,
                                                1998            1997           1998           1997
                                                ----            ----           ----           ----
          <S>                                <C>            <C>              <C>          <C>    
         Interest                             $ 8,104        $  5,007         $ 7,336      $ 14,245
         Income taxes                         $   133        $ (2,808)        $  (116)     $ (3,401)
</TABLE>

Effective  March 28, 1997, the Company sold  substantially  all of the assets of
Merisel  FAB.  The  recorded  sale  price  was  $31,992,000,  consisting  of the
assumption  of  $11,992,000  of trade  payables  and accrued  liabilities  and a
$20,000,000 extended payable due to a third party, in full consideration for the
assets (See Note 5 "Dispositions").


<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, networking equipment and software products. Through its main operating
subsidiary,  Merisel Americas,  Inc. ("Merisel Americas"),  and its subsidiaries
the Company  markets  products and  services  throughout  North  America 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/dealers,  and  retailers.  The Company  also  operates the
Merisel  Open  Computing  Alliance  (MOCA(TM)),  which  primarily  supports  Sun
Microsystems' UNIX(R)-based product sales and installations.

As of March 28, 1997, the Company completed the sale of substantially all of the
assets of its wholly owned  subsidiary  Merisel FAB, Inc.  ("Merisel  FAB") to a
wholly owned subsidiary of SYNNEX Information Technologies, Inc. ("Synnex"). The
Company's  operations  are now  focused  exclusively  on  distribution  in North
America.  The Company's  sales were $3.85 billion for 1997,  excluding  revenues
from  operations  sold in the  first  quarter  of 1997.  As the  North  American
Business  (defined below)  represents the ongoing  business of the Company,  the
following  discussion  and  analysis  will compare the  components  of operating
income for the six months  ended June 30,  1998 and June 30,  1997 for the North
American Business only. As used in this discussion and analysis, the term "North
American  Business" refers to Merisel's United States and Canadian  distribution
businesses,  and  the  term  "Former  Operations"  refers  to  the  Merisel  FAB
operations disposed of by Merisel in the first quarter of 1997.

On  September  19,  1997,  the  Company  and  Merisel  Americas  entered  into a
definitive Stock and Note Purchase  Agreement with Phoenix  Acquisition  Company
II, L.L.C.  ("Phoenix"),  a Delaware limited liability company whose sole member
is Stonington  Capital  Appreciation  1994 Fund, L.P.  Pursuant to the Stock and
Note Purchase  Agreement,  on September 19, 1997 Phoenix  acquired a Convertible
Note for  $137,100,000  (the  "Convertible  Note")  and  4,901,316  shares  (the
"Initial   Shares")  of  the  Company's   common  stock  ("Common   Stock")  for
$14,900,000. The Convertible Note was an unsecured obligation of the Company and
Merisel Americas and provided that, upon the satisfaction of certain conditions,
including   obtaining   stockholder   approval,   the  Convertible   Note  would
automatically  convert into 45,098,684  shares of Common Stock (the  "Conversion
Shares").  The Company used  substantially  all of the  $152,000,000 in proceeds
from the  issuance  of the  Initial  Shares  and the  Convertible  Note to repay
indebtedness  of its  operating  subsidiaries  (the  "Operating  Company  Debt")
consisting of $80,697,000

<PAGE>



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



principal amount  outstanding  under a revolving credit  agreement,  $53,798,000
principal amount of its 11.5% senior notes, and $13,200,000  principal amount of
subordinated  notes.  On  October  10,  1997,  Phoenix  exercised  its option to
convert,  without any additional  payment,  $3,296,286  principal  amount of the
Convertible Note into 1,084,305 shares of Common Stock, representing the maximum
amount that could be  converted  prior to  obtaining  stockholder  approval.  On
December 19, 1997,  following  receipt of  stockholder  approval,  the remaining
portion  of  the  Convertible   Note  was  converted  into  Common  Stock.   The
$152,000,000  in  proceeds  from the  issuance  of the  Initial  Shares  and the
Convertible  Note was  partially  offset by  professional  fees and other direct
costs related thereto totaling approximately $12,099,000, which were recorded as
a reduction to additional paid in capital at the time of conversion.  As of June
30, 1998,  Phoenix owned  50,000,000  shares of Common Stock,  or  approximately
62.4% of the outstanding Common Stock.

