SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

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

        For the fiscal year ended December 31, 2002

                                       OR

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE 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, California                           90245-0948
   (Address of principal executive offices)                (Zip Code)


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

Securities registered pursuant to Section 12(b) of the Act: None
                                                            ----

Securities registered pursuant to Section 12(g) of the Act:
                                                Common Stock, $0.01 Par Value
                                                -----------------------------

     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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
YES   __   NO   X
               ---

     As of June 30, 2002, the aggregate market value of voting stock held by
non-affiliates of the Registrant based on the last sales price as reported by
the Nasdaq National Market System was $6,510,127 (2,646,393 shares at a closing
price of $2.46).

     As of March 27, 2003, the Registrant had 7,616,383 shares of Common Stock
outstanding.


<PAGE>



                       Documents Incorporated By Reference

Portions of the registrant's definitive Proxy Statement for the 2003 Annual
Meeting of Stockholders to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A are incorporated by reference in Part III of this
Annual Report on Form 10-K.



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                                TABLE OF CONTENTS




                                                                                                              PAGE
                                     PART I

<S>   <C>                                                                                                     <C>
Item  1.  Business.......................................................................................     1
Item  2.  Properties.....................................................................................     8
Item  3.  Legal Proceedings..............................................................................     8
Item  4.  Submission of Matters to a Vote of Security Holders............................................     8

                                     PART II

Item  5.  Market for the Registrant's Common Equity and Related Stockholder Matters......................     9
Item  6.  Selected Financial Data........................................................................    10
Item  7.  Management's Discussion and Analysis of Financial Condition and Results of Operations..........    11
Item  7A. Quantitative and Qualitative Market Risk Disclosure............................................    18
Item  8.  Financial Statements and Supplementary Data....................................................    19
Item  9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........    40

                                    PART III

Item  10. Directors and Executive Officers of the Registrant.............................................    41
Item  11. Executive Compensation.........................................................................    41
Item  12. Security Ownership of Certain Beneficial Owners and Management.................................    41
Item  13. Certain Relationships and Related Transactions.................................................    41

                                     PART IV

Item  14. Controls and Procedures........................................................................    41
Item  15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K...............................    41

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               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION



         Certain statements contained in this Annual Report on Form 10-K,
including without limitation statements containing the words "believes,"
"anticipates," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Merisel, Inc. (the "Company"), or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the effect of (i) economic conditions generally, (ii)
industry growth, (iii) competition, (iv) liability and other claims asserted
against the Company, (v) the loss of significant customers or vendors, (vi)
operating margins, (vii) business disruptions, (viii) the ability to attract and
retain qualified personnel, and (ix) other risks detailed in this report. For a
detailed discussion of certain of these factors, see "Business - Certain
Business Factors." These factors are also discussed elsewhere in this report,
including, without limitation, under the captions "Business," "Legal
Proceedings" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations." Given these uncertainties, readers are cautioned not
to place undue reliance on such forward-looking statements. The Company
disclaims any obligation to update any such factors or to publicly announce the
result of any revisions to any of the forward-looking statements contained or
incorporated by reference herein to reflect future events or developments.


<PAGE>




                                     PART I

Item 1. Business.

Overview

Merisel, Inc., a Delaware corporation and a holding company (together with its
subsidiaries, "Merisel" or the "Company"), is a software licensing solution
provider. The Company operates its software licensing business through its main
operating subsidiary Merisel Americas, Inc. ("Merisel Americas"). Until July 28,
2001, the Company also operated a Canadian distribution business, which
distributed computer hardware and software products to a broad range of reseller
customers in Canada. In addition, prior to 2001 the Company operated a full-line
U.S. computer products distribution business which, excluding software
licensing, the Company determined to wind down in December 2000.

Merisel's software licensing business provides U.S. customers with nearly 20,000
licensing products from leading manufacturers, including Microsoft, Lotus/IBM,
Network Associates, Executive Software, Macromedia, Borland, Computer
Associates, Corel, Panda Software and Symantec. The software licensing business
involves the sale of multiple end user licenses for software products and
requires minimal distribution of boxed product. Merisel began operating its
software licensing business as a separate division of its U.S. distribution
business in 1997 and, by 1999, it had earned the reputation as a leader in
operational efficiency and customer service. Today, Merisel's software licensing
business is focused on leveraging its positive reputation in the marketplace and
growing revenues in key vertical markets in support of manufacturer strategies.

The Company's U.S. software licensing net sales were approximately $39.1 million
in 2001 and $81.6 million in 2002. In 2002, the Company changed its fiscal year
from the Saturday closest to December 31 to December 31. Due to this change, the
Company had net sales on December 31, 2001 of $929,000 or 1.14% of total net
sales, which were included in net sales for fiscal year 2002.

As a result of the sale of businesses and the wind-down of its U.S. distribution
business, excluding software licensing, the Company has substantial cash
balances that are in excess of what it believes it requires for liquidity for
its ongoing business and to meet obligations related to the wind-down. The
Company is actively seeking and exploring acquisition and other investment
opportunities.

For a discussion of certain business and other factors that may have an adverse
effect on the Company, see "Certain Business Factors" and Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The Company files annual, quarterly and special reports, proxy statements and
other information with the SEC. The Company's SEC filings are available free of
charge to the public over the Internet at the SEC's website at
http://www.sec.gov. Our SEC filings can also be accessed on Merisel's
website at http://www.merisel.com by a link to the SEC's website as soon as they
are filed with or furnished to the SEC. You may also read and copy any document
Merisel files with the SEC at its public reference rooms in Washington, D.C.,
New York, NY and Chicago, IL. Please call the SEC at (800) SEC-0330 for further
information on the public reference rooms.

Background and Business Strategy

General. The Company was incorporated in 1980 as Softsel Computer Products, Inc.
and changed its name to Merisel, Inc. in 1990 in connection with the acquisition
of Microamerica, Inc. ("Microamerica"). In the years following the Microamerica
acquisition, the Company's revenues increased rapidly through both internal
growth and acquisition. This increase reflected the substantial growth in both
domestic and international sales as the worldwide market for computer products
expanded and manufacturers increasingly turned to wholesale distributors for
product distribution. From 1996 through the first quarter of 1997, the Company
engaged in the process of divesting of its operations outside of the United
States and Canada and its non-distribution operations, which resulted in the
Company's operations being focused exclusively in the United States and Canada
and consisting of three distinct business units: United States distribution,
Canadian distribution and the Merisel Open Computing Alliance ("MOCA"), a
distributor of Sun Microsystems products. Effective as of October 27, 2000, the
Company completed the sale of its MOCA business unit to Arrow Electronics, Inc.
See Item 7. "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Overview."

In December 2000, the Company determined that, primarily as a result of a
significant contraction in sales and continuing substantial operating losses,
the U.S. distribution business would focus solely on software licensing and that
the balance of the U.S. distribution business would be wound down. Although the
wind-down was substantially completed by the end of the first

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quarter of 2001, the Company has substantial  remaining  obligations  related to
the U.S. distribution  business,  primarily with respect to leases,  vendors and
employee  severance.  See  Item 7.  "Management's  Discussion  and  Analysis  of
Financial   Condition   and  Results  of  Operations  -  Liquidity  and  Capital
Resources." As part of the wind-down, the U.S. distribution business sold all of
its  non-software  licensing  inventory and discontinued all of its non-software
licensing manufacturer relationships.

Effective  July 28, 2001,  the Company sold its Canadian  distribution  business
("Merisel  Canada")  to  SYNNEX  Information  Technologies,  Inc.  See  Item  7.
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Overview."

Through its subsidiary Optisel, Inc. ("Optisel"), in November 2000, the Company
acquired substantially all the e-services assets of Value America, Inc. with the
intention of leveraging the Company's distribution and logistics capabilities to
operate a logistics and electronic services business. In connection with the
sale of the MOCA business to Arrow in October 2000, the Company entered into a
transition services agreement with Arrow pursuant to which Optisel provided
fee-based distribution and logistics services and information technology
services for MOCA through February 1, 2002. In connection with the sale of
Merisel Canada to Synnex, Merisel and Synnex entered into a fee-based transition
services agreement pursuant to which Optisel provided information technology
services to Merisel Canada through September 10, 2001. Optisel did not generate
any significant revenue except under these two transition services agreements.
As a result of economic conditions generally, and with respect to
Internet-related businesses specifically, and Optisel's lack of success in
generating business, the Company decided to discontinue operation of the Optisel
business during the fourth quarter of 2001.

Software Licensing. During 2000, the Company's software licensing business was
adversely affected by the contraction of the U.S. distribution business and the
termination of many vendor relationships. Net sales for the U.S. software
licensing business were approximately $68 million, $68 million and $56 million
for the first, second and third quarters of 2000, respectively, and declined to
$3.2 million for the fourth quarter of 2000. Despite the precipitous decline in
net sales for the U.S. software licensing business, the Company determined that,
with its strong reputation in software licensing and its positive relationships
with many key software manufacturers, the business had the potential to be
returned to a successful business model, albeit on a much smaller scale. Since
the fourth quarter of 2000, net sales for the software licensing business have
increased significantly every quarter to approximately $27.3 million in the
fourth quarter of 2002. Today, Merisel's software licensing business is focused
on growing its customer base and increasing customer loyalty by focusing on
providing superior customer service and operating efficiencies and growing
revenues in key vertical markets in support of manufacturer strategies. The
Company is also focused on expanding its product breadth through new
arrangements with key software manufacturers.

