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

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

For the quarterly period ended March 31, 1998.

                                                        OR

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

For the transition period from _______________  to ___________

                          Commission File Number 0-17156

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

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

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


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

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

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

                                                  Yes X No ______

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date:
                                            Number of Shares Outstanding
                  Class                     May 13, 1998
Common Stock, $.01 par value                80,214,568  Shares


<PAGE>





                                  MERISEL, INC.
                                     INDEX

                                                         Page Reference
PART I   FINANCIAL INFORMATION

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

         Consolidated Statements of Operations for the
         Three Months Ended March 31, 1998 and 1997             3

         Consolidated Statements of Cash Flows for the
         Three Months Ended March 31, 1998 and 1997             4

         Notes to Consolidated Financial Statements            5-8

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

PART II  OTHER INFORMATION                                    19-21

         SIGNATURES                                             23


<PAGE>







                                  PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>

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

                                                                              March 31,               December 31,
                                                                                 1998                     1997
                                                                          -------------------      -------------------
<S>                                                                       <C>                       <C>
CURRENT ASSETS:
Cash and cash equivalents                                                           $109,701                  $36,447
Accounts receivable (net of allowances
 of $ 18,128 and $18,549 for 1998 and 1997,  respectively)                           167,502                  162,895
Inventories                                                                          467,546                  462,752
Prepaid expenses and other current assets                                             14,441                   12,352
Deferred income tax benefit                                                              646                      644
                                                                          -------------------      -------------------
   Total current assets                                                              759,836                  675,090

PROPERTY AND EQUIPMENT, NET                                                           42,902                   40,142

COST IN EXCESS OF NET ASSETS
  ACQUIRED, NET                                                                       25,199                   25,381

OTHER ASSETS                                                                           5,589                    6,498
                                                                          -------------------      -------------------

TOTAL ASSETS                                                                        $833,526                 $747,111
                                                                          ===================      ===================

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




<PAGE>
<TABLE>
<CAPTION>


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

                         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                              March 31,             December 31,
                                                                                1998                    1997
                                                                         --------------------    --------------------

<S>                                                                       <C>                     <C>
CURRENT LIABILITIES:
Accounts payable                                                                   $519,360               $437,211
Accrued liabilities                                                                  37,314                 37,268
Income taxes payable                                                                  2,024                  1,695
Long-term debt - current                                                              2,081                  1,762
                                                                          --------------------    -------------------
    Total current liabilities                                                       560,779                477,936

Long-term debt                                                                      130,929                131,667
                                                                          --------------------    -------------------
TOTAL LIABILITIES                                                                   691,708                609,603

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, authorized 1,000,000
   shares; none issued or outstanding
Common stock, $.01 par value, authorized
  150,000,000 shares;  80,212,918 and 80,078,500
  shares outstanding for 1998 and 1997, respectively                                    802                    801
Additional paid-in capital                                                          282,257                281,701
Accumulated deficit                                                                (133,369)              (137,005)
Cumulative translation adjustment                                                    (7,872)                (7,989)
                                                                         --------------------    --------------------
Total stockholders' equity                                                          141,818                137,508
                                                                         --------------------    --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $833,526               $747,111
                                                                         ====================    ====================



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






<PAGE>
<TABLE>
<CAPTION>



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






                                                                Three Months Ended
                                                                     March 31,
                                                             1998                 1997
                                                       ----------------    -----------------
<S>                                                      <C>                  <C>
NET SALES                                                $ 1,101,670          $  1,113,100

COST OF SALES                                              1,039,919             1,048,124
                                                       ----------------    -----------------

GROSS PROFIT                                                  61,751                64,976

SELLING, GENERAL &
     ADMINISTRATIVE EXPENSES                                  49,093                51,520
                                                       ----------------    -----------------

OPERATING INCOME                                              12,658                13,456

INTEREST EXPENSE                                               3,783                 8,623

OTHER EXPENSE                                                  5,090                 3,530
                                                       -----------------   ------------------

INCOME BEFORE INCOME TAXES                                     3,785                 1,303

INCOME TAX PROVISION                                             149                   173
                                                       ------------------  ------------------

NET INCOME                                               $     3,636          $      1,130
                                                       ==================  ==================

NET INCOME PER SHARE (BASIC AND DILUTED)                 $      0.05          $       0.04
                                                       ==================  ==================

WEIGHTED AVERAGE NUMBER OF SHARES
          BASIC                                               80,152                30,078
          DILUTED                                             80,389                30,078
                                                       ==================  ===================


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


<PAGE>
<TABLE>
<CAPTION>





                               MERISEL, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (In thousands)
                                       (Unaudited)
                                                                                  Three Months Ended March 31,
                                                                                 1998                    1997
                                                                           ------------------     --------------------
<S>                                                                        <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                     $      3,636          $     1,130