RESULTS OF OPERATIONS

Three  Months Ended June 30, 1998 as Compared to the Three Months Ended June 30,
1997.

Net sales  increased 22.4% from $ 895,754,000 in the quarter ended June 30, 1997
to $1,096,000 in the quarter ended June 30, 1998. The increase was the result of
a 23.6% increase in net sales for the U.S. and a 17.0%  increase in Canada.  All
of the Company's U.S. customer bases contributed to the growth rate in the U.S.,
with particularly strong growth in MOCA,  commercial  reseller/dealer and retail
sales.  The growth rate in Canada in terms of Canadian  dollar  sales was 23.0%,
but the decline in the value of the Canadian  dollar hampered the growth rate in
terms of U.S. dollars, as was also the case in the first quarter of 1998.

Hardware and accessories  accounted for 78% of net sales and software  accounted
for 22% of net sales in the second  quarter of 1998,  which is the same  product
mix for the Company's net sales in the second quarter of 1997.


<PAGE>


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



Gross  profit  increased  10.9% or  $6,049,000  from  $55,654,000  in the second
quarter of 1997 to  $61,703,000  in the same period in 1998.  Gross  profit as a
percentage of sales,  or gross margin,  decreased from 6.21% in 1997 to 5.63% in
1998.  Without  the effect of  favorable  resolutions  of vendor  reconciliation
issues in the amount of  $3,290,000,  however,  the gross  margin for the second
quarter of 1997 would have been 5.85%.  Gross  margins in the United  States and
Canada  were 5.61% and  5.71%,  respectively,  for the  second  quarter of 1998,
compared to 6.20% and 6.25%, respectively, for the second quarter of 1997, after
the  effect of  favorable  resolutions  of  vendor  reconciliation  issues.  The
decrease in margins as a percentage  of sales is partially the result of changes
in  customer  and product  mix,  and is also  significantly  affected by intense
competitive  pricing pressures.  The Company has committed  resources to reverse
the  deterioration of margins by focusing  attention on more profitable  product
lines and improved  controls over margin management  related  activities such as
sales  execution,  processes,  vendor rebate  programs and  purchasing
discounts.  However,  the Company believes that it will continue to face intense
price competition.

Selling,  general and administrative expenses for the Company increased by 10.8%
from  $43,299,000  in the second  quarter of 1997 to  $47,960,000  in the second
quarter of 1998.  However,  selling,  general and  administrative  expenses as a
percentage of sales  decreased from 4.83% of sales in 1997 to 4.37% for the same
period in 1998.  This decrease is primarily  attributable  to efforts to control
operating  expenses while the Company  experienced  sales growth of 22.4% during
the period.

As a result of the above  items,  operating  income for the Company  improved by
$1,389,000  from  $12,354,000  for the second quarter of 1997 to $13,743,000 for
the second quarter of 1998.

Six Months  Ended June 30,  1998 as  Compared  to the Six Months  Ended June 30,
1997.

The following table sets forth the unaudited results of operations for the North
American  Business and for the Former  Operations  for the six months ended June
30, 1998 and June 30, 1997.

<TABLE>
<CAPTION>

                                    Six Months Ended                                   Six Months Ended
                                     June 30, 1998                                       June 30, 1997
                               (In Thousands) (Unaudited)                         (In Thousands) (Unaudited)
                    -----------------------------------------------        --------------------------------------------             
                                                 
                        North                                                North
                       American           Former        Consolidated        American         Former        Consolidated
                       Business         Operations         Total            Business       Operations         Total
                    --------------     ------------    -------------     -------------    ------------     -------------
<S>                 <C>                <C>             <C>                 <C>            <C>              <C>
Net Sales           $  2,198,109                       $  2,198,109      $  1,806,677     $  202,178       $ 2,008,855
Cost of Sales          2,074,655                          2,074,655         1,693,724        194,500         1,888,224
                    --------------     ------------    -------------     -------------    ------------     -------------
Gross Profit             123,454                            123,454           112,953          7,678           120,631