Acquisition Strategy. As a result of the sale of businesses and the wind-down of
its U.S. distribution business excluding software licensing, the Company has
substantial cash balances that are in excess of what it believes it requires for
liquidity for its ongoing business and to meet obligations related to the
wind-down. The Company is actively seeking and exploring acquisition and other
investment opportunities.


The Computer Products Distribution Industry

The Company's software licensing business competes in the computer products
industry. The primary participants in the computer products industry are
manufacturers, wholesale distributors, solution providers and resellers. The
supply chain was traditionally based on a model through which manufacturers
would sell directly to wholesalers, resellers and end users; wholesale
distributors would sell to resellers; and resellers would sell to other
resellers and directly to end users. As the industry continues to mature, the
roles of channel players are becoming less clearly defined. Generally, full-line
wholesale distributors purchase a wide range of products in bulk directly from
manufacturers and then ship products in smaller quantities to many different
types of resellers. Solution providers like the Company's software licensing
business operate similarly to both wholesale distributors and resellers, but
with a narrower product offering. The Company believes that by focusing solely
on software licensing, it has the potential to become the preeminent solution
provider in this important category. As the software industry continues to shift
from the sale of boxed product to licensing, the Company believes that its
opportunities will increase. Types of resellers include corporate resellers,
value-added resellers or "VARs," system integrators, direct marketers,
independent dealers, mass merchants and computer chain stores, and resellers
conducting business via the Internet ("e-tailers"). Resellers are often further
defined and distinguished by the types of value-added services they provide and
by the end-user markets they serve, such as large corporate accounts, small to
medium-sized businesses, and home users.



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Resellers rely on wholesale distributors and/or solution providers for product
availability, flexible financing alternatives, technical support, prompt and
efficient delivery. In addition, some resellers are increasingly relying on
distributors for "back-office" support services, such as product procurement,
fulfillment, logistics and a broad product offering. Manufacturers benefit from
using wholesale distributors and solution providers as an alternative to direct
sales to customers by not having to maintain large sales forces, warehouse
facilities and financing capabilities. Manufacturers also rely on distributors
and solution providers to provide marketing and support services as well as
credit for customers. Resellers and end users rely on solution providers for in
depth product knowledge, customized services, and greater customer support.

The computer products industry has historically experienced double-digit growth
throughout North America. However, growth rates were substantially lower during
2000 and were negative during 2001 and 2002. Trends in the computer products
supply chain include custom configuration of products by distributors, various
supply chain management strategies to eliminate time and cost, and an increase
in the use of "eBusiness" solutions. Electronic business, or eBusiness, refers
to the use of electronic systems and applications to exchange information and
transact business. Electronic business can simplify account set-up, ordering,
shipping and support, and thereby facilitate sales while decreasing both selling
and purchasing costs. Electronic business continues to increase in significance
in the computer products distribution industry.

Products and Suppliers

The Company's software licensing business offers its customers nearly 20,000
products from leading manufacturers, including Microsoft, Lotus/IBM, Network
Associates, Executive Software, Macromedia, Borland, Computer Associates, Corel,
Panda Software and Symantec. The software licensing business involves the sale
of multiple-end user licenses for software products, generally for installation
on multiple systems, and requires minimal distribution of boxed software
product. Prior to the contraction of the Company's U.S. distribution business
during 2000, Merisel's U.S. software licensing business offered products from 21
manufacturers and ranked number one in software licensing sales for key
manufacturers such as Microsoft and Novell. Although many of these distribution
arrangements were terminated during 2000, management of Merisel's software
licensing business has maintained positive relationships with many key software
manufacturers beyond the manufacturers whose products it currently distributes.

Merisel enters into written agreements with the manufacturers of the products it
sells. As is customary in the industry, these agreements usually provide
non-exclusive rights and often contain territorial restrictions that limit the
countries in which Merisel is permitted to sell the products. The Company's
suppliers generally warrant the products sold by the Company and allow the
Company to return defective products, including those that have been returned to
the Company by its customers, as well as products discontinued by the supplier.
Because software licensing involves very limited distribution of boxed product,
the Company maintains minimal inventory, most of which consists of documents and
software media that may be shipped in connection with a software license
purchase. Accordingly, unlike the computer products industry generally, there is
little, if any, risk of loss due to slow-moving inventory, supplier price
reductions, product updates or obsolescence. The Company's agreements with its
suppliers, which typically have a term of at least one year, generally contain
provisions permitting early termination by either party upon written notice.

The Company's software licensing business provides manufacturers with access to
Merisel's customer base, as well as the means to reduce credit, marketing and
overhead costs typically associated with maintaining direct customer
relationships. Merisel develops and implements marketing and sales programs for
specific manufacturers to increase customer purchasing depth and breadth.
Programs include bundled offers, growth-goal incentives, telemarketing
campaigns, web advertising and customer training events as well as channel
communication vehicles such as targeted direct mail, e-mail blasts, webcasts,
monthly newsletters and advertising.

The sale of products supplied by two of the Company's vendors, Network
Associates and Symantec, accounted for approximately 79.8% and 13.8% in 2002,
71.2% and 23.4% in 2001, and 12.4% and 6.8% in 2000, respectively, of net sales
for the Company's U.S. software licensing business. Despite the loss of a direct
relationship between the Company and Symantec effective during the third quarter
of 2002, the Company experienced overall strong fourth quarter sales and margin
growth. However, the loss of a direct relationship with its remaining primary
vendor could have a material adverse impact on the Company's business and
financial results. See Item 1 - "Certain Business Factors - Dependence on Key
Manufacturers."

Customers and Customer Services

With the dramatic decline in net sales of the software licensing business as the
U.S. distribution business contracted in 2000, the number of active customers
declined to a fraction of prior levels. The software licensing business is
focused on reestablishing customer relationships and broadening its customer
base through proactive marketing to prospective new

<PAGE>


customers. Merisel's customer base is largely comprised of, and Merisel's
recruitment efforts are mainly focused on, value-added customers that service
small-to-medium size businesses and enterprise solution providers. In the
computer products industry generally, larger customers often establish direct
relationships with manufacturers for their more popular products but utilize
distributors and/or software solution providers for slower-moving products and
for fill-in orders of fast-moving products that may not be available on a timely
basis from manufacturers. Customer service (particularly with respect to the
complexities of manufacturers' licensing processes), quick response to bid
requests, and electronic ordering capabilities are critically important to
software licensing customers. Merisel has had a long-standing reputation as a
leader in these areas and is currently leveraging this positive reputation in
the marketplace to rebuild and grow its software licensing business.

Merisel generally does not have contracts with its customers. Merisel's top 10
customers for its software licensing business accounted for 64.8% of total
software licensing net sales in 2002. Merisel had one customer for its software
licensing business that accounted for more than 10% of total U.S. software
licensing net sales in 2002, accounting for 19.8% of net sales. Merisel's top 10
customers for its software licensing business accounted for 76.0% of total
software licensing net sales in 2001. Merisel had two customers for its software
licensing business that accounted for more than 10% of total U.S. software
licensing net sales in 2001, accounting for 24.2% and 15.0% of net sales. For
2000, Merisel had three customers that accounted for more than 10% of total U.S.
software licensing net sales, accounting for 12.7%, 11.5% and 10.4% of net
sales. The loss of one or more of the Company's major customers could have a
material adverse effect on the Company. See Item 1 "Certain Business Factors -
Dependence on Major Customers."

Single-Source Provider. The software licensing products currently offered by
Merisel fall mainly in the categories of anti-virus, desktop applications,
graphics, IT management, security, storage and storage management, system
utilities, system applications and web-based solutions products. Merisel
believes that, while it is no longer a full-line distributor of computer
hardware and software products, it can offer significant value by becoming a
single-source provider of software licensing products to its customers and
focusing on providing superior customer service for software licensing only.
Merisel is focused on reestablishing relationships with key software
manufacturers whose products it does not currently distribute and rebuilding its
product offering.

Customers and Sales Organizations. Merisel's software licensing business caters
specifically to customers who serve the software needs of corporate,
institutional and government clients. This business serves its customers through
a team of highly trained sales representatives that receive cross-training on
all of the products sold through the business. This cross training is unique in
the industry and leads to enhanced customer service with every sales
representative trained to assist customers with every software product.
Merisel's team of licensing professionals is dedicated to servicing and
supporting customers through a customer-centric approach that focuses on
thoroughly understanding vendor solutions as well as the needs of the reseller
and its customers. The sales team's efforts include the introduction of new
products and programs to expand the customers' product offerings and enhance
their value proposition to their customers.

Financing Programs. Merisel offers various credit terms to qualifying customers
and also sells on a pre-pay and credit card basis. Merisel's credit policy for
qualified customers allows them to use their Merisel credit line for software
licensing purchasing, increasing their credit availability to be used for other
products with full-line distributors. 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. The Company establishes reserves for estimated credit losses in the
normal course of business. If the Company's receivables experience a substantial
deterioration in their collectibility, the Company's financial condition and
results of operations may be adversely impacted. See Item 1. "Certain Business
Factors - Dependence on Major Customers; - Customer Credit Exposure."

