----

**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, 2006**

**TABLE      OF CONTENTS**

| **PART                I FINANCIAL INFORMATION**  |
|-------------------------------------------------------|
| Item                1.                           | Financial                Statements  |
|                                                  | Consolidated                Balance Sheets as of March 31, 2006                (Unaudited) and December 31, 2005 (Audited)  |
|                                                  | Unaudited                Consolidated Statements of Operations for the                Three Months Ended March 31, 2006 and 2005 and Audited Predecessor                Combined Statements of Operations for the Two Months Ended February                28,                2005  |
|                                                  | Unaudited                Consolidated Statements of Cash Flows for the                Three Months Ended March 31, 2006 and 2005 and Audited Predecessor                Combined Statements of Cash Flows for the Two Months Ended February                28,                2005  |
|                                                  | 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  |

----

Table          of Contents

**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.** **FinancialStatements**

|                                                                                                 |   | **March                31, 2006** |   | **December                31,****2005** |   |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|-----------------------------------------|--------|
| Current                assets:                                                                       |   | (Unaudited)                       |   | (Audited)                               |   |
| Cash                and cash equivalents                                                             |   | $                                 | 11,071 |                                    | $      | 12,548 |   |
| Accounts                receivable, net of allowance of $1,136 and $948,                respectively |   |                              | 16,545 |                                    |   | 17,416 |   |
| Inventories                                                                                          |   |                              | 1,678  |                                    |   | 1,615 |   |
| Prepaid                expenses and other current assets                                             |   |                              | 1,723  |                                    |   | 711 |   |
| Total                current assets                                                                  |   |                              | 31,017 |                                    |   | 32,290 |   |
|                                                                                                 |   |                              |   |                                    |   |   |   |
| Property                and equipment, net                                                           |   |                              | 7,000  |                                    |   | 6,982 |   |
|                                                                                                 |   |                              |   |                                    |   |   |   |
| Restricted                cash                                                                       |   |                              | 6,791  |                                    |   | 6,775 |   |
| Other                assets                                                                          |   |                              | 175    |                                    |   | 183 |   |
| Intangible                assets, net                                                                |   |                              | 6,740  |                                    |   | 7,034 |   |
| Trademarks                                                                                           |   |                              | 10,452 |                                    |   | 10,452 |   |
| Goodwill                                                                                             |   |                              | 13,124 |                                    |   | 12,733 |   |
| Non-current                assets of discontinued operations                                         |   |                              | 914    |                                    |   | 914 |   |
|                                                                                                 |   |                              |   |                                    |   |   |   |
| Total                assets                                                                          |   | $                                 | 76,213 |                                    | $      | 77,363 |   |
|                                                                                                 |   |                              |   |                                    |   |   |   |