SG&A Expenses             97,052                             97,052            88,620          6,200            94,820
                    --------------     ------------    -------------     -------------    ------------     -------------
Operating           $     26,402                       $     26,402       $    24,333     $    1,478        $   25,811
Income              =============      ===========     ============      ============     ===========      ============
                                                                                      
</TABLE>


<PAGE>
                                                                                
      


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



For the six  months  ended  June 30,  1998,  net sales  for the  North  American
Business  increased by 21.7% from  $1,806,677,000  for the six months ended June
30, 1997 to $2,198,109,000  for the six months ended June 30, 1998. The increase
resulted from a 24.0% increase in net sales for the U.S. and a 12.7% increase in
Canada.  The growth rate in Canada in terms of Canadian  dollars was 18.1%.  The
growth rate reflects  improved year over year performance in the second quarter,
due to the same  factors  summarized  in the  discussion  of sales for the three
months ended June 30, 1998 and 1997.

In the North American  Business,  hardware and accessories  accounted for 78% of
net sales and software accounted for 22% of net sales in the first six months of
1998, as compared to 77% and 23% for the same categories,  respectively,  in the
first six months of 1997.

Gross profit for the North American Business  increased 9.3% or $10,501,000 from
$112,953,000  for the first six months of 1997 to $123,454,000 for the first six
months  of 1998.  Gross  profit  as a  percentage  of  sales,  or gross  margin,
decreased  from 6.25% for the 1997 period to 5.62% for the 1998 period.  Without
the  effect of  favorable  resolutions  of vendor  reconciliation  issues in the
amount of $3,290,000,  however,  the gross margin for the 1997 period would have
been 6.07%.  The decrease is attributable to the same factors  summarized in the
discussion  of gross  profit for the three  months ended June 30, 1998 and 1997.
Gross   margins  in  the  United   States  and  Canada  were  5.58%  and  5.75%,
respectively,  for  the  first  half of  1998,  compared  to  6.30%  and  6.07%,
respectively, for the first half of 1997. The decrease in margin is attributable
to the same factors  summarized in the  discussion of gross profit for the three
months ended June 30, 1998 and 1997.

Selling,  general and  administrative  expenses for the North American  Business
increased  by 9.5% from  $88,621,000  in the six months  ended June 30,  1997 to
$97,052,000 in the six months ended June 30, 1998. However, selling, general and
administrative  expenses as a percentage of sales  decreased from 4.91% of sales
in 1997 to 4.42%  for the  same  period  in 1998.  This  decrease  is  primarily
attributable  to  efforts  to  control  operating  expenses  while  the  Company
experienced sales growth of 21.7% during the period.

As a result of the above items, operating income for the North American Business
improved  by  $2,070,000  from  $24,332,000  for the first six months of 1997 to
$26,402,000 for the first six months of 1998.



<PAGE>


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



Interest Expense; Other Expense; and Income Tax Provision

Interest  expense  decreased 50.0% from $7,760,000 in the quarter ended June 30,
1997 to $3,890,000 in the quarter ended June 30, 1998.  For the six months ended
June 30, 1998,  interest expense for the Company,  including Former  Operations,
decreased  53.2% from  $16,383,000  in the 1997 period to $7,673,000 in the 1998
period.  The  decrease  in  interest  expense  is  primarily  attributable  to a
reduction of the Company's debt by approximately $150,984,000, from $283,569,000
on June 30,  1997 to  $132,585,000  on June 30,  1998,  largely  from the use of
proceeds  from the issuance of the Initial  Shares and the  Convertible  Note to
repay substantially all of the Operating Company Debt.

Other  expenses for the Company,  including  Former  Operations,  increased from
$2,389,000  and  $5,919,000  for the three and six months  ended June 30,  1997,
respectively,  to  $4,531,000  and  $9,622,000  for the  same  period  in  1998,
respectively.  The increase for the quarter is due primarily to the recording of
a gain on the sale of property  held in North  Carolina  for  $1,530,000  in the
second  quarter of 1997,  which  reduced  other  expenses for that  period.  The
increase is also attributable to a $323,000 increase in foreign currency losses.
For the six-month  period,  in addition to the effect of the gain on the sale of
the property and the increase in foreign currency losses,  the increase was also
attributable to a $1,315,000  increase in asset  securitization  fees, which are
included  in other  expense,  and the effect of other  income in the 1997 period
related to the Former Operations.  The increased  securitization fees are due to
increased sales of accounts  receivables 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
$250,441,000 for the six months ended June 30, 1997 to $272,868,000 for the same
period in 1998.