Information Services. Merisel provides its customers with state-of-the-art
e-business  solutions.  The Company's Web site provides information on Merisel's
programs and services, strategic announcements, manufacturer products and links,
and access to SELline, the Company's advanced on-line configuration,  query and
procurement tool. SELline offers secure, 24 hour access and real-time interfaces
to  Merisel's  ERP  system  so  that  customers  can  identify  products,  place
quotations  and  orders   and  review  order  and  shipment   status  at  their
convenience.  Manufacturers' up-to-date promotions,  product news, programs and
trial download information are listed on SELline to help educate customers.  The
Company also offers  various types of electronic  interfaces  with its partners,
including EDI, XML, and flat file. In addition,  Merisel is the only self-hosted
solution provider for Network Associates.  In this capacity, the Company deploys
McAfee's anti-virus managed services to the end user on behalf of the reseller.


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Operations and Systems

Merisel has made significant  investments in advanced ERP, warehouse management,
and customer relationship management systems to support sales growth and improve
service levels.  Merisel's distribution center is co-located with its offices in
El Segundo,  California and utilizes a computerized  warehouse management system
to improve shipping, receiving and picking accuracy rates.

The  Company  utilizes  an  SAP  R/3  enterprise-wide  information  system  that
integrates  all  functional   areas  of  the  business,   including   sales  and
distribution,  inventory  management,  financial services  and marketing,  in a
real-time  environment.  The system is  designed to support  business  growth by
providing greater functionality,  up-to-date technology,  increased flexibility
and  enhanced  reporting  capabilities.  SAP  has  provided  a  solid  base  for
application development,  allowing Merisel to expedite the development cycle for
functionality improvements in the system. The Company's SAP system performs with
sub-second,  on-line  response  time.  Availability  for all of  Merisel's  core
systems has averaged 99.9 percent or above since April 1999. SAP also enforces a
high degree of data integrity,  which better supports Merisel's reporting needs.
The Company is currently on the 4.6D version of SAP.

Competition

Competition in the computer products distribution industry is intense. Key
competitive factors in the distribution of software licenses include price,
breadth of products, credit availability and financing options, availability of
technical support and product information, marketing services and programs, and
ability to influence a buyer's decision.

Certain of Merisel's competitors have substantially greater financial resources
and broader product offerings than Merisel. Merisel's principal competitors for
software licensing business include large United States-based distributors such
as Ingram Micro and Tech Data, as well as a number of regional distributors and
resellers. Because of the nature of software licensing, Merisel competes with
manufacturers that sell directly to computer resellers and end users to a more
limited extent than in other areas of computer products distribution. See Item
1. "Certain Business Factors - Size of Competitors."

Variability of Quarterly Results and Seasonality

Historically, the industry in which the Company operates has experienced
variability in its net sales and operating margins on a quarterly basis and the
Company expects these patterns to continue in the future with respect to its
software licensing business. See Item 7. "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Variability of Quarterly
Results and Seasonality."

Employees

As of March 27, 2003, Merisel had approximately 40 employees. Merisel
continually seeks to enhance employee morale and strengthen its relations with
employees.

Environmental Compliance

The Company believes that it is in substantial compliance with all environmental
laws applicable to it and its operations.

Certain Business Factors

In addition to the other information in this report, readers are cautioned to
carefully consider the following business factors that may affect the future
operations and performance of the Company.

Size of Software Licensing Business. The Company's software licensing business
is not currently profitable and is not generating sufficient revenue to cover
selling, general and administrative expenses and other costs required to operate
this business. The Company believes that, in order to compete effectively in
software licensing, it must maintain high service

<PAGE>


levels, specialized sales and marketing infrastructure, specific software
licensing management expertise, and state-of-the-art information technology
capabilities that entail fixed costs that cannot be further reduced
significantly. To become profitable, the Company's software licensing business
must grow significantly and the Company must add key manufacturers. The Company
believes that it will be able to achieve revenue levels that will allow its
software licensing business to be profitable within the next several quarters,
provided that the Company continues to be successful in adding new manufacturers
and the Company is able to maintain the growth rates it has achieved over the
last year. There is no assurance that the Company will be successful in doing
so.

Dependence on Major Customers. For 2002, 10 customers accounted for
approximately 64.8% of the Company's U.S. software licensing revenues, with one
customer accounting for approximately 19.8%. The Company is focused on
increasing its customer base and decreasing the percentage of net sales and
receivables attributable to a small number of customers. Until that has been
accomplished, however, the loss of one or more of the Company's major customers
could have a material adverse effect on the Company.

Dependence on Key Manufacturers. In 2002, 93.6% of Merisel's software licensing
sales were derived from products supplied by its two largest vendors, with one
vendor accounting for 79.8% of sales. As is customary in the industry, the
Company's agreements with these vendors provide non-exclusive distribution
rights and may be terminated by either party on short notice. The termination of
the Company's distribution agreement with one of its key vendors, or a material
change in the terms of the distribution agreement, including a decrease in
rebates, could have a material adverse effect on the Company.

Customer Credit Exposure. Substantially all of the Company's software licensing
sales are financed by the Company. As a result, the Company's business could be
adversely affected in the event of the deterioration of the financial condition
of one or more of its customers, particularly one of the Company's larger
customers, resulting in the customer's inability to pay amounts owed to the
Company. This risk would be increased in the event of a general economic
downturn affecting a large number of the Company's customers. At December 31,
2002, the Company's two largest customers represented 41.7%, or $9,148,000, of
the Company's total trade receivables. The Company believes it has established
an adequate reserve against the December 31, 2002 accounts receivable balance.

Size of Competitors. The Company's competitors in its software licensing
business include distributors with businesses that are substantially larger than
the Company's. Because of their size and the fact that many of these larger
competitors operate world-wide businesses, these firms can achieve greater
economies of scale than the Company, allowing them to offer more favorable
pricing and other terms to resellers, and may be able to form stronger
relationships with manufacturers. The Company believes that it can achieve
operating expense levels as a percentage of sales as low as those that can be
achieved by its much larger competitors only if it significantly increases its
revenues. See "Competition" above.

Gross Margin Pressure. Historically, the computer distribution industry in
general and the Company in particular have experienced declines in gross
margins. The decline has resulted in part from a reduction in manufacturer
rebates and changes by manufacturers in terms and conditions, which have
resulted in a shift of costs to distributors, solution providers and resellers;
in addition, economies of scale achieved by growing distributors have
decreased their costs and allowed them to sell products at lower gross margins.
Merisel attempts to address the gross margin issue through pricing and other
actions. However, because of the size of Merisel's business relative to its
largest competitors and Merisel's need to significantly increase its revenues in
order for its software licensing business to become profitable, the Company is
particularly vulnerable to competitive pricing actions of its competitors.


Acquisition Strategy. Any failure by us to successfully complete acquisitions
that enhance our businesses prospects could harm our business and financial
prospects. As part of our business strategy, we frequently engage in discussions
with third parties regarding possible acquisitions in order to further our
strategic objectives. In order to pursue this strategy successfully, we must
identify suitable acquisition candidates, complete these transactions, some of
which may be large and complex, and integrate the acquired companies.
Integration and other risks of acquisitions can be more pronounced for larger
and more complicated transactions, or if multiple acquisitions are pursued
simultaneously.

Integration issues are complex, time-consuming and expensive and, without proper
planning and implementation, could significantly disrupt our business. The
challenges involved in integration include:

         o demonstrating to customers and manufacturers that the transaction
         will not result in adverse changes in client service standards or
         business focus and helping customers conduct business easily;

         o consolidating and rationalizing corporate IT infrastructure,
         including implementing information management and system processes that
         enable increased customer satisfaction, improved productivity and lower
         costs;
<PAGE>

         o consolidating administrative infrastructure, including IT systems,
         and manufacturing operations and maintaining adequate controls
         throughout the integration;

         o coordinating sales and marketing efforts to communicate our
         capabilities effectively;

         o preserving marketing or other important relationships and resolving
         potential conflicts that may arise;

         o minimizing the diversion of management attention from ongoing
         business concerns;

         o persuading employees that business cultures are compatible,
         maintaining employee morale and retaining key employees while
         implementing restructuring programs;

         o coordinating and combining operations, subsidiaries and affiliated
         entities, relationships and facilities, which may be subject to
         additional constraints imposed by local laws and regulations and also
         may result in contract terminations or renegotiations and labor and tax
         law implications; and

         o managing integration issues shortly after or pending the completion
         of other independent reorganizations.

Even if an acquisition is successfully integrated, we may not receive the
expected benefits of the transaction. Managing acquisitions requires varying
levels of management resources, which may divert our attention from other
business operations. These transactions may result in significant costs and
expenses and charges to earnings. As a result of the foregoing, any completed,
pending or future transactions may contribute to financial results that differ
from the investment community's expectations in a given quarter.

