----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

| x | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|--------------------------------------------------------------------------------------------------------------------------------------|

| ¨ | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

**MERISEL,      INC.**

**(Exact      name of registrant as specified in its charter)**

| **Delaware**                                                   | **01-17156**                            | **95-4172359**                                        |
|----------------------------------------------------------------|-----------------------------------------|-------------------------------------------------------|
| (State                or other jurisdiction of incorporation)  | (Commission                File Number) | (I.                R. S. Employer identification No.) |
|                                                           |                                    |                                                  |
| **127                W. 30****th****Street, 5****th****Floor** |                                    | **10001**                                             |
| **New                York, NY**                                |                                    | (Zip                Code)                             |
| (Address                of principal executive offices)        |                                    |                                                  |

----

**MERISEL,      INC. AND SUBSIDIARIES**

**Three      Months Ended March 31, 2005**

**TABLE      OF CONTENTS**

|                                                    |                                                                                                                                                                                                                   |
|---------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PART                  I FINANCIAL INFORMATION**  |
| Item                  1.                           | Financial                  Statements                                                                                                                                                                             |
|                                                    | Consolidated                  Balance Sheets as of March 31, 2004                  (Unaudited) and December 31, 2004 (Audited)                                                                                    |
|                                                    | Unaudited                  Consolidated Statements of Operations for the                  Three Months Ended March 31, 2005 and 2004                                                                              |
|                                                    | Unaudited                  Consolidated Statements of Cash Flows for the                  Three Months Ended March 31, 2005 and 2004                                                                              |
|                                                    | Predecessor                  Combined Balance Sheet as of December                  31, 2004 (Audited)                                                                                                            |
|                                                    | Unaudited                  Predecessor Combined Statements of                  Operations for the Two Months Ended February 28, 2005 and the Three                  Months                  Ended March 31, 2004  |
|                                                    | Unaudited                  Predecessor Combined Statements of Cash                  Flows for the Two Months Ended February 28, 2005 and the Three                  Months                  Ended March 31, 2004  |
|                                                    | Notes                  to Unaudited Consolidated Financial                  Statements                                                                                                                            |
| Item                  2.                           | Management’s                  Discussion and Analysis of Financial Condition                  and Results of Operations                                                                                     |
| Item                  3.                           | Quantitative                  and Qualitative Disclosures About Market                  Risk                                                                                                                      |
| Item                  4.                           | Controls                  and Procedures                                                                                                                                                                          |
| **PART                  II OTHER INFORMATION**     |
| Item                  1.                           | Legal                  Proceedings                                                                                                                                                                                |
| Item                  6.                           | Exhibits                                                                                                                                                                                                          |
|                                                    | SIGNATURES                                                                                                                                                                                                        |

----

**SPECIAL      NOTE REGARDING FORWARD-LOOKING INFORMATION**

| ·   | the                implementation of the Company’s business strategies and                goals; |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | the                integration of past and future                acquisitions; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | the                Company’s dependence on its senior management and key personnel and its                ability to attract and retain additional qualified personnel; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                Company’s ability to expand its business, including through any future                acquisitions; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                deterioration in economic conditions                generally; |
|--------------------|---------------------------------------------------------------------------------|

| ·   | competitive                pricing and other competitive pressures in the graphic image arts                industry; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in technology creating obsolescence; |
|--------------------|-------------------------------------------------------------|

| ·   | the                Company’s involvement as a defendant in litigation or incurrence of                judgments, fines or legal costs; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                loss of significant customers; and |
|--------------------|-------------------------------------------------------|

| ·   | other                risks detailed in “Business - Risk Factors” in the Company’s most recent                Annual Report on form 10-K on file with the                SEC. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table          of Contents