The income tax provision  increased from an expense of $159,000 and $333,000 for
the three and six months  ended June 30,  1997,  respectively,  to an expense of
$215,000 and $363,000 for the same periods in 1998. 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 in the
current period.

Consolidated Net Income

On  a  consolidated  basis,  net  income  for  the  Company,   including  Former
Operations,  increased  from  $2,046,000  and  $3,176,000  for the three and six
months  ended  June 30,  1997,  respectively,  to net income of  $5,108,000  and
$8,744,000 for the three and six months ended June 30, 1998,  respectively,  due
to the factors  described  above.  Net income per share  decreased from $.07 per
share for the three  months  ended June 30, 1997 to net income of $.06 per share
for the three months ended June 30, 1998. Net income per share remained the same
at $.11 per share for the six months ended June 30, 1998 and June 30, 1997.

<PAGE>

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



SYSTEMS AND PROCESSES; YEAR 2000 ISSUES

Merisel has made significant investments in new, advanced computer and warehouse
management systems for its North American operations to support sales growth and
improve  service  levels.  All of Merisel's nine North  American  warehouses now
utilize Merisel's  Information and Logistical  Efficiency  System  ("MILES"),  a
computerized  warehouse  management  system,  which uses infrared bar coding and
advanced computer hardware and software to maintain high picking,  receiving and
shipping accuracy rates.


Merisel  is in the  process  of  converting  its  U.S.  operations  to  the  SAP
client/server operating system. The Company plans to convert its U.S. operations
to the SAP system  during  the first half of 1999.  The  Company  converted  its
Canadian  operations from a mainframe to the SAP client/server  operating system
in August 1995. SAP is an enterprise-wide system which integrates all functional
areas of the business including order entry, inventory management and finance in
a  real-time  environment.  The  new  system  is  designed  to  provide  greater
transaction functionality,  automated controls,  flexibility, and custom pricing
applications.

The  Company  believes  that  implementation  of the SAP  operating  system will
address  its major  "year 2000  issues",  which  arise in cases  where  computer
systems or any equipment with computer chips use two-digit fields that recognize
dates  using the  assumption  that the first two digits are "19".  On January 1,
2000, any clock or date recording  mechanism  including date sensitive  software
that uses only two digits to represent  the year may recognize a date using "00"
as the year  1900  rather  than the year  2000.  This  could  result in a system
failure or  miscalculations  causing  disruption of operations,  including among
other things a temporary  inability to process  transactions,  send  invoices or
engage in similar activities.

The  Company  is  currently  engaged  in a review of its  computer  systems  and
applications,  including packaged software used by the Company, not addressed by
the SAP operating system. The Company expects to make any modifications required
to  resolve  year  2000  issues  in a timely  manner  and to have  the  majority
completed  by early  1999,  leaving  adequate  time to assess  and  correct  any
significant  issues that may materialize.  The Company is seeking  assurances of
year 2000  compliance  from its  suppliers  of software  and other  products and
services used internally that might raise year 2000 issues.  The Company is also
expecting to initiate formal  communications with selected vendors and customers
to  determine  the extent to which the  Company  is  vulnerable  to those  third
parties' failure to remediate their own year 2000 issues.

The Company can give no guarantee  that the systems of other  companies on which
the Company's  systems rely will be converted on time or that failure to convert
by another  company or a  conversion  that is  incompatible  with the  Company's
systems would not have a material adverse effect on the Company.  The Company is
taking  steps to reduce  the  likelihood  that such  failures  could  affect the
Company's systems through any electronic communications.


<PAGE>

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


The Company does not expect that the review and  modifications  described  above
(excluding the cost of implementing  the SAP operating  system in the U.S.)
will require  material  expenditures.  If the Company is unable to  successfully
implement the SAP  operating  system  sufficiently  in advance of the year 2000,
however,  additional  expenditures could be required and such expenditures could
be  substantial.  In  addition,  if the  modifications  required  to address the
Company's year 2000 issues are not made, or are not timely, the year 2000 issues
could  have a  material  impact on the  operations  and  financial  results  and
condition of the Company. See "Liquidity and Capital Expenditures" below.