Economic Downturn. The economic downturn could adversely affect our revenue,
gross margins and expenses. Our revenue and gross margins depend significantly
on the overall demand for software products and services. Softening demand for
our products and services caused by the ongoing economic downturn may result in
decreased revenue, earnings or growth rates and problems with our ability to
realize customer receivables. The economy has weakened and market conditions
continue to be challenging. As a result, individuals and companies are delaying
or reducing expenditures, including those for information technology. In
addition, if our customers experience financial difficulties, we could suffer
losses associated with the outstanding portion of accounts receivable. During
the current downturn, we have experienced gross margin declines, reflecting the
effect of competitive pressures. Our selling, general and administrative
expenses have been impacted due in part to an increase in bad debt write-offs
and additions to reserves in our receivables portfolio. Further delays or
reductions in information technology spending could have a material adverse
effect on demand for our products and services and consequently our results of
operations, prospects and stock price.


Terrorist Acts. Terrorist acts and acts of war may seriously harm our business
and revenue, costs and expenses and financial condition. Terrorist acts or acts
of war (wherever located around the world) may cause damage or disruption to the
Company, our employees, facilities, partners, suppliers or customers, which
could significantly impact our revenue, costs and expenses and financial
condition. The terrorist attacks that took place in the United States on
September 11, 2001 were unprecedented events that have created many economic and
political uncertainties, some of which may materially harm our business and
results of operations. The long-term effects on our business of the September
11, 2001 attacks are unknown. The potential for future terrorist attacks, the
national and international responses to terrorist attacks or perceived threats
to national security, and other acts of war or hostility have created many
economic and political uncertainties that could adversely affect our business
and results of operations in ways that cannot presently be predicted.


Business Disruptions. Business disruptions could seriously harm our future
revenue and financial condition and increase our costs and expenses. Our
operations could be subject to natural disasters and other business disruptions,
which could seriously harm our revenue and financial condition and increase our
costs and expenses. Our corporate headquarters are located in California, near
major earthquake faults. The ultimate impact on us, our significant suppliers
and our general infrastructure of being located near major earthquake faults is
unknown, but our revenue and financial condition and our costs and expenses
could be significantly impacted in the event of a major earthquake. In addition,
some areas, including California, have experienced, and may continue to
experience, ongoing power shortages, which have resulted in "rolling blackouts."
These blackouts could cause disruptions to our operations or the operations of
our manufacturers or customers. We maintain insurance for losses and
interruptions caused by certain types of business interruptions;
however, there is no assurance that a particular loss may be insured.

<PAGE>

Item 2. Properties.

The Company's headquarters and distribution center are located in El Segundo,
California, where the Company leases a 50,700 square-foot facility. The Company
owns 29 acres of undeveloped land in Cary, North Carolina, which the Company is
seeking to sell. The Company believes that its facilities provide sufficient
space for its present needs.

Item 3. Legal Proceedings.

The Company is involved in certain legal proceedings arising in the ordinary
course of business, none of which is expected to have a material impact on the
financial condition or results of operations of Merisel. The Company made
estimates of its potential exposures and has established reserves for potential
losses related to such proceedings. There can be no assurance that the Company's
reserves will fully cover any possible exposure.

In addition, over the last several years the Company has disposed of a number of
businesses, including all of its operations outside the United States, many of
which had obligations that had been guaranteed by the Company. In connection
with those dispositions, the Company sought either to have any guarantees
released or to be indemnified against any liabilities under guarantees. The
Company may not have identified all guarantees to be released and, in at least
one instance, the indemnification provided to the Company is no longer of any
value. Due to the nature of these indemnifications, the Company's exposure under
the agreements cannot be estimated and no amounts have been recorded for such
indemnities.


Item 4. Submission of Matters to a Vote of Security Holders.

On December 9, 2002, the Company held its annual meeting of stockholders for the
purpose of electing two incumbent  directors,  Bradley J. Hoecker and Dr. Arnold
Miller. With respect to such election,  the Company's stockholders cast votes as
follows:  Bradley J.  Hoecker-7,744,537  for and  120,057  abstentions;  and Dr.
Arnold Miller-7,742,874 for and 121,720 abstentions.

The Company has scheduled its annual meeting of Stockholders for 2003 for June
4, 2003. Stockholder proposals must be received at the Company's executive
offices at 200 Continental Boulevard, El Segundo, California 90245, addressed to
the attention of the President by April 21, 2003. Stockholder proposals received
after April 21, 2003 will be considered untimely under Rule 14(a)-4(c)(1) and
accordingly, the proxies solicited with respect to the Company's 2003 Annual
Meeting of Stockholders will confer discretionary authority to vote on any
stockholder proposals received by the Company after April 21, 2003.
<PAGE>

                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters.

The Company's Common Stock is traded on the National Market tier of the Nasdaq
Stock Market under the symbol MSEL. The following table sets forth the quarterly
high and low sale prices for the Common Stock as reported by the National
Market. All stock prices are closing prices per The Nasdaq National Market, as
adjusted by a one-for-ten reverse stock split that was effective February 14,
2001.

                                            High              Low
                Fiscal Year 2001
                     First quarter....       2 13/16          1 3/16
                     Second quarter...       1 15/16          1
                     Third quarter....       2 15/16          1 3/8
                     Fourth quarter...       2 11/16          1 3/8

                Fiscal Year 2002
                     First quarter....       2 5/16           1 1/2
                     Second quarter...       3 3/4            2
                     Third quarter....       3 3/4            1 7/16
                     Fourth quarter...       2 1/4            1 1/4


The last reported sale price of the Company's Common Stock on the Nasdaq
National Market on March 26, 2003 was $2.61 per share. As of March 27, 2003,
there were 897 record holders of the Company's Common Stock.

Merisel has never declared or paid any dividends on its Common Stock and does
not anticipate paying dividends on the Common Stock in the foreseeable future.


<PAGE>


Item 6. Selected Financial Data.
<TABLE>
<CAPTION>

                                                                      Years Ended December 31,
                                                    1998          1999          2000         2001          2002
                                                              (In thousands, except per share amounts)
Income Statement Data:(1, 2 and 3)
<S>                                             <C>            <C>           <C>            <C>            <C>
Net sales.....................................  $ 3,937,930    $4,231,396    $2,091,942     $336,053       $81,638
Cost of sales.................................    3,721,651     4,046,094     2,018,974      304,006        73,352
                                                -----------   -----------   -----------  -----------   -----------
Gross profit..................................      216,279       185,302        72,968       32,047         8,286
Selling, general & administrative expenses....      180,090       211,990       174,684       23,380         5,630
Restructuring charge..........................                      3,200        17,036         (102)          465
Impairment losses.............................                      3,800        52,833          288
Impairment losses related to Canada...........                                                28,111
Litigation related charge.....................                     12,000
Gain on debt extinguishment (5)...............                                  (49,003)      (2,872)
                                                -----------   -----------   -----------  -----------   -----------
Operating income (loss).......................       36,189       (45,688)     (122,582)     (16,758)        2,191
Interest expense (income), net................       17,125        17,849        10,920         (264)       (2,022)
Other expense (income), net...................       17,096        21,926         5,382          178          (169)
                                                -----------   -----------   -----------  -----------   -----------
Income (loss) before income taxes.............        1,968       (85,463)     (138,884)     (16,672)        4,382
Provision (benefit) for income taxes..........          417           939           620          445          (755)
                                                -----------   -----------   -----------  -----------   -----------
Income (loss) from operations.................        1,551       (86,402)     (139,504)     (17,117)        5,137
Discontinued operations:
Income (loss) from discontinued operations           16,959        25,234        18,539       (6,352)        1,973
Gain on sale of discontinued operations                                          25,178       36,250
                                                -----------   -----------   -----------  -----------   -----------
Net income (loss).............................      $18,510      $(61,168)     $(95,787)     $12,781        $7,110
                                                ===========   ===========   ===========  ===========   ===========
Preferred stock dividends.....................                                      677        1,292         1,399
                                                -----------   -----------   -----------  -----------   -----------
Net income (loss) available to common
stockholders..................................      $18,510      $(61,168)     $(96,464)     $11,489        $5,711
                                                ===========   ===========   ===========  ===========   ===========
Share Data (4):
Net income (loss) per diluted share...........  $      2.30   $     (7.62)  $    (12.01) $     1.44    $      0.74
Weighted average number of diluted
   Shares.....................................        8,049         8,028         8,031        7,989         7,735
Balance Sheet Data:
Working capital...............................  $   132,616   $   117,340   $     8,741  $    31,886   $    38,062
Total assets..................................      834,458       736,206       178,281       68,955        72,844
Long-term and subordinated debt...............      131,856       130,264        23,803
Total debt....................................      135,657       133,170        25,166
Stockholders' equity..........................      154,253        95,173        13,418       35,395        41,750

(1)  For the years 1998 through 2001, Merisel's fiscal year was the 52- or
     53-week period ending on the Saturday nearest December 31. For clarity of
     presentation throughout this Annual Report on Form 10-K, Merisel described
     these fiscal years presented as if the year ended on December 31. All
     fiscal years presented were 52 weeks in duration. Effective for the year
     ended December 31, 2002 the Company determined to change its fiscal year
     end to December 31. This change did not have a material effect on the
     results presented. Additionally, the selected financial data set forth
     above includes those balances and activities related to the Company's
     wholly owned subsidiary Merisel Canada through its disposal as of July 28,
     2001.

(2)  The Company has reclassified certain items in its 1998 financial statements
     to conform to the 1999, 2000, 2001 and 2002 presentations. These
     reclassifications principally consist of costs associated with the
     Company's flooring arrangements. The impact to the 1998 financial
     statements is to reduce general and administrative expenses by $4,461,000,
     to decrease net sales by $2,007,000 and to increase interest expense by
     $2,454,000.