----

Table          of Contents

MERISEL,

|                                                                                                                                         |   | **March                31, 2006** |     | **December                31, 2005** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|--------------------------------------|--------|
|                                                                                                                                         |   | (Unaudited)                       |     | (Audited)                            |   |
| Current                liabilities:                                                                                                          |   |                              |     |                                 |   |   |   |
| Accounts                payable                                                                                                              |   | $                                 | 3,031    |                                 | $      | 2,166 |   |
| Accrued                liabilities                                                                                                           |   |                              | 5,785    |                                 |   | 6,241 |   |
| Capital                lease obligations, current maturities                                                                                 |   |                              | 499      |                                 |   | 536 |   |
| Installment                notes, current maturities                                                                                         |   |                              | 618      |                                 |   | 719 |   |
| Income                tax payable                                                                                                            |   |                              | -        |                                 |   | 1,808 |   |
| Customer                deposits                                                                                                             |   |                              | 79       |                                 |   | 51 |   |
| Total                current liabilities                                                                                                     |   |                              | 10,012   |                                 |   | 11,521 |   |
|                                                                                                                                         |   |                              |     |                                 |   |   |   |
| Note                payable, bank                                                                                                            |   |                              | 8,630    |                                 |   | 8,630 |   |
| Capital                lease obligations, less current maturities                                                                            |   |                              | 379      |                                 |   | 481 |   |
| Installment                notes, less current maturities                                                                                    |   |                              | 1,232    |                                 |   | 1,376 |   |
| Deferred                occupancy costs                                                                                                      |   |                              | 365      |                                 |   | 317 |   |
|                                                                                                                                         |   |                              |     |                                 |   |   |   |
| Stockholders’                equity:                                                                                                   |   |                              |     |                                 |   |   |   |
| Convertible                preferred stock, $.01 par value, authorized1,000,000                shares; 150,000 shares issued and outstanding |   |                              | 23,761   |                                 |   | 23,295 |   |
| Common                stock, $.01 par value, authorized 30,000,000shares;                8,183,735 issued and 7,773,755 outstanding          |   |                              | 82       |                                 |   | 82 |   |
| Additional                paid-in capital                                                                                                    |   |                              | 275,181  |                                 |   | 275,601 |   |
| Accumulated                deficit                                                                                                           |   |                              | (242,289 | )                                    |   | (242,757 | ) |
| Unamortized                deferred compensation                                                                                             |   |                              | (289     | )                                    |   | (332 | ) |
| Treasury                stock at cost, 409,980 shares repurchased                                                                            |   |                              | (851     | )                                    |   | (851 | ) |
| Total                stockholders’ equity                                                                                              |   |                              | 55,595   |                                 |   | 55,038 |   |
|                                                                                                                                         |   |                              |     |                                 |   |   |   |
| Total                liabilities and stockholders’ equity                                                                              |   | $                                 | 76,213   |                                 | $      | 77,363 |   |

----

Table          of Contents

MERISEL,      INC

|                                                                                                        |   | **Three                Months Ended March 31,** |   | **Two                Months Ended February 28,** |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                                                                        |   | **2006**                                        |   | **2005**                                         |   | **2005** |   |
|                                                                                                        |   | (Unuadited)                                     |   | (Unaudited)                                      |   | (Audited) |   |
|                                                                                                        |   | Successor                                       |   | Successor                                        |   | Predecessor |   |
| Net                sales                                                                                    |   | $                                               | 21,137 |                                             | $      | 5,823 |   | $ | 8,532 |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Cost                of sales                                                                                |   |                                            | 10,374 |                                             |   | 2,706 |   |   | 5,011 |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Gross                profit                                                                                 |   |                                            | 10,763 |                                             |   | 3,117 |   |   | 3,521 |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Selling,                general & administrative expenses                                               |   |                                            | 9,300  |                                             |   | 2,791 |   |   | 4,615 |   |
| Restructuring                charge                                                                         |   |                                            | 724    |                                             |   | - |   |   | - |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Operating                income (loss)                                                                      |   |                                            | 739    |                                             |   | 326 |   |   | (1,094 | ) |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Interest                expense (income), net                                                               |   |                                            | 175    |                                             |   | (123 | ) |   | 73 |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Income                (loss) from continuing operations before provision for income                tax      |   |                                            | 564    |                                             |   | 449 |   |   | (1,167 | ) |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Income                tax provision                                                                         |   |                                            | 96     |                                             |   | 9 |   |   | - |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Income                (loss) from continuing operations                                                     |   |                                            | 468    |                                             |   | 440 |   |   | (1,167 | ) |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Gain                on sale of discontinued operations                                                      |   |                                            | -      |                                             |   | 2,152 |   |   | - |   |
| Net                income (loss)                                                                            |   |                                            | 468    |                                             |   | 2,592 |   |   | (1,167 | ) |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Preferred                stock dividends                                                                    |   |                                            | 466    |                                             |   | 431 |   |   | - |   |
| Net                income (loss) available to common stockholders                                           |   | $                                               | 2      |                                             | $      | 2,161 |   | $ | (1,167 | ) |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Net                income per share (basic and diluted):                                                    |   |                                            |   |                                             |   |   |   |   |   |   |
| Net                income (loss) from continuing operations available to common                stockholders |   | $                                               | 0.00   |                                             | $      | 0.00 |   |   | N/A |   |
| Gain                on sale of discontinued operations                                                      |   |                                            | 0.00   |                                             |   | 0.28 |   |   | N/A |   |
| Net                income (loss) available to common stockholders                                           |   | $                                               | 0.00   |                                             | $      | 0.28 |   |   | N/A |   |
|                                                                                                        |   |                                            |   |                                             |   |   |   |   |   |   |
| Weighted                average number of shares                                                            |   |                                            |   |                                             |   |   |   |   |   |   |
| Basic                                                                                                       |   |                                            | 7,774  |                                             |   | 7,624 |   |   | N/A |   |
| Diluted                                                                                                     |   |                                            | 7,805  |                                             |   | 7,703 |   |   | N/A |   |