Adjustments to reconcile net loss to net
   cash provided by operating activities:
   Depreciation and amortization                                                      2,509                3,180
   Provision for doubtful accounts                                                    1,844                4,797
Changes in assets and liabilities:
   Accounts receivable                                                              (41,201)             (32,384)
   Inventories                                                                       (4,794)              34,348
   Prepaid expenses and other assets                                                 (1,180)              (4,083)
   Income taxes receivable/payable                                                      327                  779
   Accounts payable                                                                  82,149                6,626
   Accrued liabilities                                                                   45               (3,816)
                                                                                ------------------     --------------------
Net cash provided by operating activities                                            43,335               10,577
                                                                                ------------------     --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                   (5,062)                (648)
                                                                                ------------------     --------------------
Net cash used for investing activities                                               (5,062)                (648)
                                                                                ------------------     --------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit                                            33,200              254,207
Repayments under revolving line of credit                                           (33,200)            (255,118)
Proceeds from issuance of promissory notes                                                                  (607)
Net repayments under other bank facilities                                                                  (514)
Repayments under other financing arrangements                                          (418)
Proceeds from sale of accounts receivable                                            34,737
Repayment of subordinated debt                                                                            (4,400)
Proceeds from issuance of Common Stock                                                  557
                                                                                ------------------     --------------------
Net cash provided by financing activities                                            34,876               (6,432)
                                                                                ------------------     --------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                 105                 (245)
                                                                                ------------------     --------------------
NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                                                  73,254                3,252

CASH AND CASH EQUIVALENTS, BEGINNING OF
   PERIOD                                                                            36,447               44,678
                                                                                ------------------     --------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $    109,701          $    47,930
                                                                                ==================     ====================


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


<PAGE>


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



1. GENERAL

Merisel,  Inc., a Delaware  corporation and a holding company (together with its
subsidiaries,  "Merisel" or the "Company"), is a leading distributor of computer
hardware, networking equipment and software products. Through its main operating
subsidiary,  Merisel Americas,  Inc. ("Merisel Americas"),  and its subsidiaries
the Company  markets  products and  services  throughout  North  America and has
achieved operational  efficiencies that have made it a valued partner to a broad
range  of  computer  resellers,   including   value-added   resellers  ("VARs"),
commercial  resellers/dealers,  and  retailers.  The Company  also  operates the
Merisel  Open  Computing  Alliance  (MOCA(TM)),  which  primarily  supports  Sun
Microsystems' UNIX(R)-based product sales and installations.

The  information for the three months ended March 31, 1998 and 1997 has not been
audited by independent accountants,  but includes all adjustments (consisting of
normal  recurring  accruals) which are, in the opinion of management,  necessary
for a fair presentation of the results for such periods.

Certain information and footnote  disclosures  normally included in consolidated
financial  statements  prepared in accordance with generally accepted accounting
principles have been omitted  pursuant to the requirements of the Securities and
Exchange Commission, although the Company believes that the disclosures included
in  these  financial  statements  are  adequate  to  make  the  information  not
misleading.  The consolidated financial statements as presented herein should be
read in conjunction with the consolidated financial statements and notes thereto
included  in  Merisel's  Annual  Report on Form 10-K for the  fiscal  year ended
December 31, 1997.

2.  New Accounting Pronouncements

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

3.    Fiscal Year

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



<PAGE>

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



4.    Debt

In January  1998,  the  Company and Merisel  Americas  entered  into a Revolving
Credit  Agreement  and  Convertible  Promissory  Note due July 2,  1998 (the "BT
Note") with Bankers Trust Company ("BT"), which permits borrowings thereunder by
Merisel  Americas of up to $46,500,000  outstanding at any one time. In order to
induce BT to enter into the BT Note,  Stonington Capital Appreciation 1994 Fund,
L.P.  (the  "Fund"),  the  sole  owner of  Phoenix  Acquisition  Company  L.L.C.
("Phoenix"),  which owns approximately 62.4% of the outstanding shares of common
stock of the Company,  caused its wholly owned subsidiary  Stonington  Financing
Inc.  ("SFI") to enter into a note put agreement (the "Note Put Agreement") with
BT.  Pursuant to the Note Put  Agreement,  BT may require SFI to purchase the BT
Note in the event of a default by Merisel Americas, including failure to pay the
BT Note at maturity. In the event SFI purchases the BT Note pursuant to the Note
Put  Agreement,  the BT Note is  convertible  into shares of common stock of the
Company at the option of SFI at a conversion  rate equal to the average  closing
price of the  Company's  common  stock on NASDAQ for the  fifteen  trading  days
immediately preceding the conversion. SFI and Merisel Americas also entered into
an agreement  wherein  Merisel  Americas  covenants  that, in the event BT gives
notice to SFI pursuant to the Note Put  Agreement  requiring SFI to purchase the
BT Note,  it will use its best  efforts  to  refinance  the BT Note prior to its
final maturity date.

Merisel  Americas may borrow  under the BT Note  through May 31,  1998,  and all
outstanding  borrowings mature on July 2, 1998.  Borrowings bear interest at the
rate of LIBOR plus 3% or, at the  Company's  option,  BT's prime rate plus 2%. A
commitment  fee of 0.5% is payable  with  respect  to the unused  portion of the
commitment.

5.   Dispositions

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

<PAGE>


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



Following are summarized pro forma operating  results for the three months ended
March 31, 1997  assuming  that the Company had sold the assets of Merisel FAB as
of January 1, 1997 and summarized  actual operating results for the three months
ended March 31, 1998.