**PART      1. FINANCIAL INFORMATION**

**Item      1.**
**Financial      Statements**

|                                                         |   | **March                31, 2005** |   | **December                31,****2004** |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|-----------------------------------------|--------|
| Current                assets:                               |   | (Unaudited)                       |   | (Audited)                               |   |
| Cash                and cash equivalents                     |   | $                                 | 12,336 |                                    | $      | 46,861 |   |
| Accounts                receivable, net of allowance of $684 |   |                              | 11,846 |                                    |   | - |   |
| Inventories                                                  |   |                              | 1,179  |                                    |   | - |   |
| Restricted                cash - deferred compensation       |   |                              | -      |                                    |   | 759 |   |
| Current                assets of discontinued operations     |   |                              | 3,338  |                                    |   | - |   |
| Prepaid                expenses and other current assets     |   |                              | 1,861  |                                    |   | 256 |   |
| Total                current assets                          |   |                              | 30,560 |                                    |   | 47,876 |   |
|                                                         |   |                              |   |                                    |   |   |   |
| Property                and equipment, net                   |   |                              | 3,783  |                                    |   | - |   |
|                                                         |   |                              |   |                                    |   |   |   |
| Restricted                cash - security deposits           |   |                              | 2,319  |                                    |   | - |   |
| Other                assets                                  |   |                              | 534    |                                    |   | 74 |   |
| Intangible                assets, net                        |   |                              | 5,827  |                                    |   |   |   |
| Goodwill                                                     |   |                              | 24,234 |                                    |   | - |   |
|                                                         |   |                              |   |                                    |   |   |   |
| Total                assets                                  |   | $                                 | 67,257 |                                    | $      | 47,950 |   |
|                                                         |   |                              |   |                                    |   |   |   |

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Table          of Contents

MERISEL,

|                                                                                                                                                                                                       |   | **March                31, 2005** |     | **December                31, 2004** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|--------------------------------------|--------|
|                                                                                                                                                                                                       |   | (Unaudited)                       |     | (Audited)                            |   |
| Current                liabilities:                                                                                                                                                                        |   |                              |     |                                 |   |   |   |
| Accounts                payable                                                                                                                                                                            |   | $                                 | 5,131    |                                 | $      | 10 |   |
| Accrued                liabilities                                                                                                                                                                         |   |                              | 5,510    |                                 |   | 4,099 |   |
| Capital                lease obligations, current maturities                                                                                                                                               |   |                              | 581      |                                 |   | - |   |
| Installment                notes, current maturities                                                                                                                                                       |   |                              | 567      |                                 |   | - |   |
| Customer                deposits                                                                                                                                                                           |   |                              | 2        |                                 |   | - |   |
| Total                current liabilities                                                                                                                                                                   |   |                              | 11,791   |                                 |   | 4,109 |   |
|                                                                                                                                                                                                       |   |                              |     |                                 |   |   |   |
| Note                payable, bank                                                                                                                                                                          |   |                              | 6,330    |                                 |   | - |   |
| Capital                lease obligations, less current maturities                                                                                                                                          |   |                              | 694      |                                 |   | - |   |
| Installment                notes, less current maturities                                                                                                                                                  |   |                              | 1,833    |                                 |   | - |   |
| Other                liabilities                                                                                                                                                                           |   |                              | 43       |                                 |   | - |   |
| Deferred                occupancy costs                                                                                                                                                                    |   |                              | 16       |                                 |   | - |   |
|                                                                                                                                                                                                       |   |                              |     |                                 |   |   |   |
| Stockholders’                equity:                                                                                                                                                                 |   |                              |     |                                 |   |   |   |
| Convertible                preferred stock, $.01 par value, authorized1,000,000                shares; 150,000 shares issued and outstanding                                                               |   |                              | 21,951   |                                 |   | 21,521 |   |
| Common                stock, $.01 par value, authorized 30,000,000shares;                8,033,875 issued and 7,623,895 outstanding at March 31, 2005 and                December                31, 2004. |   |                              | 80       |                                 |   | 80 |   |
| Additional                paid-in capital                                                                                                                                                                  |   |                              | 276,946  |                                 |   | 277,375 |   |
| Accumulated                deficit                                                                                                                                                                         |   |                              | (251,000 | )                                    |   | (253,592 | ) |
| Unamortized                deferred compensation                                                                                                                                                           |   |                              | (576     | )                                    |   | (692 | ) |
| Treasury                stock at cost, 409,980 shares repurchased as of March 31, 2005 and                December 31, 2004                                                                                |   |                              | (851     | )                                    |   | (851 | ) |
| Total                stockholders’ equity                                                                                                                                                            |   |                              | 46,550   |                                 |   | 43,841 |   |
|                                                                                                                                                                                                       |   |                              |     |                                 |   |   |   |
| Total                liabilities and stockholders’ equity                                                                                                                                            |   | $                                 | 67,257   |                                 | $      | 47,950 |   |