----

Table          of Contents

MERISEL,

|                                                                                                               |   |   **Three                Months Ended March 31,** |   | **Two                Months Ended February 28,** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                                                                               |   | **2006**                                                    |   | **2005**                                         |   | **2005** |   |
| CONTINUING                OPERATIONS                                                                               |   | (Unaudited)                                                 |   | (Unaudited)                                      |   | (Audited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                               |   | Successor                                                   |   | Successor                                        |   | Predecessor |   |
| Net                income (loss)                                                                                   |   | $                                                           | 468    |                                             | $      | 2,592 |   | $ | (1,167 | ) |
| Less:                income from discontinued operations, net                                                      |   |                                                        | -      |                                             |   | 2,152 |   |   | - |   |
| Net                income (loss) from continuing operations                                                        |   |                                                        | 468    |                                             |   | 440 |   |   | (1,167 | ) |
| Adjustments                to reconcile net income (loss) to net cash used in operating                activities: |   |                                                        |   |                                             |   |   |   |   |   |   |
| Non-cash                deferred compensation                                                                      |   |                                                        | 43     |                                             |   | 116 |   |   | - |   |
| Stock                based compensation expense                                                                    |   |                                                        | 46     |                                             |   | - |   |   | - |   |
| Deferred                compensation payment                                                                       |   |                                                        | -      |                                             |   | (759 | ) |   | - |   |
| Deferred                occupancy costs                                                                            |   |                                                        | 48     |                                             |   | 16 |   |   | - |   |
| Deferred                income taxes                                                                               |   |                                                        | -      |                                             |   | - |   |   | 533 |   |
| Depreciation                and amortization                                                                       |   |                                                        | 448    |                                             |   | 136 |   |   | 284 |   |
| Changes                in operating assets and liabilities:                                                        |   |                                                        |   |                                             |   |   |   |   |   |   |
| Accounts                receivable                                                                                 |   |                                                        | 871    |                                             |   | 332 |   |   | (1,792 | ) |
| Inventories                                                                                                        |   |                                                        | (63    | )                                                |   | 227 |   |   | 189 |   |
| Prepaids                and other current assets                                                                   |   |                                                        | (1,004 | )                                                |   | (967 | ) |   | 27 |   |
| Restricted                cash - security deposits                                                                 |   |                                                        | (16    | )                                                |   | (10 | ) |   | 7 |   |
| Accounts                payable                                                                                    |   |                                                        | 865    |                                             |   | 1,152 |   |   | (122 | ) |
| Accrued                liabilities                                                                                 |   |                                                        | (2,235 | )                                                |   | (1,366 | ) |   | (52 | ) |
| Net                cash used in operating activities                                                               |   |                                                        | (529   | )                                                |   | (683 | ) |   | (2,093 | ) |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| Payment                of acquisitions                                                                             |   |                                                        | (385   | )                                                |   | (33,811 | ) |   | - |   |
| Increase                in due from stockholder                                                                    |   |                                                        | -      |                                             |   | - |   |   | 231 |   |
| Capital                expenditures                                                                                |   |                                                        | (177   | )                                                |   | (101 | ) |   | (9 | ) |
| Net                cash used in investing activities                                                               |   |                                                        | (562   | )                                                |   | (33,912 | ) |   | 222 |   |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| Capital                lease payments                                                                              |   |                                                        | (141   | )                                                |   | (60 | ) |   | (119 | ) |
| Bank                debt repayments                                                                                |   |                                                        | (245   | )                                                |   | - |   |   | - |   |
| Bank                debt assumed                                                                                   |   |                                                        | -      |                                             |   | 130 |   |   | 400 |   |
| Net                cash provided by financing activities                                                           |   |                                                        | (386   | )                                                |   | 70 |   |   | 281 |   |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| NET                DECREASE IN CASH AND CASH EQUIVALENTS FROM CONTINUING                OPERATIONS                 |   |                                                        | (1,447 | )                                                |   | (34,015 | ) |   | (1,590 | ) |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| DISCONTINUED                OPERATIONS                                                                             |   |                                                        |   |                                             |   |   |   |   |   |   |
| Cash                used in discontinued operations                                                                |   |                                                        | -      |                                             |   | - |   |   | - |   |
| NET                CASH USED IN DISCONTINUED OPERATIONS                                                            |   |                                                        | -      |                                             |   | - |   |   | - |   |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| NET                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                |   |                                                        | (1,477 | )                                                |   | (34,525 | ) |   | (1,590 | ) |
|                                                                                                               |   |                                                        |   |                                             |   |   |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                      |   |                                                        | 12,548 |                                             |   | 46,861 |   |   | 2,053 |   |
| CASH                AND CASH EQUIVALENTS, END OF PERIOD                                                            |   | $                                                           | 11,071 |                                             | $      | 12,336 |   | $ | 463 |   |