                                  (in thousands except per share data)
                                      Actual              Pro Forma
                                   Three Months         Three Months
                                      Ended                Ended
                                    March 31,             March 31,
                                      1998                  1997
                                ----------------       -----------------

        Net Sales               $    1,101,670          $    910,923
        Gross Profit                    61,751                57,299
        Net Income (loss)                3,636                (1,024)
                                ================        =================
        Net Income (loss) per
        shares                  $         0.05          $      (0.03)
                                ================        =================
        Weighted Average
        Shares Outstanding              80,152                30,078
                                ================        =================

6.  Comprehensive Income

In June 1997,  the FASB issued  Statement of Financial  Accounting  Standard No.
130,  "Reporting for  Comprehensive  Income"  ("SFAS 130").  SFAS 130, which the
Company  adopted  in the  first  quarter  of  1998,  establishes  standards  for
reporting and displaying  comprehensive  income and its components in a full set
of general purpose  financial  statements.  Comprehensive  income is computed as
follows:

                                                         (in thousands)
                                                       Three Months Ended
                                                             March 31,
                                                     1998              1997
                                                     ----              ----

Net Income                                      $    3,636        $    1,130
                                                -------------     -------------

Other comprehensive income, net of tax:
   Foreign currency translation adjustments            117              (313)
                                                -------------     -------------

Comprehensive income                            $    3,753        $      817
                                                =============     =============


<PAGE>

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



7.  Earnings Per Share

The  Company  calculates   earnings  per  share  in  accordance  with  Financial
Accounting  Standard No. 128, "Earnings Per Share".  Basic earnings per share is
calculated  using  the  average  number of common  shares  outstanding.  Diluted
earnings  per share is  computed  on the basis of the  average  number of common
shares  outstanding  plus the  effect of  outstanding  stock  options  using the
"treasury  stock"  method.  In the  quarter  ended March 31,  1997,  there is no
material  difference between the primary earnings per share reported  previously
by the  Company,  and basic  earnings  per share or diluted  earnings  per share
methods adopted currently.

8. Supplemental Disclosure of Cash Flow Information

Cash paid (received) in the three month periods ended March 31 for interest and
income taxes was as follows:
                                             1998                   1997
                                            ------                 -------
                                                    (in thousands)
          Interest                        $  (768)                $ 9,238
          Income taxes                    $  (248)                $  (593)

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


<PAGE>


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



GENERAL

Merisel,  Inc., a Delaware  corporation and a holding company (together with its
subsidiaries,  "Merisel" or the "Company"), is a leading distributor of computer
hardware, networking equipment and software products. Through its main operating
subsidiary,  Merisel Americas,  Inc. ("Merisel Americas"),  and its subsidiaries
the Company  markets  products and  services  throughout  North  America and has
achieved operational  efficiencies that have made it a valued partner to a broad
range  of  computer  resellers,   including   value-added   resellers  ("VARs"),
commercial  resellers/dealers,  and  retailers.  The Company  also  operates the
Merisel  Open  Computing  Alliance  (MOCA(TM)),  which  primarily  supports  Sun
Microsystems' UNIX(R)-based product sales and installations.

As of March 28, 1997, the Company completed the sale of substantially all of the
assets of its wholly owned  subsidiary  Merisel FAB, Inc.  ("Merisel FAB") to a
wholly owned subsidiary of SYNNEX Information Technologies, Inc. ("Synnex"). The
Company's  operations  are now  focused  exclusively  on  distribution  in North
America.  The Company's  sales were $3.85 billion for 1997,  excluding  revenues
from  operations  sold in the  first  quarter  of 1997.  As the  North  American
Business  (defined below)  represents the ongoing  business of the Company,  the
following  discussion  and  analysis  will compare the  components  of operating
income for the three months ended March 31, 1997 for the North American Business
only.  As used  in this  discussion  and  analysis,  the  term  "North  American
Business"   refers  to  Merisel's   United  States  and  Canadian   distribution
businesses,  and  the  term  "Former  Operations"  refers  to  the  Merisel  FAB
operations disposed of by Merisel in the first quarter of 1997.

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

<PAGE>



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



principal amount  outstanding  under a revolving credit  agreement,  $53,798,000
principal amount of its 11.5% senior notes, and $13,200,000  principal amount of
subordinated  notes.  On  October  10,  1997,  Phoenix  exercised  its option to
convert,  without any additional  payment,  $3,296,286  principal  amount of the
Convertible Note into 1,084,305 shares of Common Stock, representing the maximum
amount that could be  converted  prior to  obtaining  stockholder  approval.  On
December 19, 1997,  following  receipt of  stockholder  approval,  the remaining
portion  of  the  Convertible  Note  was  converted  into  Common  Stock..   The
$152,000,000  in  proceeds  from the  issuance  of the  Initial  Shares  and the
Convertible  Note was  partially  offset by  professional  fees and other direct
costs related thereto totaling approximately $12,099,000, which were recorded as
a reduction to additional paid in capital at the time of conversion. As of March
31, 1998,  Phoenix owned  50,000,000  shares of Common Stock,  or  approximately
62.4% of the outstanding Common Stock.

RESULTS OF OPERATIONS

Three  Months  Ended March 31, 1998 as Compared to the Three  Months Ended March
31, 1997.