----

Table          of Contents

MERISEL,

|                                                                                                    |   | **Three                Months Ended****March                31,** |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                                    |   | **2005**                                                          |   | **2004** |   |
|                                                                                                    |   | (Unuadited)                                                       |   | (Audited) |   |
|                                                                                                    |   |                                                              |   |   |   |
| Net                sales                                                                                |   | $                                                                 | 5,823  |   |   | - |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Cost                of sales                                                                            |   |                                                              | 2,706  |   |   | - |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Gross                profit                                                                             |   |                                                              | 3,117  |   |   | - |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Selling,                general & administrative expenses                                           |   |                                                              | 2,791  |   |   | 511 |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Operating                income (loss)                                                                  |   |                                                              | 326    |   |   | (511 | ) |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Interest                income, net                                                                     |   |                                                              | 123    |   |   | 111 |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Income                (loss) from continuing operations before provision for income                tax  |   |                                                              | 449    |   |   | (400 | ) |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Income                tax provision                                                                     |   |                                                              | 9      |   |   | - |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Net                income (loss) from continuing operations                                             |   |                                                              | 440    |   |   | (400 | ) |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Income                from discontinued operations                                                      |   |                                                              | -      |   |   | 1,466 |   |
| Gain                on sale of discontinued operations                                                  |   |                                                              | 2,152  |   |   | - |   |
| Net                income                                                                               |   |                                                              | 2,592  |   |   | 1,066 |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Preferred                stock dividends                                                                |   |                                                              | 431    |   |   | 398 |   |
| Net                income available to common stockholders                                              |   | $                                                                 | 2,161  |   | $ | 668 |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Net                (loss) income per share (basic and diluted):                                         |   |                                                              |   |   |   |   |   |
| Income                (loss) from continuing operations available to common                stockholders |   | $                                                                 | 0.00   |   | $ | (0                .10 | ) |
| Income                from discontinued operations                                                      |   |                                                              | 0.00   |   |   | 0.19 |   |
| Gain                on sale of discontinued operations                                                  |   |                                                              | 0.28   |   |   | 0.00 |   |
| Net                income available to common stockholders                                              |   | $                                                                 | 0.28   |   | $ | 0.09 |   |
|                                                                                                    |   |                                                              |   |   |   |   |   |
| Weighted                average number of shares                                                        |   |                                                              |   |   |   |   |   |
| Basic                                                                                                   |   |                                                              | 7,624  |   |   | 7,616 |   |
| Diluted                                                                                                 |   |                                                              | 7,703  |   |   | 7,616 |   |

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Table          of Contents

MERISEL

|                                                                                                               |   | **Three                Months Ended March 31,** |    |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                               |   | **2005**                                        |    | **2004** |   |
| CONTINUING                OPERATIONS                                                                               |   | (Unaudited)                                     |    | (Unudited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                               |   |                                            |    |   |   |
| Net                income                                                                                          |   | $                                               | 2,592   |   | $ | 1,066 |   |
| Less:                income from discontinued operations, net                                                      |   |                                            | 2,152   |   |   | 1,466 |   |
| Net                income (loss) from continuing operations                                                        |   |                                            | 440     |   |   | (400 | ) |
| Adjustments                to reconcile net income (loss) to net cash used in operating                activities: |   |                                            |    |   |   |   |   |
| Non-cash                deferred compensation                                                                      |   |                                            | 116     |   |   | 10 |   |
| Deferred                compensation payment                                                                       |   |                                            | (759    | ) |   | - |   |
| Deferred                occupancy costs                                                                            |   |                                            | 16      |   |   |   |   |
| Depreciation                and amortization                                                                       |   |                                            | 136     |   |   |   |   |
| Changes                in operating assets and liabilities:                                                        |   |                                            |    |   |   |   |   |
| Accounts                receivable                                                                                 |   |                                            | 332     |   |   | - |   |
| Inventories                                                                                                        |   |                                            | 227     |   |   | - |   |
| Prepaids                and other current assets                                                                   |   |                                            | (967    | ) |   | 1 |   |
| Restricted                cash - security deposits                                                                 |   |                                            | (10     | ) |   | - |   |
| Accounts                payable                                                                                    |   |                                            | 1,152   |   |   | (1 | ) |
| Accrued                liabilities                                                                                 |   |                                            | (1,366  | ) |   | (1,188 | ) |
| Net                cash used in operating activities                                                               |   |                                            | (683    | ) |   | (1,578 | ) |
|                                                                                                               |   |                                            |    |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                               |   |                                            |    |   |   |   |   |
| Acquisitions,                net of cash acquired of $424                                                          |   |                                            | (33,811 | ) |   | - |   |
| Capital                expenditures                                                                                |   |                                            | (101    | ) |   | - |   |
| Net                cash used in investing activities                                                               |   |                                            | (33,912 | ) |   | - |   |
|                                                                                                               |   |                                            |    |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                               |   |                                            |    |   |   |   |   |
| Capital                lease payments                                                                              |   |                                            | (60     | ) |   | - |   |
| Bank                debt assumed                                                                                   |   |                                            | 130     |   |   | - |   |
| Net                cash provided by financing activities                                                           |   |                                            | 70      |   |   | - |   |
|                                                                                                               |   |                                            |    |   |   |   |   |
| NET                DECREASE IN CASH AND CASH EQUIVALENTS FROM CONTINUING                OPERATIONS                 |   |                                            | (34,015 | ) |   | (1,578 | ) |
|                                                                                                               |   |                                            |    |   |   |   |   |
| DISCONTINUED                OPERATIONS                                                                             |   |                                            |    |   |   |   |   |
| Cash                provided by (used in) discontinued operations                                                  |   |                                            | -       |   |   | 5,613 |   |
| Cash                provided by investing activities                                                               |   |                                            | -       |   |   | 11 |   |
| NET                CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS                                              |   |                                            | -       |   |   | 5,614 |   |
|                                                                                                               |   |                                            |    |   |   |   |   |
| NET                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                |   |                                            | (34,525 | ) |   | 4,036 |   |
|                                                                                                               |   |                                            |    |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                      |   |                                            | 46,861  |   |   | 44,948 |   |
| CASH                AND CASH EQUIVALENTS, END OF PERIOD                                                            |   | $                                               | 12,336  |   | $ | 48,984 |   |