----

Table          of Contents

|                                                        |   | **(in                thousands)**                                   |   |
|-------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|                                                        |   |   **For                the Three Months ended March 31,** |   | **For                the Two Months Ended February 28,** |   |
| Cash                paid during the period for:             |   | **2006**                                                            |   | **2005** |   | **2005** |   |
| Income                taxes                                 |   | $                                                                   | 2,350  |   | $ | - |   | $ | - |   |
| Interest                expense                             |   |                                                                | 301    |   |   | - |   |   | 70 |   |
| Non-cash                investing and financing activities: |   |                                                                |   |   |   |   |   |   |   |   |
| Preferred                dividends accumulated              |   |                                                                | 466    |   |   | 431 |   |   | - |   |

----

Table          of Contents

MERISEL,      INC. 

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

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

----

Table            of Contents

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

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

----

Table          of Contents

| 5.   | Restructuring              Charge |
|----------------|-----------------------------------|

|                                     |       | **(In                thousands)**               | ** ** |
|------------------------------------------|------------|-------------------------------------------------|------------|
| ** **                               | ** ** | **December                31, 2005****Balance** | ** ** |  **Net                Charges** | ** ** |  **Payments** | ** ** | **March                31, 2006 Balance** |   |
| Type                of cost:             |       |                                            |       |   |   |   |   |   |   |
| Severance                related         |       | $                                               | -          |   | $ | 616 |   | $ | 3 |   | $ | 613 |   |
| Facility,                lease and other |       |                                            | -          |   |   | 108 |   |   | 38 |   |   | 70 |   |
| Total                                    |       | $                                               | -          |   | $ | 724 |   | $ | 41 |   | $ | 683 |   |

| 6.   | Inventories |
|----------------|-------------|

|                                    |   | **March                31, 2006** |   | **December                31, 2005** |   |
|-----------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
| Raw                materials            |   | $                                 | 1,335  |                                 | $      | 1,260 |   |
| Work                in process          |   |                              | 360    |                                 |   | 372 |   |
| Reserve                for obsolescence |   |                              | (17    | )                                    |   | (17 | ) |
| Total                inventory, net     |   | $                                 | 1,678  |                                 | $      | 1,615 |   |

| 7.   | Stock-Based              Compensation |
|----------------|---------------------------------------|