The following table sets forth the unaudited results of operations for the three
months  ended  March 31,  1998 and for the North  American  Business  and Former
Operations for the three months ended March 31, 1997.
<TABLE>
<CAPTION>

                                    Three Months Ended                                Three Months Ended
                                      March 31, 1998                                   March 31, 1997
                                (In Thousands) (Unaudited)                       (In Thousands) (Unaudited)
                     -------------------------------------------------  -----------------------------------------------
                        North                                                North
                       American          Former        Consolidated        American         Former        Consolidated
                       Business        Operations         Total             Business      Operations          Total
                    -------------     -------------    --------------    -------------  --------------  ---------------
<S>                 <C>               <C>              <C>                <C>           <C>             <C>

Net Sales            $1,101,670                         $1,101,670        $  910,923     $   202,177       $1,113,100
Cost of Sales         1,039,919                          1,039,919           853,624         194,500        1,048,124
                    -------------     -------------    --------------    -------------  --------------  ---------------
Gross Profit             61,751                             61,751            57,299           7,677           64,976

SG&A Expenses            49,093                             49,093            45,321           6,199           51,520
                    -------------     -------------    --------------    -------------  --------------  ---------------
Operating
Income               $   12,658       $                 $   12,658        $    11,978     $    1,478        $   13,456
                    =============     =============    ==============    =============  ==============  ===============

</TABLE>



Net sales for the North American  Business  increased 20.9% from $910,923,000 in
the quarter ended March,  31 1997 to  $1,101,670,000  in the quarter ended March
31, 1998. The increase  resulted from a 24.5% increase in net sales for the U.S.
and a 9.4%  increase  in  Canada.  All  of the  Company's  U.S.  customer  bases
contributed to the growth rate in the U.S., with particularly strong growth from
MOCA,  Commercial  and  Retail.  The growth  rate in Canada in terms of Canadian
dollars was 14.4%,  but the decline in the value of the Canadian dollar hampered
the  growth  rate in terms of U.S.  dollars,  as was also the case in the fourth
quarter of 1997.


<PAGE>

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



Hardware and accessories  accounted for 78% of net sales and software  accounted
for 22% of net sales in the first  quarter of 1998,  as  compared to 75% and 25%
for the same categories,  respectively,  for the North American  Business in the
first quarter of 1997.

Gross profit for the North American  Business  increased 7.8% or $4,452,000 from
$57,299,000  in the first  quarter of 1997 to  $61,751,000  in the 1998  period.
Gross profit as a percentage of sales,  or gross margin,  decreased from 6.3% in
1997 to 5.6% in 1998.  Gross  margins in the United  States and Canada were 5.6%
and 5.8%,  respectively,  for the first  quarter of 1998,  compared  to 6.4% and
5.9%, respectively,  for the first quarter of 1997. The decrease in margins as a
percentage  of sales is partially  the result of changes in customer and product
mix,  and  is  also  significantly   affected  by  intense  competitive  pricing
pressures.  The Company has committed  resources to reverse the deterioration of
margins by focusing  attention  on more  profitable  product  lines and improved
controls over margin  management  related  activities  such as sales  execution,
improved processes,  vendor rebate programs and purchasing  discounts.  However,
the Company believes that it will continue to face intense price competition.

Selling,  general and  administrative  expenses for the North American  Business
increased by 8.3% from  $45,321,000  in the first quarter of 1997 to $49,093,000
in the first  quarter of 1998.  However,  selling,  general  and  administrative
expenses as a percentage of sales  decreased  from 5.0% of sales in 1997 to 4.5%
for the same period in 1998. This decrease is primarily  attributable to efforts
to control  operating  expenses  while the Company  experienced  sales growth of
20.9% during the period.

As a result of the above items, operating income for the North American Business
improved  by  $680,000  from  $11,978,000  for the  first  quarter  of 1997 to $
12,658,000 for the first quarter of 1998.

Interest Expense; Other Expense; and Income Tax Provision

Interest expense for the Company,  including Former Operations,  decreased 56.1%
from $8,623,000 in 1997 to $3,783,000 in 1998. The decrease in interest  expense
is primarily  attributable to a reduction of the Company's debt by approximately
$154,902,000,  from  $288,331,000  on March 31, 1997 to $133,429,000 by December
31,  1997,  largely  from the use of proceeds  from the  issuance of the Initial
Shares and the  Convertible  Note to repay  substantially  all of the  Operating
Company Debt.

Other  expenses for the Company,  including  Former  Operations,  increased from
$3,530,000  for the three months ended March 31, 1997 to $5,090,000 for the same
period in 1998. This increase is due primarily to a $1,069,000 increase in asset
securitization  fees  which  are  included  in  other  expense.   The  increased
securitization  fees are due to increased  sales of accounts  receivables in the
North American Business in order to fund sales growth and daily operations.  The
average  proceeds drawn from the sale of accounts  receivable at month end under
the Company's

<PAGE>



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



securitization facilities increased from $251,294,000 for the three months ended
March 31, 1997 to $291,846,000 for the same period in 1998.

The income tax  provision  decreased  from an expense of $173,000  for the three
months  ended March 31,  1997 to an expense of  $148,000  for the same period in
1998. In both periods,  the income tax rate reflects only the minimal  statutory
tax  requirements  in the  various  states and  provinces  in which the  Company
conducts  business,  as the Company has sufficient net operating loss provisions
to offset federal income taxes.

Consolidated Loss

On  a  consolidated  basis,  net  income  for  the  Company,   including  Former
Operations,  increased from $1,130,000 for the three months ended March 31, 1997
to income of  $3,636,000  for the three  months  ended March 31, 1998 due to the
factors described above. Net income per share increased from $0.04 per share for
the three  months  ended March 31, 1997 to net income of $0.05 per share for the
same period of 1998.