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Table          of Contents

|                                                        |   | **(in                thousands)** |     |
|-------------------------------------------------------------|--------|-----------------------------------|----------|
| Cash                paid during the period for:             |   |                              | **2005** |   |   | **2004** |   |
| Income                taxes                                 |   | $                                 | -        |   | $ | - |   |
| Non-cash                investing and financing activities: |   |                              |     |   |   |   |   |
| Unrealized                gain on securities                |   |                              | -        |   |   | 10 |   |
| Preferred                dividends accumulated              |   |                              | 431      |   |   | 398 |   |

| Current                Assets                                                |   |   |   |
|------------------------------------------------------------------------------|--------|--------|--------|
|                                                                         |   |   |   |
| Cash                                                                         |   |   | 424    |   |
| Accounts                receivable                                           |   |   | 12,178 |   |
| Inventories                                                                  |   |   | 1,406  |   |
| Prepaid                expenses and other current assets                     |   |   | 299    |   |
| Total                current assets                                          |   |   | 14,307 |   |
|                                                                         |   |   |   |   |
| Non-current                Assets                                            |   |   |   |   |
| Property,                plant and equipment                                 |   |   | 3,745  |   |
| Security                deposits and other assets                            |   |   | 2,349  |   |
| Goodwill                                                                     |   |   | 24,235 |   |
| Other                intangible assets                                       |   |   | 5,900  |   |
|                                                                         |   |   |   |   |
|                                                                         |   |   |   |   |
| Current                Liabilities                                           |   |   |   |   |
| Accounts                payable                                              |   |   | 3,970  |   |
| Accrued                expense                                               |   |   | 2,396  |   |
| Long-term                debt and capital lease obligations, current portion |   |   | 1,189  |   |
| Total                current liabilities                                     |   |   | 7,555  |   |
|                                                                         |   |   |   |   |
| Non-current                Liabilities                                       |   |   |   |   |
| Long-term                debt and capital lease obligations                  |   |   | 8,747  |   |
|                                                                         |   |   |   |   |
| Net                assets acquired                                           |   |   | 34,234 |   |