----

Table          of Contents

|                                                           |     |  Historical                Values  |
|----------------------------------------------------------------|--------------------|----------------------------------------------|
|  Risk-free                interest rate              |               |  3.7%                              |
|  Expected                volatility of common stock  |               |  90.86%                            |
|  Dividend                yield                       |               |  0.0%                              |
|  Expected                option term                 |               |  5                years            |

|                                                                                                                                                         |   | **For                the three months ended March 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
| In                thousands, except per share amounts                                                                                                        |   | **2005**                                                |   |
|                                                                                                                                                         |   |                                                    |   |
| Net                income available to common stockholders - As Reported                                                                                     |   | $                                                       | 2,161  |   |
| Deduct:                Total stock-based employee compensation expense determined under                fair                value based method for all awards |   |                                                    | 92     |   |
| Net                income - Pro Forma                                                                                                                        |   | $                                                       | 2,069  |   |
|                                                                                                                                                         |   |                                                    |   |   |
| Earnings                Per Share (Basic & Diluted):                                                                                                     |   |                                                    |   |   |
| As                Reported                                                                                                                                   |   | $                                                       | 0.28   |   |
| Pro                Forma                                                                                                                                     |   | $                                                       | 0.27   |   |

----

Table          of Contents

|                                                                                                          |   | **2006**               |    |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                          |   |   **Shares** |    | **Weighted****Average****Exer.                Price** |   |
| Outstanding                atDecember                31, 2005                                                 |   |                   | 330,200 |   |   | 9.17 |   |
| Granted                                                                                                       |   |                   | -       |   |   | N/A |   |
| Exercised                                                                                                     |   |                   | -       |   |   | 0.00 |   |
| Canceled                                                                                                      |   |                   |    |   |   |   |   |
| Outstanding                atMarch                31, 2006                                                    |   |                   | 330,200 |   |   | 9.17 |   |
|  Options                exercisable at March 31, 2006                                                    |   |                   | 100,000 |   |   | 5.00 |   |
| Weighted                average fair value at date of grant of options granted during the                year |   |                   | N/A     |   |   |   |   |

----

Table          of Contents

|                               |   | **Options                Outstanding** |    |  **Options                Exercisable** |   |
|------------------------------------|--------|----------------------------------------|---------|----------------------------------------------|--------|
|                               |   |                                   |    | **Weighted**                                 |   |   |   |   |   |   |   |
|                               |   |                                   |    | **Average**                                  |   | **Weighted** |   |   |   | **Weighted** |   |
|                               |   | **Number**                             |    | **Remaining**                                |   | **Average** |   | **Number** |   | **Average** |   |
| **Range                of**        |   | **Outstanding**                        |    | **Life**                                     |   | **Exercise** |   | **Exercisable** |   | **Exercise** |   |
| **Exercise                Prices** |   | **at                3/31/06**          |    | **In                Years**                  |   | **Price** |   | **at                3/31/06** |   | **Price** |   |
|                               |   |                                   |    |                                         |   |   |   |   |   |   |   |
| $18.75                             |   |                                   | 200     |                                         |   | 1 |   | $ | 18.75 |   |   | - |   |   |   |   |
| $17.50                             |   |                                   | 30,000  |                                         |   | 5 |   | $ | 17.50 |   |   | - |   |   |   |   |
| $5.00                to $12.00     |   |                                   | 300,000 |                                         |   | 9 |   | $ | 8.33 |   |   | 100,000 |   | $ | 5.00 |   |
|                               |   |                                   |    |                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| $5.00                to $18.75     |   |                                   | 330,200 |                                         |   |   |   |   |   |   |   | 100,000 |   |   |   |   |

|                                                 |   | **Shares** |    | **Weighted                  Average Grant-Date Fair Value** |   |
|------------------------------------------------------|--------|------------|---------|-------------------------------------------------------------|--------|
| Nonvested                  shares at January 1, 2006 |   |       | 150,000 |                                                        | $      | 2.94 |   |
| Granted                                              |   |       | -       |                                                        |   | - |   |
| Vested                                               |   |       | -       |                                                        |   | - |   |
| Cancelled                                            |   |       | -       |                                                        |   | - |   |
| Nonvested                  shares at March 31, 2006  |   |       | 150,000 |                                                        | $      | 2.94 |   |