SYSTEMS AND PROCESSES; YEAR 2000 ISSUES

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

Merisel  is in the  process  of  converting  its  U.S.  operations  to  the  SAP
client/server operating system. The Company plans to convert its U.S. operations
to the SAP system no later than the first part of 1999.  The  Company  converted
its Canadian  operations from a mainframe to the client/server  operating system
in August 1995. SAP is an enterprise-wide system which integrates all functional
areas of the business including order entry, inventory management and finance in
a  real-time  environment.  The  new  system  is  designed  to  provide  greater
transaction functionality,  automated controls,  flexibility, and custom pricing
applications.

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

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



The  Company  is  currently  engaged  in a review of its  computer  systems  and
applications,  including packaged software used by the Company, not addressed by
the SAP operating system. The Company expects to make any modifications required
to  resolve  year  2000  issues  in a timely  manner  and to have  the  majority
completed  by early  1999,  leaving  adequate  time to assess  and  correct  any
significant  issues that may materialize.  The Company is seeking  assurances of
year 2000  compliance  from its  suppliers  of software  and other  products and
services used internally that might raise year 2000 issues.  The Company is also
expecting to initiate formal  communications with selected vendors and customers
to  determine  the extent to which the  Company  is  vulnerable  to those  third
parties'  failure to remediate their own year 2000 issues.  The Company can give
no guarantee that the systems of other companies on which the Company's  systems
rely will be converted on time or that failure to convert by another  company or
a conversion  that is incompatible  with the Company's  systems would not have a
material  adverse  effect on the Company.  The Company is taking steps to reduce
the likelihood that such failures could affect the Company's systems through any
electronic communications.

The Company does not expect that the review and  modifications  described  above
(excluding the cost of implementing  the SAP operating  system in the U.S.) will
require  material  expenditures.  If  the  Company  is  unable  to  successfully
implement the SAP  operating  system  sufficiently  in advance of the year 2000,
however,  additional  expenditures could be required and such expenditures could
be substantial. See "Liquidity and Capital Expenditures" below.

The design and  implementation  of these new systems are  complex  projects  and
involve certain risks. Until such  implementation,  the Company will continue to
maintain its existing U.S.  systems and may experience  difficulty in processing
transactions,  which could adversely  affect operating income and cash flows. In
addition,  if the  modifications  required  to address the  Company's  year 2000
issues  are not made,  or are not  timely,  the year 2000  issues  could  have a
material  impact on the  operations  and financial  results and condition of the
Company.

VARIABILITY OF QUARTERLY RESULTS AND SEASONALITY

Historically,  the  Company  has  experienced  variability  in its net sales and
operating margins on a quarterly basis and expects these patterns to continue in
the  future.   Management  believes  that  the  factors  influencing   quarterly
variability  include:  (i) the overall  growth in the  computer  industry;  (ii)
shifts in short-term demand for the Company's products resulting,  in part, from
the introduction of new products or updates of existing products;  and (iii) the
fact that  virtually all sales in a given  quarter  result from orders booked in
that  quarter.  Due  to  the  factors  noted  above,  as  well  as  the  dynamic
characteristics  of the computer product  distribution  industry,  the Company's
revenues and earnings may be subject to material  volatility,  particularly on a
quarterly basis.



<PAGE>


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



Additionally,   the  Company's  net  sales  in  the  fourth  quarter  have  been
historically  higher than in its other three quarters.  Management believes that
the pattern of higher fourth  quarter  sales is partially  explained by customer
buying patterns relating to calendar year-end business and holiday purchases. As
a result of this  pattern the  Company's  working  capital  requirements  in the
fourth quarter have typically been greater than other quarters. Net sales in the
Canadian  operations  are also  historically  strong in the first quarter of the
fiscal year,  which is primarily due to buying  patterns of Canadian  government
agencies. See "Liquidity and Capital Resources" below.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Activity

Net cash  provided by operating  activities  during the three months ended March
31, 1998, was $43,335,000. The primary sources of cash from operating activities
include an increase in accounts payable of $82,149,000. The primary uses of cash
during the period  include a $41,201,000  increase in accounts  receivable.  The
increase in accounts payable  reflects the Company's  efforts to increase vendor
financing  through increased credit limits and more favorable payment terms. The
increase in accounts receivable is related primarily to increased sales volume.

Net cash used in investing  activities  was  $5,062,000  consisting  entirely of
leasehold  improvements and equipment  expenditures.  The equipment expenditures
were primarily  incurred in connection  with  implementation  of SAP in the U.S.
Capital  expenditures were also made for the purchase of computer  equipment for
internal use and for improvements of existing facilities.

Net cash  provided by financing  activities  was  $34,876,000  and was comprised
primarily of proceeds from the sale of accounts  receivable under the Company's
asset securitization facilities.

Securitization Facilities

Funds  generated by the sale of  receivables  in the U.S.  are provided  through
Merisel  Capital  Funding,  Inc.  ("Merisel  Capital  Funding"),  a wholly owned
subsidiary of Merisel  Americas.  Merisel Capital Funding's sole business is the
ongoing  purchase of trade  receivables from Merisel  Americas.  Merisel Capital
Funding  sells  these   receivables,   in  turn,   under  an  agreement  with  a
securitization  company, whose purchases yield proceeds of up to $300,000,000 at
any point in time.  Merisel Capital Funding is a separate  corporate entity with
separate  creditors who, upon its liquidation,  are entitled to be satisfied out
of  Merisel  Capital  Funding's  assets  prior to any  value  in the  subsidiary
becoming available to the subsidiary's equity holder. The agreement, as amended,
expires October 2000.