----

Table          of Contents

COLOR      EDGE, INC

|                                                              |   | **December                31,****2004** |   |
|-------------------------------------------------------------------|--------|-----------------------------------------|--------|
| Current                assets:                                    |   | (Audited)                               |   |
|                                                              |   |                                    |   |
| Cash                and cash equivalents                          |   | $                                       | 2,053  |   |
| Accounts                receivable, net of allowances of $518     |   |                                    | 10,166 |   |
| Inventories                                                       |   |                                    | 1,106  |   |
| Due                from related company                           |   |                                    | 133    |   |
| Deferred                income taxes                              |   |                                    | 610    |   |
| Stockholders’                loans                          |   |                                    | 4,393  |   |
| Other                current assets                               |   |                                    | 68     |   |
| Total                current assets                               |   |                                    | 18,529 |   |
|                                                              |   |                                    |   |   |
| Property                and equipment, net                        |   |                                    | 3,161  |   |
|                                                              |   |                                    |   |   |
| Deferred                income taxes                              |   |                                    | 4,243  |   |
| Restricted                cash - security deposit                 |   |                                    | 1,683  |   |
| Security                deposits                                  |   |                                    | 210    |   |
| Loan                origination fees                              |   |                                    | 95     |   |
| Trademarks                                                        |   |                                    | 3      |   |
|                                                              |   |                                    |   |   |
| Total                assets                                       |   | $                                       | 27,923 |   |
|                                                              |   |                                    |   |   |
| Current                liabilities:                               |   |                                    |   |   |
| Accounts                payable                                   |   | $                                       | 3,474  |   |
| Accrued                liabilities                                |   |                                    | 3,680  |   |
| Capital                lease obligations, current maturities      |   |                                    | 658    |   |
| Installment                notes - bank, current maturities       |   |                                    | 400    |   |
| Customer                deposits                                  |   |                                    | 67     |   |
| Income                taxes payable                               |   |                                    | 803    |   |
| Total                current liabilities                          |   |                                    | 9,082  |   |
|                                                              |   |                                    |   |   |
| Notes                payable, bank                                |   |                                    | 5,500  |   |
| Capital                lease obligations, less current maturities |   |                                    | 860    |   |
| Installment                notes - bank, less current maturities  |   |                                    | 1,300  |   |
| Deferred                occupancy costs                           |   |                                    | 1,688  |   |
|                                                              |   |                                    |   |   |
| Stockholders’                equity:                        |   |                                    |   |   |
| Common                stock                                       |   |                                    | 1      |   |
| Additional                paid-in capital                         |   |                                    | 1,449  |   |
| Retained                earnings                                  |   |                                    | 8,044  |   |
| Total                stockholders’ equity                   |   |                                    | 9,494  |   |
|                                                              |   |                                    |   |   |
| Total                liabilities and stockholders’ equity   |   | $                                       | 27,923 |   |

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Table          of Contents

COLOR      EDGE

|                                                          |   | **Two****Months                Ended February 28, 2005** |   | **Three                Months Ended March 31, 2004** |   |
|---------------------------------------------------------------|--------|----------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                          |   |
|                                                          |   | (Unaudited)                                              |   | (Unaudited)                                          |   |
|                                                          |   |                                                     |   |                                                 |   |
| Net                sales                                      |   | $                                                        | 8,532  |                                                 | $      | 13,280 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Cost                of sales                                  |   |                                                     | 5,011  |                                                 |   | 6,425 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Gross                profit                                   |   |                                                     | 3,521  |                                                 |   | 6,855 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Selling,                general & administrative expenses |   |                                                     | 4,615  |                                                 |   | 5,405 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Operating                income (loss)                        |   |                                                     | (1,094 | )                                                    |   | 1,450 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Interest                expense, net                          |   |                                                     | 73     |                                                 |   | 117 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Income                (loss) before tax provision             |   |                                                     | (1,167 | )                                                    |   | 1,333 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Income                tax provision                           |   |                                                     | -      |                                                 |   | 614 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
| Net                income (loss)                              |   | $                                                        | (1,167 | )                                                    | $      | 719 |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |
|                                                          |   |                                                     |   |                                                 |   |   |   |