(3)  The Company has reclassified its consolidated financial statements to
     exclude results related to the MOCA and Optisel business units, which are
     included in discontinued operations.
<PAGE>

(4)  Per share amounts and weighted average common shares outstanding
     calculations reflect the impact of a one-for-ten reverse stock split that
     was effective February 14, 2001.

The Company early adopted Statement of Financial Accounting Standard No. 145,
"Reporting Gains and Losses from Extinguishment of Debt" in 2002. The adoption
resulted in the retroactive reclassification of gain on debt extinguishment from
an extraordinary item to a component of operations.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.


Overview

The Company was founded in 1980 as Softsel Computer Products, Inc. and changed
its name to Merisel, Inc. in 1990 in connection with the acquisition of
Microamerica, Inc. ("Microamerica"). From 1996 through the first quarter of
1997, the Company engaged in the process of divesting of its operations outside
of the United States and Canada and its non-distribution operations, which
resulted in the Company's operations being focused exclusively in the United
States and Canada and consisting of three distinct business units: United States
distribution, which included software licensing, Canadian distribution and the
Merisel Open Computing Alliance ("MOCA"). Effective as of October 27, 2000, the
Company completed the sale of its MOCA business unit to Arrow Electronics, Inc.
("Arrow"). Additionally, on December 14, 2000, the Company announced that the
U.S. distribution business would focus solely on software licensing and that the
balance of the U.S. distribution business would be wound down. Effective as of
July 28, 2001, the Company completed the sale of its Canadian distribution
business ("Merisel Canada") to Synnex Information Technologies, Inc. ("Synnex").
On November 10, 2000, the Company acquired substantially all the e-services
assets of Value America, Inc. through the Company's newly formed subsidiary
Optisel with the intention of leveraging the Company's distribution and
logistics capabilities to operate a logistics and electronic services business.
As a result of economic conditions generally and with respect to
Internet-related businesses specifically and Optisel's lack of success in
generating business, the Company decided to discontinue operation of the Optisel
business during the fourth quarter of 2001. As a consequence of the foregoing
events, Merisel's only business today is its software licensing business. The
Company is, however, actively seeking and exploring acquisition and other
investment opportunities.

Discontinued Operations

Effective as of October 27, 2000, the Company completed the sale of its MOCA
business unit, a distributor of Sun Microsystems products, to Arrow. The stock
sale agreement pursuant to which the sale was made provided for a purchase price
of $110 million, subject to adjustments based on changes in working capital
reflected on the closing balance sheet of Merisel Open Computing Alliance, Inc.,
plus an additional amount up to $37.5 million payable by the end of March 2001
based upon MOCA's ability to retain existing and gain additional business (the
"Additional Payment"). The actual purchase price (excluding the Additional
Payment but including amounts received as deferred purchase price payments) was
approximately $179.8 million of which approximately $57.5 million was for
amounts outstanding under the Merisel asset securitization facility. Based on
the purchase price the Company realized a gain, net of costs associated with the
sale, of approximately $25.2 million. In March 2001 the Company received an
Additional Payment of $37.5 million which, after deducting certain obligations
relating to the payment, netted $36.3 million, which was recorded in the quarter
ended March 31, 2001 and resulted in a gain of $36.3 million.

Through Optisel, in November 2000 the Company acquired substantially all the
e-services assets of Value America, Inc. with the intention of leveraging the
Company's distribution and logistics capabilities to operate a logistics and
electronic services business. In connection with the sale of the MOCA business
to Arrow, the Company entered into a transition services agreement with Arrow
pursuant to which Optisel provided fee-based distribution and logistics services
and information technology services for MOCA through February 1, 2002. In
connection with the sale of Merisel Canada to Synnex, Merisel and Synnex entered
into a fee-based transition services agreement pursuant to which Optisel
provided information technology services to Merisel Canada through September 10,
2001. Optisel did not generate any significant revenue except under these two
transition services agreements. As a result of economic conditions generally and
with respect to Internet-related businesses specifically and Optisel's lack of
success in generating business, the Company discontinued operations of the
Optisel business during the fourth quarter of 2001.
<PAGE>

The Company has reclassified, as discontinued operations, its consolidated
financial statements to reflect the sale of the MOCA business and the
discontinuance of Optisel's operations and to segregate the revenues, direct
costs and expenses (excluding any allocated costs), assets and liabilities, and
cash flows of the MOCA and Optisel businesses. The net operating results and net
cash flows of these businesses have been reported as "Discontinued Operations"
in the accompanying consolidated financial statements.

Wind Down of U.S. Distribution Business

In December 2000 the Company determined that, primarily as a result of a
significant contraction in net sales and continuing substantial operating
losses, it would focus solely on software licensing and the balance of the U.S.
distribution business would be wound down. Although the wind-down was
substantially completed by the end of the first quarter of 2001, the Company has
substantial remaining obligations related to the U.S. distribution business,
primarily with respect to leases, vendors and employee severance. See Item 7.
"Liquidity and Capital Resources" below.

Sale of Merisel Canada

Effective as of July 28, 2001, the Company completed the sale to Synnex of
Merisel Canada, a distributor of computer hardware and software products. The
purchase price was CDN$30,000,000, of which CDN$1,000,000 is reflected as a
liability on the Company's balance sheet at December 31, 2002, pending
resolution of certain indemnification claims. In connection with this
transaction, in the quarter ended June 30, 2001 the Company recorded an
impairment charge of approximately $29,416,000 with respect to Merisel Canada
related to the excess book value over expected cash consideration less
transaction fees. During the fourth quarter of 2001 the closing balance sheet of
Merisel Canada was finalized and agreed to by the Company and Synnex. This
resulted in a payment of CDN$2,000,000 to the Company, which was recorded as a
$1,305,000 adjustment to the impairment charge previously recorded in the second
quarter of 2001.

Results of Operations

Including discontinued operations, the Company reported net income available to
common stockholders of $5,711,000 or $0.74 per share for 2002, compared to
$11,489,000, or $1.44 per share, for 2001, and a net loss available to common
stockholders of $96,464,000, or $12.01 net loss per share, for 2000. These
results include income from discontinued operations of $1,973,000 for 2002, a
loss from discontinued operations of $6,352,000 for 2001 and income from
discontinued operations of $18,539,000 for 2000. The discussion and analysis
below is limited to the Company's continuing operations and includes the U.S.
and Canadian distribution businesses.

Comparison of Fiscal Years Ended December 31, 2002 and December 31, 2001

Net Sales - Excluding net sales of $295,682,000 generated by the Canadian
distribution business in 2001, net sales increased 102.2% from $40,371,000 in
2001 to $81,638,000 for the year ended December 31, 2002. Net sales for the
Company's software licensing business increased 108.9% in 2002 to $81,638,000
from $39,085,000 in 2001.

Gross Profit - Excluding gross profit of $17,003,000 generated by the Canadian
distribution business in 2001, gross profit decreased 44.9% from $15,044,000 in
2001 to $8,286,000 in 2002. In the years ended December 31, 2001 and 2002, gross
profit reflects reductions of costs of sales of $12,450,000 and $4,816,000,
respectively, primarily as a result of favorable vendor settlements. Excluding
results of the Canadian distribution business and the reductions to cost of
sales, gross margins were 6.4% in 2001 compared to 4.3% in 2002. The decrease in
software licensing gross margins is attributable primarily to increased pricing
pressure.

Selling, General and Administrative - Excluding selling, general and
administrative expense of $15,041,000 incurred by the Canadian distribution
business in 2001, selling, general and administrative expenses decreased by
$2,709,000 or 32.5% from $8,339,000 for the year ended December 31, 2001 to
$5,630,000 for the year ended December 31, 2002. Selling, general and
administrative expenses for 2001 and 2002 include adjustments totaling
$11,110,000 and $2,519,000, respectively, related to favorable settlements or
collections experienced with vendors and customers of the Company's U.S.
hardware distribution business. Excluding these adjustments, and results of the
Canadian distribution business, selling, general and administrative expense
would have been $19,449,000 or 48.2% and $8,149,000 or 10.0% of net sales for
2001 and 2002, respectively. This decrease was caused primarily by cost
reductions that have been made during recent periods.
<PAGE>

Restructuring  - During  2002,  in  connection  with the  wind-down  of the U.S.
distribution  business  (excluding  software  licensing),  the Company  recorded
additional restructuring charges of $465,000. The additional charge is primarily
due to $265,000 of severance  costs and $200,000 of charges related to leases of
equipment and disposed facilities. During 2001, in connection with the wind-down
of the U.S.  distribution  business (excluding software licensing),  the Company
was able to  negotiate  favorable  settlements  related  to  certain  lease  and
contract  commitments.  As a result,  the Company was able to reduce the accrued
liability related to previously recorded  restructuring charges by $102,000. The
adjustment was primarily due to $569,000 of favorable  settlements  reached with
lessors of disposed facilities, net of $467,000 of additional charges related to
severance costs.