----

Table          of Contents

| 8.   | Accrued              Liabilities |
|----------------|----------------------------------|

|                                                         |   | **March                  31, 2006** |   | **December                  31, 2005** |   |
|--------------------------------------------------------------|--------|-------------------------------------|--------|----------------------------------------|--------|
| **Accrued                  liabilities:**                    |   |                                |   |                                   |   |
| Lease                  commitments and other accruals        |   | $                                   | 1,701  |                                   | $      | 1,395 |   |
| Compensation                  and other benefit accruals     |   |                                | 3,127  |                                   |   | 4,680 |   |
| Restructuring                  accrual                       |   |                                | 683    |                                   |   | - |   |
| State                  and local sales taxes and other taxes |   |                                | 274    |                                   |   | 166 |   |
| Total                  accrued liabilities                   |   | $                                   | 5,785  |                                   | $      | 6,241 |   |

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

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

----

Table          of Contents

| 11.   | Commitments              and Contingencies |
|-----------------|--------------------------------------------|

| 12.   | Acquisitions |
|-----------------|--------------|

----

Table          of Contents

| **(in                thousands)**                              |   |
|----------------------------------------------------------------|--------|
| Trade                accounts receivable                       |   | $12,178 |   |
| Inventory                                                      |   |   | 1,406 |   |
| Other                current assets                            |   |   | 299 |   |
| Fixed                assets                                    |   |   | 3,773 |   |
| Restricted                cash                                 |   |   | 2,310 |   |
| Other                assets                                    |   |   | 39 |   |
| Intangible                assets                               |   |   | 5,900 |   |
| Trademark                                                      |   |   | 10,311 |   |
| Goodwill                                                       |   |   | 10,863 |   |
| Accounts                payable                                |   |   | (3,969 | ) |
| Accrued                liabilities                             |   |   | (2,085 | ) |
| Long                term debt and capital lease obligations    |   |   | (9,935 | ) |
| Total                purchase price, net of $424 cash received |   | $ | 31,090 |   |

| (b)   | Effective              August 8, 2005, the Company completed the acquisition of Crush Creative,              Inc. (“Crush”) a California-based privately-held company. Crush is a              visual communication solutions company that provides digital retouching              services, large format digital photographic output, inkjet and digital              printing services, photo-finishing and exhibits and display solutions.              Merisel believes an acquisition of Crush will enhance its operations              by              increasing its West Coast presence and capabilities, diversifying its              current client industries, and enabling it to better serve its existing              clients. Merisel believes certain cost savings and cross-selling synergies              may also be achieved. The operating results of Crush are reflected              in the              Company’s accompanying financial statements since the date of              acquisition. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table          of Contents

| **(in                thousands)**                              |   |
|----------------------------------------------------------------|--------|
| Trade                accounts receivable                       |   | $ | 3,165 |   |
| Inventory                                                      |   |   | 543 |   |
| Other                assets                                    |   |   | 79 |   |
| Fixed                assets                                    |   |   | 2,958 |   |
| Goodwill                                                       |   |   | 2,260 |   |
| Trademark                                                      |   |   | 141 |   |
| Other                intangible assets                         |   |   | 1,987 |   |
| Accounts                payable                                |   |   | (1,009 | ) |
| Accrued                liabilities                             |   |   | (658 | ) |
| Long                term debt and capital lease obligations    |   |   | (2,536 | ) |
| Total                purchase price, net of $454 cash received |   | $ | 6,930 |   |

|   Pro                Forma, unaudited, in thousands, except per share amounts |   | **Three                Months ended March 31, 2005** |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                    |   |                                                 |   |
| Total                revenue                                                            |   | $                                                    | 20,545 |   |
| Net                income from continuing operations                                    |   |                                                 | 945    |   |
| Basic                and Diluted earnings per share                                     |   | $                                                    | 0.12   |   |