The design and  implementation  of these new systems are  complex  projects  and
involve certain risks. The U.S. SAP implementation in particular, because of its
scope and complexity,  involves risks that could have a material  adverse impact
on operations and financial results. 


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;  and (iii) 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
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,  in the U.S.  and Canada,  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.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Activity

Net cash provided by operating  activities during the six months ended June 30, 
1998,  was  $94,538,000. The primary  sources of cash from operating activities 
include an increase in accounts payable of $86,073,000.The primary uses of cash

<PAGE>

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

 
during the period  include a $37,821,000  increase in accounts  receivable.
The increase in accounts  payable reflects the growth in the overall business as
well as the Company's  efforts to increase vendor  financing  through  increased
credit  limits and more  favorable  payment  terms.  The  increase  in  accounts
receivable is related primarily to increased sales volume.

Net cash used in investing activities was $13,827,000  consisting primarily
of leasehold improvements and equipment expenditures. The equipment expenditures
were primarily incurred in connection with the implementation of SAP in the U.S.
Capital  expenditures were also made for the purchase of computer  equipment for
internal use, for  improvements  of existing  facilities and other  expenditures
related to the U.S. SAP implementation.

Net cash  provided by financing  activities  was  $52,230,000  and was comprised
primarily of proceeds from the sale of accounts  receivable  under the Company's
asset securitization facilities.

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. The maximum  commitment under the facility was increased from
$300,000,000  to  $500,000,000  pursuant to an amendment  entered into effective
July 30,  1998.  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. The agreement, as amended,
expires 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.  The facility  expires December
12, 2000, but is extendible by notice from the securitization  company,  subject
to the Company's approval.

Under these  securitization  facilities,  the receivables are sold at face value
with payment of a portion of the purchase price being  deferred.  As of June 30,
1998, the total amount outstanding under these facilities was $363,048,000. Fees
incurred in connection  with the sale of accounts  receivable  for the three and
six months  ended June 30,  1998 were  $4,023,000  and  $8,665,000  compared  to
$3,776,000 and  $7,350,000  incurred for the three and six months ended June 30,
1997 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 June 30, 1998, 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 impose  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 June 30, 1998, the Company had promissory notes outstanding with an aggregate
balance  of  $7,585,000.  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 date as of June 30,
1998(the "Loan and Security  Agreement")  with  BankAmerica  Business  Credit,  
Inc.("BA"), acting as agent, which provides for borrowings on a revolving basis.
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,  BA'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.

The Revolving Credit  Agreement and Convertible  Promissory Note (the "BT Note")
entered  into in January 1998 by the Company and Merisel  Americas  with Bankers
Trust Company  expired on July 2, 1998 in accordance  with its terms. No amounts
were outstanding under the BT Note on its expiration date.


<PAGE>



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



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  1998,  primarily  consisting  of  costs  associated  with
implementing  the SAP operating system (which includes all external direct costs
of materials and  services,  purchased  hardware and  software,  and payroll and
payroll-related   costs  of   employees   directly   associated   with  the  SAP
implementation),   developing  the  Company's  channel  assembly   capabilities,
enhancing  electronic  services,  upgrading  warehouse systems and other Company
facilities,  and building the sales  infrastructure.  However,  aggregate  costs
could  exceed  these  estimates,  depending  on the  timing and scope of the SAP
implementation.  The Company  intends to fund its capital  expenditures  through
internally  generated  cash  and  long-term  financing.  The  Company's  capital
expenditures  for 1998 will result in a  significant  increase  in  depreciation
expense in future periods.

At June 30, 1998, the Company had cash and cash equivalents of $168,448,000. The
Company does not intend to maintain this level of cash balances.  In the opinion
of management,  anticipated cash from operations in 1998, together with proceeds
under the Company's  securitization  and revolving  credit  facilities and trade
credit from vendors,  will be sufficient to meet the Company's  requirements for
the next 12 months. 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 which 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 recent months,  however,  certain computer systems  manufacturers
that are among the Company's  largest  vendors have  announced  changes in price
protection  and other  terms and  conditions  which 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
minimize any adverse impact from these  changes,  although there is no assurance
that such efforts will be successful.