Impairment Losses - Effective as of July 28, 2001, the Company completed the
sale to Synnex of Merisel Canada. The purchase price was CDN$30,000,000, of
which CDN$1,000,000 was deposited in an escrow account pending resolution of
indemnification claims. As a result of the pending sale of Merisel Canada, the
Company reviewed the recoverability of its long-lived assets, including
identifiable intangible assets, to determine if there had been any impairment.
Based on this review, the Company recorded an impairment charge of $29,416,000
as of June 30, 2001. The impairment charge includes $13,000,000 for the SAP
operating system, $8,900,000 for the Company's foreign translation adjustment,
$3,600,000 for the unamortized goodwill attributable to Merisel Canada, and
$3,916,000 related to various other assets. During the fourth quarter of 2001,
the closing balance sheet of Merisel Canada was finalized and agreed to by the
Company and Synnex. This resulted in a payment of CDN$2,000,000 to the Company,
which is recorded as a $1,305,000 adjustment to the impairment charge previously
recorded in the second quarter of 2001.

Gain on Debt Extinguishment - In January 2001, the Company purchased $20,175,000
of its outstanding 12-1/2% Senior Notes due 2004 (the "12.5% Notes") for an
aggregate cost of $17,149,000, reducing the outstanding balance of the 12.5%
Notes to $3,628,000, which were redeemed at a total cost of $3,782,000 in
February 2001. As a result, the Company recognized a gain of approximately
$2,872,000 for the year ended December 31, 2001.

Operating Loss - As a result of the above items, the Company had a
loss from operations of $16,758,000 for the year ended December 31, 2001
compared to operating income of $2,191,000 for the year ended December 31, 2002.
Excluding the restructuring-related charges, the asset impairment charges and
the gain on debt extinguishment, the Company would have had operating income of
$8,667,000 in 2001 compared to $2,656,000 in 2002.

Interest Income - Interest income for the Company increased from $264,000 for
the year ended December 31, 2001 to $2,022,000 for the year ended December 31,
2002. The change primarily reflects the fact that the Company had no
indebtedness during 2002 as a result of the sale of Merisel Canada in July 2001,
which eliminated the interest associated with its revolving credit facility, and
interest income earned on invested cash balances and early pay discounts taken
in 2002. See "Gain on Debt Extinguishment" above.

Other Expense (Income) - Other expense for the Company decreased from an expense
of $178,000 for the year ended December 31, 2001 to income of $169,000 for the
year ended December 31, 2002. The decrease is primarily related to a $206,000
reduction in asset securitization fees related to the termination of the
Company's asset securitization facilities and the sale of fixed assets in 2002.

Income Taxes - The income tax provision decreased from $445,000 for the year
ended  December 31, 2001 to a benefit of $755,000 for 2002.  In both years,  the
income tax provision provides for only the minimum statutory tax requirements in
the various states and provinces in which the Company conducts business,  as the
Company  had  sufficient  net  operating  losses from prior years to offset U.S.
federal income taxes. In 2002 the provision, which consisted of $297,000 related
to minimum  statutory  tax  requirements,  is offset by income tax refunds  from
various  agencies  totaling  $530,000  and a release of $521,000  of  previously
recorded tax contingency  reserves  resulting from the resolution of certain tax
matters. A valuation  allowance has been fully established  against deferred tax
assets resulting from available net operating loss carry forwards. See "Notes to
Consolidated Financial Statements - Note 6 - Income Taxes".

Net Income - The Company's software licensing business is not currently
profitable because it is not generating sufficient revenue to cover selling,
general and administrative expenses and other costs required to operate the
business. The Company believes that, in order to compete effectively in software
licensing distribution, it must maintain high service levels, specialized sales
and marketing infrastructure, specific software licensing management expertise,
and state-of-the-art information technology capabilities that entail fixed costs
that cannot be further reduced significantly. The Company believes that it will
be able to achieve revenue levels that will allow its software licensing
business to be profitable within the next several quarters, provided that the
Company continues to be successful in adding new vendors and is able to maintain
the growth rates it has achieved over the last year. There is no assurance that
the Company will be successful in doing so.
<PAGE>

The Company reported net income available to common stockholders of $11,489,000,
or $1.44 per share, in 2001 compared to net income available to common
stockholders of $5,711,000, or $0.74 per share, in 2002.

Comparison of Fiscal Years Ended December 31, 2001 and December 31, 2000

Net Sales - The Company's net sales decreased 83.9% from $2,091,942,000 in 2000
to $336,053,000 for the year ended December 31, 2001. Net sales include
$660,216,000 and $295,682,000 generated by the Canadian distribution business
for the years ended 2000 and 2001, respectively. The decrease in net sales is
primarily related to the wind-down of the U.S. distribution business with the
exception of software licensing and the sale of the Canadian distribution
business.

Gross Profit - Gross profit decreased 56.1% from $72,968,000 in 2000 to
$32,047,000 in 2001, which primarily reflects the decline in sales in 2001.
Gross profit as a percentage of sales, or gross margin, increased from 3.5% in
2000 to 9.5% in 2001. Gross margins in the U.S. software licensing and Canadian
distribution businesses were 4.0% and 5.5%, respectively, for 2000, compared to
6.6% and 5.8%, respectively, for 2001. For the year ended December 31, 2000,
cost of sales includes charges totaling $22,145,000 to adjust inventory,
accounts receivable and vendor-related reserves to reflect the estimated
realizable value. In the year ended December 31, 2001, gross profit reflects a
reduction of costs of sales of $12,450,000, primarily as a result of favorable
vendor settlements. Excluding such charges and reduction, gross margin would
have been 4.6% in 2000 compared to 5.8% in 2001. This increase is primarily
related to the fact that the Canadian distribution business has historically
experienced higher margins than the U.S. distribution business. Additionally,
the loss of two large lower margin software licensing vendors caused overall
software licensing margins to be higher in 2001 than in 2000.

Selling, General and Administrative - Selling, general and administrative
expenses decreased by $151,304,000 or 86.6% from $174,684,000 for the year ended
December 31, 2000 to $23,380,000 for the year ended December 31, 2001. Selling,
general and administrative expenses as a percentage of sales decreased from 8.4%
of sales in 2000 to 7.0% for 2001. Selling, general and administrative expenses
for 2001 include adjustments totaling $11,110,000 related to favorable
settlements or collections experienced with vendors and customers of the
Company's U.S. hardware distribution business. Excluding these adjustments,
selling, general and administrative expense for 2001 would have been $34,490,000
or 10.3% of sales. This increase was caused primarily by the reduction of sales
volumes in relation to fixed costs and the fact that sales volumes fell faster
than operating costs could be reduced.

Restructuring - During 2001, in connection with the wind-down of the U.S.
distribution business (excluding software licensing), the Company was able to
negotiate favorable settlements related to certain lease and contract
commitments. As a result, the Company was able to reduce the accrued liability
related to previously recorded restructuring charges by $102,000. The adjustment
is primarily due to $569,000 of favorable settlements reached with lessors of
disposed facilities, net of $467,000 of additional charges related to severance
costs. During the third quarter of 2000, the Company announced a restructuring
plan that would significantly reduce its facilities and workforce. As a result,
the Company recorded a restructuring charge of $10,964,000 in the third quarter
of 2000. In the fourth quarter of 2000, as a result of its decision in December
2000 that the U.S. distribution business would focus solely on software
licensing and the balance of the U.S. distribution business would be wound down,
the Company recorded an additional restructuring charge of $6,672,000, of which
$600,000 relates to Optisel and has been reported as discontinued operations.

Impairment Losses - Effective as of July 28, 2001, the Company completed the
sale to Synnex of Merisel Canada. The purchase price was CDN$30,000,000, of
which CDN$1,000,000 was deposited in an escrow account pending resolution of
indemnification claims made during the 12 months after closing. The amount was
received in July 2002. As a result of the pending sale of Merisel Canada, the
Company reviewed the recoverability of its long-lived assets, including
identifiable intangible assets, to determine if there had been any impairment.
Based on this review, the Company recorded an impairment charge of $29,416,000
as of June 30, 2001. The impairment charge includes $13,000,000 for the SAP
operating system, $8,900,000 for the Company's foreign translation adjustment,
$3,600,000 for the unamortized goodwill attributable to Merisel Canada, and
$3,916,000 related to various other assets. During the fourth quarter of 2001,
the closing balance sheet of Merisel Canada was finalized and agreed to by the
Company and Synnex. This resulted in a payment of CDN$2,000,000 to the Company,
which is recorded as a $1,305,000 adjustment to the impairment charge previously
recorded in the second quarter of 2001.

During 2000, the Company recorded aggregate impairment losses of $52,833,000
consisting of a second quarter charge of $19,487,000 related to the impairment
of goodwill attributable to the U.S. distribution business, a $20,808,000 fourth

<PAGE>

quarter charge to adjust the carrying value of the Company's SAP operating
system to its fair value, and third and fourth quarter charges totaling
$12,538,000 for impairment of redundant and non-used assets primarily resulting
from the restructuring and wind-down of the U.S. distribution business.

Gain on Debt Extinguishment - In January 2001, the Company purchased $20,175,000
of its outstanding 12-1/2% Senior Notes due 2004 (the "12.5% Notes") for an
aggregate cost of $17,149,000, reducing the outstanding balance of the 12.5%
Notes to $3,628,000, which were redeemed at a total cost of $3,782,000 in
February 2001. As a result, the Company recognized a gain of approximately
$2,872,000 for the year ended December 31, 2001.