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Table          of Contents

COLOR      EDGE

|                                                                                                               |   | **2                months ended February 28, 2005** |   | **3                months ended March 31,****2004** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                               |   | (Unaudited)                                         |   | (Unaudited)                                         |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                               |   |                                                |   |                                                |   |
| Net                income (loss) from operations                                                                   |   |                                                | (1,167 | )                                                   |   | 719 |   |
| Adjustments                to reconcile net income (loss) to net cash used in operating                activities: |   |                                                |   |                                                |   |   |   |
| Deferred                occupancy costs                                                                            |   |                                                | -      |                                                |   | 49 |   |
| Deferred                income taxes                                                                               |   |                                                | 533    |                                                |   | 812 |   |
| Depreciation                and amortization                                                                       |   |                                                | 284    |                                                |   | 320 |   |
| Changes                in operating assets and liabilities:                                                        |   |                                                |   |                                                |   |   |   |
| Accounts                receivable                                                                                 |   |                                                | (1,792 | )                                                   |   | (2,056 | ) |
| Inventories                                                                                                        |   |                                                | 189    |                                                |   | 340 |   |
| Prepaids                and other current assets                                                                   |   |                                                | (121   | )                                                   |   | (2 | ) |
| Restricted                cash                                                                                     |   |                                                | 7      |                                                |   | - |   |
| Security                deposits                                                                                   |   |                                                | 53     |                                                |   | (11 | ) |
| Accounts                payable                                                                                    |   |                                                | (122   | )                                                   |   | (1,736 | ) |
| Accrued                liabilities                                                                                 |   |                                                | 210    |                                                |   | (329 | ) |
| Income                taxes payable                                                                                |   |                                                | (262   | )                                                   |   | 1,539 |   |
| Net                cash used in operating activities                                                               |   |                                                | (2,118 | )                                                   |   | (355 | ) |
|                                                                                                               |   |                                                |   |                                                |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                               |   |                                                |   |                                                |   |   |   |
| Capital                expenditures                                                                                |   |                                                | (9     | )                                                   |   | (328 | ) |
| Net                cash used in investing activities                                                               |   |                                                | (9     | )                                                   |   | (328 | ) |
|                                                                                                               |   |                                                |   |                                                |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                               |   |                                                |   |                                                |   |   |   |
| Capital                lease payments                                                                              |   |                                                | (119   | )                                                   |   | (261 | ) |
| Loan                origination fees                                                                               |   |                                                | 95     |                                                |   | (111 | ) |
| Loan                from stockholder                                                                               |   |                                                | 231    |                                                |   | (267 | ) |
| Bank                debt assumed, net of repayments                                                                |   |                                                | 400    |                                                |   | 1,547 |   |
| Net                cash provided by financing activities                                                           |   |                                                | 607    |                                                |   | 908 |   |
|                                                                                                               |   |                                                |   |                                                |   |   |   |
| NET                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                |   |                                                | (1,590 | )                                                   |   | 225 |   |
|                                                                                                               |   |                                                |   |                                                |   |   |   |
| CASH                AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                      |   |                                                | 2,053  |                                                |   | 756 |   |
| CASH                AND CASH EQUIVALENTS, END OF PERIOD                                                            |   | $                                                   | 463    |                                                | $      | 981 |   |

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MERISEL

| 1. ** ** | General |
|--------------------|---------|

| 2.   | Basis                of Presentation |
|----------------|--------------------------------------|

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| 3.   | Discontinued                Operations |
|----------------|----------------------------------------|

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|                                                   |   | **(In                thousands)**                       |   |
|--------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                   |   | **For                the Three Months Ended March 31,** |   |
|                                                   |   | **2005**                                                |   | **2004** |   |
| Net                sales                               |   | $                                                       | -      |   | $ | 14,968 |   |
| Gross                profit                            |   |                                                    | -      |   |   | 1,861 |   |
| Operating                expense                       |   |                                                    | -      |   |   | 769 |   |
| Restructuring                charge                    |   |                                                    | -      |   |   | (356 | ) |
| Operating                income                        |   |                                                    | -      |   |   | 1,448 |   |
| Interest                and other income               |   |                                                    | -      |   |   | 16 |   |
| Income                from discontinued operations     |   | $                                                       | -      |   | $ | 1,466 |   |
|                                                   |   |                                                    |   |   |   |   |   |
| Gain                on sale of discontinued operations |   | $                                                       | 2,152  |   | $ | - |   |

| 4.   | Use                of Estimates |
|----------------|---------------------------------|

| 5.   | Inventories |
|----------------|-------------|

|                                    |   |                              |   | **December                31, 2004** |   |
|-----------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
|                                    |   | **March                31, 2005** |   | **Merisel**                          |   | **Predecessor** |   |
| Raw                materials            |   | $                                 | 963    |                                 |   | - |   | $ | 862 |   |
| Work                in process          |   |                              | 219    |                                 |   | - |   |   | 244 |   |
| Reserve                for obsolescence |   |                              | (3     | )                                    |   | - |   |   | - |   |
| Total                inventory, net     |   | $                                 | 1,179  |                                 |   | - |   | $ | 1,106 |   |