<PAGE>

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



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

Under these  securitization  facilities,  the receivables are sold at face value
with payment of a portion of the purchase price being deferred.  As of March 31,
1998, the total amount outstanding under these facilities was $345,297,000. Fees
incurred in connection with the sale of accounts receivable for the three months
ended March 31, 1998 were  $4,642,000  compared to  $3,573,000  incurred for the
three months ended March 31, 1997 and are recorded as other expense.

Debt Obligations, Financing Sources and Capital Expenditures

At March 31, 1998, Merisel, Inc. had outstanding  $125,000,000  principal amount
of 12-1/2%  Senior Notes due 2004 (the "12.5%  Notes").  The 12.5% Notes provide
for an  interest  rate of 12.5%  payable  semi-annually.  By  virtue of being an
obligation of Merisel, Inc., the 12.5% Notes are effectively subordinated to all
liabilities of the Company's subsidiaries, including trade payables, and are not
guaranteed by any of the Company's  subsidiaries.  The indenture relating to the
12.5% Notes contains certain covenants that, among other things,  limit the type
and amount of additional indebtedness that may be incurred by the Company or any
of its  subsidiaries  and impose  limitations on investments,  loans,  advances,
asset sales or transfers,  dividends and other payments,  the creation of liens,
sale-leasebacks, transactions with affiliates and certain mergers.

At March  31,  1998,  the  Company  had  promissory  notes  outstanding  with an
aggregate balance of $8,010,000.  Such notes provide for interest at the rate of
approximately 7.7% per annum and are repayable in 48 and 60 monthly installments
that  commenced  February 1, 1996,  with balloon  payments due at maturity.  The
notes  are  collateralized  by  certain  of  the  Company's  real  property  and
equipment.

In January  1998,  the  Company and Merisel  Americas  entered  into a Revolving
Credit  Agreement  and  Convertible  Promissory  Note due July 2,  1998 (the "BT
Note") with Bankers Trust Company ("BT"), which permits borrowings thereunder by
Merisel  Americas of up to $46,500,000  outstanding at any one time. In order to
induce BT to enter into the BT Note,  Stonington Capital Appreciation 1994 Fund,
L.P. (the "Fund"), the sole owner of Phoenix,  which owns approximately 62.4% of
the  outstanding  Common Stock,  caused its wholly owned  subsidiary  Stonington
Financing  Inc.  ("SFI")  to enter  into a note put  agreement  (the  "Note  Put
Agreement")  with BT. Pursuant to the Note Put Agreement,  BT may require SFI to
purchase  the BT Note in the event of a default by Merisel  Americas,  including
failure to pay the BT Note at

<PAGE>



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



maturity.  In the  event  SFI  purchases  the BT Note  pursuant  to the Note Put
Agreement,  the BT Note is convertible into shares of Common Stock at the option
of SFI at a  conversion  rate equal to the average  closing  price of the Common
Stock  on  NASDAQ  for  the  fifteen  trading  days  immediately  preceding  the
conversion.  SFI and Merisel  Americas  also entered  into an agreement  wherein
Merisel Americas covenants that, in the event BT gives notice to SFI pursuant to
the Note Put  Agreement  requiring  SFI to purchase the BT Note, it will use its
best efforts to refinance the BT Note prior to its final maturity date.

Merisel  Americas may borrow  under the BT Note  through May 31,  1998,  and all
outstanding  borrowings mature on July 2, 1998.  Borrowings bear interest at the
rate of LIBOR plus 3% or, at the  Company's  option,  BT's prime rate plus 2%. A
commitment  fee of 0.5% is payable  with  respect  to the unused  portion of the
commitment.  The  Company  is  currently  in  negotiations  with  respect  to  a
replacement facility, however, no assurances can be given that such negotiations
will be successful.

In addition to its requirements for working capital for operations,  the Company
presently  anticipates that its capital expenditures will be between $35,000,000
and  $45,000,000  for  1998,  primarily  consisting  of  costs  associated  with
implementing the SAP operating system, developing the Company's channel assembly
capabilities,  enhancing  electronic  services,  upgrading warehouse systems and
other  Company  facilities,  and  building  the sales  infrastructure.  However,
aggregate costs could exceed these estimates,  depending on the timing and scope
of the SAP implementation.  The Company intends to fund its capital expenditures
primarily through internally generated cash and lease financing.

At March 31, 1998, the Company had cash and cash equivalents of $109,701,000. In
the opinion of management,  anticipated  cash from operations in 1998,  together
with borrowings under the Company's  securitization  facilities and trade credit
from vendors, will be sufficient to meet the Company's requirements for the next
12 months,  without the need for additional  financing,  assuming the BT Note is
refinanced or replaced with other sources of internal or external funding.  This
assumes,  however,  that there are not material adverse changes in the Company's
relationships with its vendors,  customers or lenders. Any unforeseen event that
adversely  impacts the industry or the Company's  position in the industry could
have a direct and material unfavorable effect on the liquidity of the Company.