During 2000, the Company purchased $101,197,000 aggregate principal amount of
its 12.5% Notes for an aggregate cost of $50,982,000. As a result, the Company
recognized a gain on extinguishment of debt, net of unamortized debt issuance
costs, of approximately $49,003,000 in 2000.

Operating Loss - As a result of the above items, the Company had an operating
loss from operations of $122,582,000 for the year ended December 31, 2000
compared to an operating loss of $16,758,000 for the year ended December 31,
2001. Excluding the restructuring-related charges, the asset impairment charges
and the gain on debt extinguishment, the Company would have had an operating
loss of $101,716,000 in 2000 compared to operating income of $8,667,000 in 2001.

Interest Expense - Interest expense for the Company decreased from $10,920,000
for the year ended December 31, 2000 to income of $264,000 for the year ended
December 31, 2001, which reflected the fact that the Company had minimal
indebtedness outstanding during 2001 as a result of purchases by the Company of
outstanding debt securities and also the interest income earned on invested cash
balances. See "Gain on Debt Extinguishment" above.

Other Expense - Other expense for the Company decreased from $5,382,000 for the
year ended December 31, 2000 to $178,000 for the year ended December 31, 2001.
The decrease is primarily related to an $11,742,000 reduction in asset
securitization fees related to the termination of the Company's asset
securitization facilities. The decrease is offset by an $8,917,000 gain recorded
on the sale in September 2000 of the building in El Segundo, California owned by
the Company and a $1,538,000 gain recorded on the sale of the Company's
Marlborough, Massachusetts call center in January 2000. See "Notes to
Consolidated Financial Statements - Note 3 - Sale of Accounts Receivable."

Income Taxes - The income tax provision decreased from $620,000 for the year
ended December 31, 2000 to $445,000 for 2001. In both years, the income tax
provision provides for only the minimum statutory tax requirements in the
various states and provinces in which the Company conducts business, as the
Company had sufficient net operating losses from prior years to offset U.S.
federal income taxes. The Company has not recognized a tax provision benefit in
either year, having fully utilized its ability to carryback those losses and
obtain refunds of taxes paid in prior years. A valuation allowance has been
fully established against deferred tax assets resulting from available net
operating loss carry forwards. See "Notes to Consolidated Financial Statements -
Note 6 - Income Taxes".

Net Income (Loss) - The Company reported a net loss available to common
stockholders of $96,464,000, or $12.01 loss per share, in 2000 compared to net
income available to common stockholders of $11,489,000, or $1.44 per share, in
2001.

Variability of Quarterly Results and Seasonality

Historically, the industry in which the Company operates has experienced
variability in its net sales and operating margins on a quarterly basis and
expects these patterns to continue in the future with respect to its U.S.
software licensing business. 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 to existing products; (iii)
intensity of price competition among the Company and its competitors as
influenced by various factors; and (iv) the fact that virtually all sales in a
given quarter result from orders booked in that quarter. Due to the factors
noted above, as well as the dynamic qualities of the computer products
distribution industry, the Company's revenues and earnings may be subject to
material volatility, particularly on a quarterly basis, and the results for any
quarterly period may not be indicative of results for a full fiscal year.

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. As a result of this
pattern, the Company's working capital requirements in the fourth quarter have
typically been greater than other quarters.



<PAGE>


Liquidity and Capital Resources

Cash Flows Activity for the Year Ended December 31, 2002

Net cash used in operating activities during the year ended December 31, 2002
was $11,006,000. Cash used in operations primarily relates to the extinguishment
of liabilities and commitments associated with the wind-down of the U.S.
distribution business, excluding software licensing, and the growth in the
software licensing business through credit sales.

Net cash used in investing activities in 2002 consisted primarily of proceeds of
$667,000 from the sale of Merisel Canada, offset by $637,000 used to purchase
securities.

Net cash used in financing activities in 2002 was $516,000 which was used to
repurchase treasury stock.

Cash Flows Activity for the Year Ended December 31, 2001

Net cash used in operating activities during the year ended December 31, 2001
was $53,352,000. Cash used for operations primarily relates to the
extinguishment of liabilities and commitments associated with the wind down of
the U.S. distribution business (excluding software licensing), net of the effect
of cash flows related to Merisel Canada prior to its disposition.

Net cash provided by investing activities in 2001 consisted primarily of
proceeds of $36,250,000 from the sale of MOCA and $15,991,000 from the sale of
Merisel Canada.

Net cash provided by financing activities in 2001 was $13,342,000 and included
revolver borrowings of $35,962,000 associated with new credit facility entered
into by Merisel Canada upon the expiration of a receivables purchase agreement
(see "Notes to Consolidated Financial Statements - Note 3 - Sale of Accounts
Receivable"). Cash used in financing activities was $20,931,000 for the purchase
of the remainder of the 12.5% Notes.

Cash Flows Activity for the Year Ended December 31, 2000

Net cash used in operating activities during the year ended December 31, 2000
was $68,493,000. The primary use of cash is a decrease in accounts payable of
$371,382,000 and the net loss for the year, excluding the non-cash charges for
depreciation and bad debt provisions. The accounts payable decrease was
primarily the result of the termination of vendor relationships of the U.S.
distribution business. The decrease was offset by declines in inventory of
$300,157,000 and in accounts receivable of $77,613,000, both of which were also
primarily related to the wind-down of the U.S. distribution business excluding
software licensing.

Net cash provided by investing activities in 2000 was $135,128,000 and related
to cash proceeds of $14,123,000 from the sale of the Company's El Segundo
building in September 2000, cash proceeds of $1,765,000 from the sale of the
Marlborough, Massachusetts call center in January 2000 and cash proceeds of
$120,593,000 from the sale of MOCA in October 2000.

Net cash used for financing activities in 2000 was $42,730,000 and consisted
primarily of $50,982,000 used to purchase $101,197,000 aggregate principal of
the 12.5% Notes, which was offset by $15,000,000 of proceeds from the issuance
of Convertible Preferred. In addition, $6,807,000 was used to make repayments
under capitalized lease obligations and promissory notes, including $4,057,000
related to the El Segundo building sold in September 2000.

Debt Obligations, Financing Sources and Capital Expenditures

During 2000, the Company purchased $101,197,000 aggregate principal amount of
its 12.5% Notes for an aggregate cost of $50,982,000. As a result, the Company
recognized a gain, net of unamortized debt issuance costs, of approximately
$49,003,000 in 2000. In January 2001, the Company purchased an additional
$20,175,000 of the 12.5% Notes, reducing the outstanding balance of the 12.5%
Notes to $3,628,000, which were redeemed in February 2001. As a result, none of
the 12.5% Notes remain outstanding and the Company's obligations under the
indenture relating to the 12.5% Notes have been discharged.

In June 2000, an affiliate of Stonington Partners, Inc., which owns
approximately 65.6% of the Company's outstanding common stock, purchased 150,000
shares of Convertible Preferred issued by the Company for an aggregate purchase
price of $15 million. The Convertible Preferred provides for an 8% annual
dividend payable in additional shares of Convertible

<PAGE>


Preferred. Dividends are cumulative and will accrue from the original issue date
whether or not declared by the Board of Directors. Cumulative accrued dividends
of $1,969,000 and $3,367,000 were recorded at December 31, 2001 and 2002,
respectively.

The Company leases certain of its facilities and equipment under noncancelable
operating leases. Future minimum rental payments under leases that have initial
or remaining noncancelable lease terms in excess of one year are $221,000 in
2003 and $184,000 in 2004.

The Company has historically obtained a large portion of its working capital
financing under receivables securitization facilities and, to a lesser extent,
revolving credit facilities. With the sale of the MOCA business and Merisel
Canada and the wind down of the U.S. distribution business excluding software
licensing, the Company no longer has any of these financing facilities. Because
the software licensing business requires the maintenance of minimal levels of
inventory, the working capital requirements are much less than the Company's
historical needs for its distribution business and it is able to meet its
working capital needs without the need for any financing facility, in large part
because of its substantial cash balances. As revenues of the software licensing
business grow, the Company may seek to establish a working capital financing
facility to provide additional funding for that business and for acquisitions.

The Company has obligations relating to the wind-down of its U.S. distribution
business in addition to working capital requirements related to its software
licensing business. The Company expects that expenditures related to the
wind-down will consume some amount of the Company's cash balance at December 31,
2002.

The Company is involved in certain legal proceedings arising in the ordinary
course of business, none of which is expected to have a material impact on the
financial condition or results of operations of Merisel. The Company made
estimates of its potential exposures and has established reserves for potential
losses related to such proceedings. There can be no assurance that the Company's
reserves will fully cover any possible exposure.

In addition, over the last several years the Company has disposed of a number of
businesses, including all of its operations outside the United States, many of
which had obligations that had been guaranteed by the Company. In connection
with those dispositions, the Company sought either to have any guarantees
released or to be indemnified against any liabilities under guarantees. The
Company may not have identified all guarantees to be released and, in at least
one instance, the indemnification provided to the Company is no longer of any
value. Due to the nature of these indemnifications, the Company's exposure under
the agreements cannot be estimated and no amounts have been recorded for such
indemnities.