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| 6.   | Stock-Based                Compensation |
|----------------|-----------------------------------------|

| In                  thousands, except per share amounts                                                                                                            |   | **Three                  months ended March 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                                                                                               |   | **2005**                                          |   | **2004** |   | **2004** |   |
|                                                                                                                                                               |   |                                              |   | **Merisel** |   | **Predecessor** |   |
| Net                  income available to common stockholders - As Reported                                                                                         |   | $                                                 | 2,161  |   | $ | 668 |   | $ | 719 |   |
| Deduct:                  Total stock-based employee compensation expense determined under                  fair                  value based method for all awards |   |                                              | 92     |   |   | 1 |   |   | - |   |
| Net                  income - Pro Forma                                                                                                                            |   | $                                                 | 2,069  |   | $ | 667 |   | $ | 719 |   |
|                                                                                                                                                               |   |                                              |   |   |   |   |   |   |   |   |
| Earnings                  Per Share (Basic & Diluted):                                                                                                         |   |                                              |   |   |   |   |   |   |   |   |
| As                  Reported                                                                                                                                       |   | $                                                 | 0.28   |   | $ | 0.09 |   |   | N/A |   |
| Pro                  Forma                                                                                                                                         |   | $                                                 | 0.27   |   | $ | 0.09 |   |   | N/A |   |

| 7.   | Accrued                Liabilities |
|----------------|------------------------------------|

|                                                       |   |                                    |   | **March                31, 2005** |   | **December                31, 2004** |   |
|------------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
|                                                       |   | **Accrued                liabilities:** |   |                              |   | **Merisel**                          |   | **Predecessor** |   |
| Lease                commitments and other accruals        |   |                                    |   |                              | $      | 2,255                                |   | $ | 1,259 |   | $ | 1,073 |   |
| Compensation                and other benefit accruals     |   |                                    |   |                              |   | 2,898                                |   |   | 552 |   |   | 2,523 |   |
| State                and local sales taxes and other taxes |   |                                    |   |                              |   | 357                                  |   |   | 1,529 |   |   | 84 |   |
| Deferred                compensation                       |   |                                    |   |                              |   | -                                    |   |   | 759 |   |   | - |   |
| Total                accrued liabilities                   |   |                                    |   |                              | $      | 5,510                                |   | $ | 4,099 |   | $ | 3,680 |   |

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| 8.   | Comprehensive                Income |
|----------------|-------------------------------------|

| **(In                thousands)**                                                                           |   | **Three                Months Ended March 31,** |               |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------------|
|                                                                                                        |   | **2005**                                        |               | **2004** |   | **2004** |   |
|                                                                                                        |   |                                            |               | **Merisel** |   | **Predecessor** |   |
| Net                income                                                                                   |   | $                                               | 2,592              |   | $ | 1,066 |   | $ | 719 |   |
| Other                comprehensive income - unrealized gain on available for sale                securities |   |                                            | -                - |   |   | 10 |   |   | - |   |
| Comprehensive                income                                                                         |   | $                                               | 2,592              |   | $ | 1,076 |   | $ | 719 |   |

| 9.   | Earnings                Per Share and Stockholders Equity |
|----------------|-----------------------------------------------------------|

| 10.   | Related                Party Transactions |
|-----------------|-------------------------------------------|

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| 11.   | Other                Assets |
|-----------------|-----------------------------|

| 12.   | Commitments                and Contingencies |
|-----------------|----------------------------------------------|

| 13.   | Acquisitions |
|-----------------|--------------|

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|   **(in                thousands)**                  |   |
|----------------------------------------------------------------|--------|
| Trade                accounts receivable                       |   | $ | 12,178 |   |
| Inventory                                                      |   |   | 1,406 |   |
| Other                current assets                            |   |   | 299 |   |
| Fixed                assets                                    |   |   | 3,745 |   |
| Restricted                cash                                 |   |   | 2,349 |   |
| Intangible                assets                               |   |   | 5,900 |   |
| Goodwill                                                       |   |   | 24,235 |   |
| Accounts                payable                                |   |   | (3,970 | ) |
| Accrued                liabilities                             |   |   | (2,397 | ) |
| Long                term debt and capital lease obligations    |   |   | (9,935 | ) |
| Total                purchase price, net of $424 cash received |   | $ | 33,810 |   |

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| Pro                Forma, unaudited, in thousands, except per share amounts |   | **Three                Months Ended March 31,** |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                        |   | **2005**                                        |   | **2004** |   |
|                                                                        |   |                                            |   |   |   |
| Total                revenue                                                |   | $                                               | 16,205 |   | $ | 16,178 |   |
| Net                income (loss) from continuing operations                 |   |                                            | (495   | ) |   | 888 |   |
| Basic                and Diluted earnings (loss) per share                  |   |                                            | ($0.06 | ) | $ | 0.12 |   |

| 14.   | Debt |
|-----------------|------|

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| 15.   | Intangibles |
|-----------------|-------------|