<PAGE>


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



The Company  purchases  foreign exchange  contracts to minimize foreign exchange
transaction gains and losses and intends to continue such practice.

The Company  offers  credit terms to  qualifying  customers  and also sells on a
prepay,  early pay,  credit card and  cash-on-delivery  basis.  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,  hardware and software leasing, and escrow programs.  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,  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 include large United States-based
distributors  and  aggregators  such  as  Gates/Arrow,   Inacom,  Ingram  Micro,
MicroAge,  SYNNEX Information Technologies,  Inc. and Tech Data Corporation,  as
well as regional distributors and franchisers.

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 reseller customers.



<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In June 1994, Merisel and certain of its officers and/or directors were named in
putative  securities class actions filed in the United States District Court for
the  Central  District  of  California,  consolidated  as  In re  Merisel,  Inc.
Securities Litigation. As of July 6, 1998, the parties agreed on a memorandum of
understanding  ("MOU")  which sets forth the basic terms of a settlement of this
action.  The  terms  of  the  MOU  will  be  incorporated  in a  Stipulation  of
Settlement,  which is subject  to  approval  by the  District  Court.  Under the
settlement, Merisel will not be required to make any material payment.

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% Note").  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. See "Management's  Discussion
and Analysis of Financial  Condition  and Results of  Operations."  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. The Company intends
to  vigorously  prosecute  its  claim in the  Delaware  Action.  There can be no
assurance,  however, that the Company will ultimately be successful with respect
to its claims.

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
asserts  a claim  for  unjust  enrichment  against  Dwight  A.  Steffensen,  the
Company's Chief Executive  Officer.  The Noteholder Suit seeks damages in excess
of $100 million from the Company. The Company's alleged breaches include,  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 Court
denied  both  motions.  The Company and Mr.  Steffensen  believe  that they have
strong defenses to each of the claims  asserted and intend to defend  themselves
vigorously.  There can be no assurance,  however,  as to the ultimate outcome of
these claims.

<PAGE>

In  addition,   on  September  19,  1997,  the  Company   received  notice  from
representatives  of  the  lenders  under  the  agreements  relating  to  certain
operating company debt that, in connection with the Company's  repayment of such
debt,  such  lenders  believe that they are owed  approximately  $2.7 million in
fees.  On October 31,  1997,  the Company  received a further  letter  demanding
payment of such fees.  The Company has entered into a settlement  agreement with
substantially  all of such lenders which will not have a material adverse effect
on the Company or its financial condition.

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 plaintiffs  allege that certain  executive  officers of Media
Vision Technology,  Inc. ("Media Vision") committed fraud and breached fiduciary
duties owed to Media Vision  through,  interalia,  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
plaintiffs further allege that the Company aided, abetted, conspired and/or made
possible such acts and omissions of the Media Vision executives.  The plaintiffs
seek 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. The motion is set for hearing
on September 1, 1998. The Company  intends to defend itself  vigorously  against
this claim.

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

         10.1     Offer Of Employment Letter to Kristin M. Rogers dated  April  
                  30, 1998
         10.2     Change of Control Agreement dated as of May 11, 1998 between 
                  Kristin M. Rogers and Merisel Americas, Inc.
         10.3     Offer Of Employment Letter to Ronald S. Smith dated June 2, 
                  1998.
         10.4     Waiver and Release Agreement between Robert J. McInerney and 
                  Merisel, Inc. dated as of April 30, 1998.
         10.5     Amendments to Securitization Agreements,  dated as of July 31,
                  1998, among Merisel Americas,  Inc.,  Merisel Capital Funding,
                  Inc.,  Redwood  Receivables  Corporation and General  Electric
                  Capital Corporation.
         27       Financial Data Schedule for the quarter ended June 30, 1998.


         (b) The  following  Reports on Form 8-K were filed  during the  quarter
             ended June 30, 1998.

                  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:   August 17, 1998

                                             Merisel, Inc.



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