----

Table          of Contents

| 13.   | Debt |
|-----------------|------|

----

Table          of Contents

| 14.   | Intangibles |
|-----------------|-------------|

**:**

|                                              |   |  **March                31, 2006**  |   |
|---------------------------------------------------|--------|-----------------------------------------------|--------|
|  Customer                relationships  |   | $                                             | 2,973  |   |
|  Non-compete                agreements  |   |                                          | 2,913  |   |
|  Employee                agreements     |   |                                          | 291    |   |
|  Trade                know how          |   |                                          | 563    |   |
|  Total                                  |   | $                                             | 6,740  |   |

| 15.   | Subsequent              Events |
|-----------------|--------------------------------|

----

Table            of Contents

**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.*

----

Table          of Contents

----

Table          of Contents

| **(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        |   | $                                        | 10,480 |   | $ | 618 |   | $ | 9,862 |   | $ | - |   | $ | - |   |
| Capital                Lease Obligations         |   |                                     | 878    |   |   | 499 |   |   | 379 |   |   | - |   |   | - |   |
| Operating                Lease Obligations       |   |                                     | 26,768 |   |   | 3,574 |   |   | 11,126 |   |   | 7,179 |   |   | 4,889 |   |
| Contingent                Payment Obligations    |   |                                     | 13,282 |   |   | 4,551 |   |   | 8,731 |   |   | - |   |   | - |   |
| Total                                            |   | $                                        | 51,408 |   | $ | 9,242 |   | $ | 30,098 |   | $ | 7,179 |   | $ | 4,889 |   |

----

Table          of Contents

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

**Item      4. Controls and Procedures**

----

Table          of Contents

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Item      6. Exhibits **

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

Exhibit      31.1-Certification of Chief Executive Officer      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit      31.2-Certification of Chief Financial Officer      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

** **

Exhibit      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.

----

Table          of Contents

**SIGNATURE**

|                                 |                                                     |                                              |
|--------------------------------------|----------------------------------------------------------|---------------------------------------------------|
|                                 | **MERISEL,              INC.**                           |
|                            |                                                |                                         |
| Date: May              15, 2006 | By:                                            | /s/ Donald              R.              Uzzi |
|                                 | Donald R. Uzzi                                           |
|                                 | Title:              Chairman and Chief Executive Officer |

|   |                                        |                                                |
|--------|---------------------------------------------|-----------------------------------------------------|
|   | By:                               | /s/              Jon              H. Peterson  |
|   | Jon H. Peterson                             |
|   | Title:              Chief Financial Officer |

----

Table          of Contents

**EXHIBIT      INDEX**

| Exhibit                Number | Exhibit                Description                                                                                                                                                                                                                                                                |
|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                           | Restated                Certificate of Incorporation of Merisel, Inc., as amended, filed                as                Exhibit 3.1 to the Company’s Annual Report on Form 10K for the year ended                December 31, 2005, and incorporated herein by reference                  |
| 3.2                           | Bylaws,                as amended, of Merisel, Inc., s Exhibit 3.2 to the Company’s Annual Report                on Form 10K for the year ended December 31, 2005, , and incorporated                herein by reference.                                                                   |
| 10.1                          | Amendment                No.2 to Asset Purchase Agreement and Amendment to Confidentiality                and                Non-Competition Agreement (MCEI), filed as Exhibit 10.1 to the Company’s                Current Report on Form 8-K filed with the SEC on May 1, 2006.          |
| 10.2                          | Amendment                No.2 to Asset Purchase Agreement and Amendment to Confidentiality                and                Non-Competition Agreement (MCEV), filed as Exhibit 10.2 to the Company's                Current Report on Form 8-K filed with the SEC on May 1,                2006. |
| 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.                                         |