**:**

|                                              |   |  **March                31, 2005**  |   |
|---------------------------------------------------|--------|-----------------------------------------------|--------|
|  Customer                Relationships  |   | $                                             | 2,750  |   |
|  Non-compete                agreements  |   |                                          | 3,001  |   |
|  Software                licenses       |   |                                          | 73     |   |
|  Domain                names            |   |                                          | 3      |   |
|  Total                                  |   | $                                             | 5,827  |   |

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**Item      2. Management’s Discussion and Analysis of Financial      Condition and Results of Operations**

*The      following discussion of the Company’s consolidated historical results of      operations and financial condition should be read in conjunction with its      unaudited consolidated financial statements and the notes thereto included      elsewhere in this report.*

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| **(in                thousands)**                |   | **Payment                due by period** |   |
|--------------------------------------------------|--------|------------------------------------------|--------|
|  **Contractual                Obligations** |   |  **Total**                          |   | **Less                than 1 Year** |   |  **1-3                Years** |   |  **3-5                Years** |   | **More                than 5 Years** |   |
| Long                Term Debt Obligations        |   | $                                        | 8,730  |   | $ | 567 |   | $ | 8,163 |   | $ | - |   | $ | - |   |
| Capital                Lease Obligations         |   |                                     | 1,338  |   |   | 581 |   |   | 757 |   |   | - |   |   | - |   |
| Operating                Lease Obligations       |   |                                     | 25,722 |   |   | 2,785 |   |   | 8,777 |   |   | 6,269 |   |   | 7,891 |   |
| Contingent                Payment Obligations    |   |                                     | 9,815  |   |   | 3,272 |   |   | 6,544 |   |   | - |   |   | - |   |
| Total                                            |   | $                                        | 45,605 |   | $ | 7,204 |   | $ | 24,241 |   | $ | 6,269 |   | $ | 7,891 |   |

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**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4. Controls and Procedures**

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**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Item      6. Exhibits **

| (a)   | Exhibits |
|-----------------|----------|

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SIGNATURE

|         |                                                             |                                                  |
|--------------|------------------------------------------------------------------|-------------------------------------------------------|
|         | **MERISEL,                INC.**                                 |
|    |                                                        |                                             |
|         | By:                                                    | /s/ Donald                R.                Uzzi |
|         | Donald R. Uzzi                                                   |
|         | Title:                 Chairman and Chief Executive Officer |

|         |                                               |                                 |
|--------------|----------------------------------------------------|--------------------------------------|
|         |                                               |
|    |                                          |                            |
|         | By:                                      | /s/Allyson                Vanderford |
|         | Allyson Vanderford                                 |
|         | Title: Chief                Financial Officer |

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**EXHIBIT      INDEX**

| Exhibit                  Number | Exhibit                  Description                                                                                                                                                                                                                                                                                                                    |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                             | Restated                  Certificate of Incorporation of Merisel, Inc., filed as an exhibit                  to Form                  S-1 Registration Statement of Softsel Computer Products, Inc.,                  No.                  33-23700, and incorporated herein by reference                                                              |
| 3.2                             | Amendment                  to Certificate of Incorporation of Merisel, Inc., dated August                  22, 1990,                  filed as exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for                  the quarter ended September 30, 1990, and incorporated herein by                  reference.                       |
| 3.3                             | Amendment                  to Certificate of Incorporation of Merisel, Inc., dated December                  19, 1997,                  filed as Annex I to the Company’s Schedule 14A, dated October 6, 1996, and                  incorporated herein by reference.                                                                             |
| 3.4                             | Certificate                  of Amendment to the Restated Certificate of Incorporation of Merisel                  Inc.,                  dated February 13, 2001, filed as exhibit 3.4 to the Company’s Annual                  Report on Form 10-K for the year ended December 31, 2000, and incorporated                  herein by reference. |
| 3.5                             | Certificate                  of Amendment to the Restated Certificate of Incorporation of Merisel                  Inc.,                  dated October 27, 2004 filed as exhibit 3.5 to the Company's Quarterly                  Report on Form 10-Q for the period ended September 30, 2004, and                  incorporated herein by reference    |
| 3.6                             | Bylaws,                  as amended, of Merisel, Inc., filed as exhibit 3.1 to the Company’s                  Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,                  and                  incorporated herein by reference.                                                                                          |
| 31.1                            | Certification                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                                                                                                                   |
| 31.2                            | Certification                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                                                                                                                   |
| 32                              | Certification                  of Chief Executive Officer and Chief Financial Officer pursuant                  to 18                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the                  Sarbanes-Oxley Act of                  2002.                                                                                     |