<PAGE>


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



ASSET MANAGEMENT

Merisel attempts to manage its inventory  position to maintain levels sufficient
to achieve high product  availability  and same-day order fill rates.  Inventory
levels may vary from period to period,  due to factors  including  increases  or
decreases in sales levels,  Merisel's practice of making large-volume  purchases
when  it  deems  such  purchases  to be  attractive  and  the  addition  of  new
manufacturers and products.  The Company has negotiated  agreements with many of
its manufacturers which contain stock balancing and price protection  provisions
intended  to  reduce,  in part,  Merisel's  risk of loss due to  slow-moving  or
obsolete inventory or manufacturer price reductions.  The Company is not assured
that these  agreements  will  succeed in reducing  this risk.  In the event of a
manufacturer  price  reduction,  the  Company  generally  receives  a credit for
products  in  inventory.  In  addition,  the  Company  has the right to return a
certain percentage of purchases,  subject to certain limitations.  Historically,
price protection and stock return privileges, as well as the Company's inventory
management  procedures,  have  helped  to  reduce  the risk of loss of  carrying
inventory.

Historically,  the Company has purchased foreign exchange  contracts to minimize
foreign  exchange  transaction  gains and  losses.  While  such  contracts  were
temporarily  not available to the Company in the latter part of 1996,  they were
again being purchased as of early 1997. No material  negative  financial  impact
was  experienced  during the time the contracts were not being used. The Company
plans to continue to use foreign exchange contracts in the future, to the extent
they are available and necessary.

The Company  offers  credit terms to  qualifying  customers  and also sells on a
prepay,  credit  card  and  cash-on-delivery  basis.  The  Company  also  offers
financing for its sales to certain of its customers  through  various floor plan
financing  companies.  With  respect to credit  sales,  the Company  attempts to
control its bad debt exposure by  monitoring  customers'  creditworthiness  and,
where  practicable,  through  participation in credit  associations that provide
customer  credit  rating  information  for certain  accounts.  In addition,  the
Company purchases credit insurance as it deems appropriate.

COMPETITION

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

Certain of Merisel's  competitors have substantially greater financial resources
than Merisel.  Merisel's principal competitors include large United States-based
distributors and aggregators such as Gates/Arrow, Inacom, Ingram Micro, MicroAge
and Tech Data Corporation, as well as regional distributors and franchisers.


<PAGE>

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



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



<PAGE>


                            PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In June 1994, Merisel and certain of its officers and/or directors were named in
putative  securities class actions filed in the United States District Court for
the  Central  District  of  California,  consolidated  as  In re  Merisel,  Inc.
Securities  Litigation.  Plaintiffs,  who are seeking  damages in an unspecified
amount, purport to represent a class of all persons who purchased Merisel common
stock  between  November  8,  1993 and June 7, 1994 (the  "Class  Period").  The
complaint, as amended and consolidated, alleges that the defendants inflated the
market price of  Merisel's  common stock with  material  misrepresentations  and
omissions  during  the  Class  Period.  Plaintiffs  contend  that  such  alleged
misrepresentations   are  actionable  under  Section  10(b)  and  20(a)  of  the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Following
the  granting  of  defendant's  first  motion to  dismiss on  December  5, 1994,
plaintiffs filed a second  consolidated and amended complaint December 22, 1994.
On April 3, 1995,  Federal  District  Judge Real  dismissed the  complaint  with
prejudice.  On August 8, 1997 the Court of Appeals  for the Ninth  Circuit  (the
"Court of Appeals")  reversed the  dismissal  and remanded the case to the trial
court.  On August 22,  1997,  the Company  filed a petition  for  rehearing  and
suggestion of rehearing en banc (the "Petition")  with the Court of Appeals.  On
January  30,  1998,  the Court of  Appeals  issued an order  amending  its prior
opinion and denying the Company's petitions for rehearing and rehearing en banc.
In light of this order,  the Federal  District Court held a hearing on April 13,
1998 at which  Judge Real set a trial date of  September  8, 1998.  The  Company
intends to defend itself vigorously against this claim.

In January 1997, the Company  received notice that Tech Pacific Holdings Limited
("Tech  Pacific")  had brought a claim in the Supreme  Court of New South Wales,
Sydney Registry  Commercial  Division,  against Merisel;  its subsidiary Merisel
Asia, Inc.  ("Merisel  Asia");  Patrick T. Woods,  former  managing  director of
Merisel Australia;  and Michael D. Pickett,  former CEO and Chairman of Merisel,
in a proceeding  captioned Tech Pacific Holdings Limited, v. Merisel,  Inc., et.
al.  In  March  1996,  Tech  Pacific   purchased   Merisel  Pty,  Ltd  ("Merisel
Australia"), Merisel's Australian subsidiary, for a purchase price of $9,900,000
pursuant  to the Share  Purchase  Agreement  dated as of March 7,  1996  between
Merisel  Asia  and  Tech  Pacific.   The  claim  asserted  various  breaches  of
representations and warranties as well as misleading and deceptive conduct under
relevant  provisions of Australian law with respect to the financial position of
Merisel Australia as represented by oral and written disclosures. The plaintiffs
sought to recover  specified damages exceeding AUS$8.3 million (or approximately
US$5.6 million as of March 27, 1998) as well as  unspecified  damages plus costs
and expenses associated with the claim. In April 1998 the Company entered into a
settlement  agreement  with  Tech  Pacific  which  did not and  will  not have a
material adverse effect on the Company or its financial condition.

<PAGE>



Effective  April 14, 1997, the Company  entered into a Limited Waiver and Voting
Agreement (the "Limited Waiver  Agreement") with holders of more than 75% of the
outstanding principal amount of the Company's 12-1/2% Senior Notes due 2004 (the
"12.5% Note").  Pursuant to the terms of the Limited Waiver Agreement,  upon the
fulfillment  of certain  conditions,  holders of the 12.5% Notes would  exchange
(the "Exchange")  their 12.5% Notes for common stock of the Company (the "Common
Stock"), which would equal approximately 80% of the outstanding shares of Common
Stock immediately after the Exchange. The Limited Waiver Agreement also provided
that,  immediately  after the  consummation  of the Exchange,  the Company would
issue certain  warrants to the existing  holders of Common Stock. The conditions
to the Exchange  were not met and, on September  19,  1997,  the Limited  Waiver
Agreement terminated in accordance with its terms. See "Management's  Discussion
and Analysis of Financial  Condition  and Results of  Operations."  Prior to the
termination  of the Limited  Waiver  Agreement  on September  19, 1997,  certain
disagreements  arose  between the Company and certain  holders of the  Company's
12.5% Notes ("Noteholders") over the interpretation of the Company's obligations
under the Limited Waiver Agreement,  including that the Limited Waiver Agreement
did not require  either the Board of Directors  of the Company (the  "Board") or
the Company to recommend to its stockholders  proposals relating to the proposed
debt  restructuring  in which the  Noteholders  would have exchanged their 12.5%
Notes for Common Stock (the "Noteholder Restructuring") and that the Company was
not obligated to seek confirmation of a "prepackaged  plan" of reorganization by
means of the "cramdown" provisions of the Bankruptcy Code. On September 4, 1997,
the  Company  filed suit in  Delaware  Chancery  Court (the  "Delaware  Action")
seeking a declaratory judgment with respect to these issues. The Company intends
to  vigorously  prosecute  its  claim in the  Delaware  Action.  There can be no
assurance,  however, that the Company will ultimately be successful with respect
to its claims.

On September  11, 1997,  certain  Noteholders  filed an answer to the  Company's
complaint in the Delaware  Action as well as a counterclaim  against the Company
asserting claims for breach of the Limited Waiver  Agreement,  unjust enrichment
and a declaratory  judgment (the  "Noteholder  Suit").  The Noteholder Suit also
asserts  a claim  for  unjust  enrichment  against  Dwight  A.  Steffensen,  the
Company's Chief Executive  Officer.  The Noteholder Suit seeks damages in excess
of $100 million from the Company. The Company's alleged breaches include,  among
other  things,  that the  Board  changed  its  recommendation  with  respect  to
proposals  relating  to  the  Noteholder  Restructuring.  The  Company  and  Mr.
Steffensen  filed  motions  for  judgment  on the  pleadings  on October 7, 1997
seeking to have the  Noteholder  Suit  dismissed.  On January 5, 1998, the Court
denied  both  motions.  The Company and Mr.  Steffensen  believe  that they have
strong defenses to each of the claims  asserted and intend to defend  themselves
vigorously.  There can be no assurance,  however,  as to the ultimate outcome of
these claims.

In  addition,   on  September  19,  1997,  the  Company   received  notice  from
representatives  of  the  lenders  under  the  agreements  relating  to  certain
operating company debt that, in connection with the Company's  repayment of such
debt,  such  lenders  believe that they are owed  approximately  $2.7 million in
fees.  On October 31,  1997,  the Company  received a further  letter  demanding
payment of such fees.  The  Company  does not believe any such fees are owed and
has so notified  the  lenders.  There can be no  assurance,  however,  as to the
ultimate outcome of this claim.


<PAGE>



On March 16, 1998, the Company  received a summons and  complaint,  filed in the
Superior  Court of  California,  County of Santa  Clara,  in a matter  captioned
Official  Unsecured  Creditors  Committee  of Media Vision  Technology,  Inc. v.
Merisel,  Inc. The plaintiffs  allege that certain  executive  officers of Media
Vision Technology,  Inc. ("Media Vision") committed fraud and breached fiduciary
duties owed to Media Vision  through,  interalia,  the improper  recognition and
reporting of sales, revenue and income and the failure to properly recognize and
report product returns during 1993 and 1994,  thereby  overstating the financial
condition of Media Vision as reflected in its financial statements for 1993. The
plaintiffs further allege that the Company aided, abetted, conspired and/or made
possible such acts and omissions of the Media Vision executives.  The plaintiffs
seek to recover compensatory damages,  including interest thereon, exemplary and
punitive  damages,  and costs  including  attorneys'  fees. On May 6, 1998,  the
Company filed a motion to dismiss the complaint on various legal grounds as well
as a motion to strike the punitive damages prayer. The motion is set for hearing
on July 14, 1998. The Company intends to defend itself  vigorously  against this
claim.

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



<PAGE>





Item 6. Exhibits and Reports on Form 8-K

         (a)  Exhibits

                None.


         (b) The  following  Reports on Form 8-K were filed  during the  quarter
             ended March 31, 1998.

                  Current  Report on Form 8-K,  dated  January 26,  1998,  which
                  reports  that the  Company  and its  wholly  owned  subsidiary
                  Merisel  Americas,   Inc.  entered  into  a  Revolving  Credit
                  Agreement  and  Convertible  Promissory  Note due July 2, 1998
                  with Bankers Trust Company.




<PAGE>







                                SIGNATURES





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

Date:   May 15, 1998

                                         Merisel, Inc.


                                 By:     /s/James E. Illson
                                         -------------------------------------
                                         James E. Illson
                                         Executive Vice President - Operations
                                         and Finance and Chief Financial Officer