Management believes that, with its cash balances and anticipated cash balances
after wind-down related expenditures, which balances are substantial in relation
to the Company's working capital needs, as well as expected revenues and cash
flow from operations, it has sufficient liquidity for the foreseeable future. If
the Company were to use a significant amount of cash to fund one or more
acquisitions, the Company could have less liquidity to meet its working capital
needs.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires the appropriate application of certain accounting
policies, many of which require the Company to make estimates and assumptions
about future events and their impact on amounts reported in the Company's
consolidated financial statements and related notes. Since future events and
their impact cannot be determined with certainty, the actual results will
inevitably differ from the Company's estimates. Such differences could be
material to the consolidated financial statements.

The Company believes the application of its accounting policies, and the
estimates inherently required therein, are reasonable. These accounting policies
and estimates are constantly reevaluated, and adjustments are made when facts
and circumstances dictate a change.

The Company's accounting policies are more fully described in Item 8. "Financial
Statements and Supplementary Data". The Company has identified certain critical
accounting policies which are described below.

Revenue Recognition, Returns and Sales Incentives-- The Company derives revenues
from software licensing, product updates and customer support services and
training and consulting services purchased directly from third party vendors.
The Company records revenue from software licensing when there is persuasive
evidence of an arrangement, the fee is fixed and determinable, collection is
reasonably assured and delivery of the product has occurred (as prescribed by
Statement of Position

<PAGE>


("SOP") 97-2, "Software Revenue Recognition"). In arrangements that include
software licenses and professional services and/or product updates ("multiple
elements"), the Company allocates revenue based on vendor specific objective
evidence ("VSOE") of fair value of all elements, defers revenue for the
undelivered items and recognizes as revenue the fair value of the delivered
items based on VSOE of each element determined by the price for which the
element is sold separately.

The Company recognizes product updates and customer support services revenue
that they provide ratably over the term of the arrangement. Revenue from
training and consulting services is recognized when the services are completed.

The Company recognizes revenue on a gross basis as (a) the Company has sole
discretion in determining the price for which it sells software licenses and
services, (b) its suppliers impose no control or limitations on the Company's
pricing, (c) the Company assumes all credit risk associated with its customers,
(d) the Company often actively assists the customer in the selection of its
products and services and (e) the Company has the discretion to purchase the
products and services it offers from a variety of different suppliers and
distributors.

The Company frequently monitors its customers' financial condition and credit
worthiness and only sells products, licenses or services to customers where, at
the time of the sale, collection is reasonably assured. The Company, subject to
certain limitations including approval of its manufacturers/suppliers, may
permit its customers to return products and to exchange products or receive
credits against future purchases. The Company offers its customers several sales
incentive programs that, among other things, include funds available for
cooperative promotion of product sales. Customers earn credit under such
programs based upon the volume of purchases. The cost of these programs is
partially subsidized by marketing allowances provided by the Company's vendors.
A provision for estimated product returns and costs of customer incentive
programs is recorded concurrently as a component of net sales with the
recognition of revenue.

Concentration of Credit Risk - The Company performs ongoing credit evaluations
of its customers and maintains an allowance for potential credit losses;
however, credit risk with respect to trade accounts receivable is currently a
significant risk to the Company. At December 31, 2002, the Company's two largest
customers represented 41.7%, or $9,148,000, of the Company's total trade
receivables. The Company performs ongoing credit evaluations of its customers'
financial conditions and establishes reserves for credit losses accordingly
based on historical experience and the age of outstanding receivables.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Significant estimates include collectibility of accounts receivable, inventory,
accounts payable and accrued liabilities.

Restructuring and Wind Down Reserves - At December 31, 2002, the Company had
$18,157,000 and $12,408,000, respectively, of accounts payable and accrued
liabilities. Of the accounts payable amount recorded, $3,120,000 is related to
its U.S. distribution business (excluding software licensing), representing the
remaining liabilities and reserves against vendor-related receivables associated
with those former vendors with whom the Company has not yet reached a
settlement. Accrued liabilities primarily represent restructuring accruals,
liabilities associated with maintenance and other arrangements the Company has
incurred under contracts with systems and telecommunications vendors, sales tax
liabilities and other reserves. As part of its ongoing wind-down efforts, the
Company is negotiating with both inventory and other vendors and the actual
payments made by the Company under settlement agreements could differ from the
amounts accrued.

Item 7A. Quantitative and Qualitative Market Risk Disclosure

Investments

At December 31, 2002, the Company had cash investments of $42,645,000 held in
overnight, interest-bearing accounts invested through high-credit quality
financial institutions. Additionally, the Company had cash balances of
$4,150,000 maintained in various checking accounts at December 31, 2002.


<PAGE>


Item 8. Financial Statements and Supplementary Data.


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Merisel, Inc.:
El Segundo, California

We have audited the accompanying consolidated balance sheets of Merisel, Inc.
and subsidiaries as of December 31, 2001 and 2002, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2002. Our audits also
included the financial statement schedule listed in the index at Item 15(a)(2).
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Merisel, Inc. and subsidiaries at
December 31, 2001 and 2002, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, the financial statement schedule referred to
above, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

As discussed in Note 1, during the year ended December 31, 2000 the Company
decided to cease activities associated with virtually all of its United States
distribution business excluding software licensing. Additionally the Company
sold its MOCA business unit effective October 27, 2000. The gain on the sale and
results of operations of MOCA prior to the sale are included in discontinued
operations in the accompanying consolidated statements of operations. During the
year ended December 31, 2001, the Company discontinued its Optisel business. The
results of operations of Optisel are included in discontinued operations in the
accompanying consolidated statements of operations. Also, effective July 28,
2001 the Company completed the sale of Merisel Canada.



DELOITTE & TOUCHE LLP

Los Angeles, California
February 27, 2003




<PAGE>



                          MERISEL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

                                                                                              December 31,
                                                                                            2001         2002
                                        ASSETS

Current assets:
     Cash and cash equivalents.......................................................   $    55,578  $    46,795
     Accounts receivable (net of allowances of $703 and $1,185 at December...........         8,831       21,664
        31, 2001 and 2002, respectively).............................................
     Inventories....................................................................            117            3
     Prepaid expenses and other current assets.......................................           920          165
                                                                                        -----------  -------------
          Total current assets.......................................................        65,446       68,627
Property and equipment, net..........................................................         3,418          883
Other assets ........................................................................            91        3,334
                                                                                        -----------  -------------
     Total assets....................................................................   $    68,955  $    72,844
                                                                                        ===========  =============

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable................................................................   $    11,763  $    18,157
     Accrued liabilities.............................................................        21,797       12,408
                                                                                        -----------  -------------
          Total current liabilities..................................................        33,560       30,565

Long-term liabilities                                                                                        529


Stockholders' equity:
     Convertible preferred stock, $.01 par value; authorized 1,000,000 shares;
        150,000 shares issued and outstanding........................................        16,969       18,368
     Common stock, $.01 par value; authorized 150,000,000 shares; 8,030,844
     shares issued and 7,842,644 shares outstanding at December 31, 2001;
     8,026,375
     shares issued  and 7,619,095 shares outstanding at December 31, 2002............                         76
     Additional paid-in capital......................................................       281,343      279,814
     Accumulated deficit.............................................................      (262,669)    (255,559)
     Treasury stock..................................................................          (326)        (840)
     Accumulated other comprehensive loss............................................                       (109)
                                                                                        -----------  -------------
          Total stockholders' equity.................................................        35,395       41,750
                                                                                        -----------  -------------
     Total liabilities and stockholders' equity......................................   $    68,955  $    72,844
                                                                                        ===========  =============


                See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                         MERISEL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

                                                                          For the Years Ended December 31,
                                                                          2000           2001          2002
<S>                                                                  <C>            <C>            <C>
Net sales..........................................................  $  2,091,942   $    336,053   $     81,638
Cost of sales......................................................     2,018,974        304,006         73,352
                                                                     ------------   ------------   ------------
Gross profit.......................................................        72,968         32,047          8,286
Selling, general and administrative expenses.......................       174,684         23,380          5,630
Restructuring charges..............................................        17,036           (102)           465
Impairment losses..................................................        52,833            288
Impairment related to the sale of Merisel Canada...................                       28,111
Gain on extinguishment of debt.....................................       (49,003)        (2,872)
                                                                     ------------   ------------   ------------
Operating income (loss)............................................      (122,582)       (16,758)         2,191
Interest expense (income), net.....................................        10,920           (264)        (2,022)
Other expense (income), net........................................         5,382            178           (169)
                                                                     ------------   ------------   ------------
Income (loss) from operations before income taxes..................      (138,884)       (16,672)         4,382
Income tax provision (benefit).....................................           620            445           (755)
                                                                     ------------   ------------   ------------
Income (loss) from operations......................................      (139,504)       (17,117)         5,137
Discontinued operations:
   Income (loss) from discontinued operations......................        18,539         (6,352)         1,973
   Gain on sale of discontinued operations.........................        25,178         36,250
                                                                     ------------   ------------   ------------
Net income (loss)..................................................  $    (95,787)  $     12,781   $      7,110
                                                                     ============   ============   ============

Preferred stock dividends..........................................           677          1,292          1,399
                                                                     ------------   ------------   ------------
Net income (loss) available to common stockholders.................  $    (96,464)  $     11,489   $      5,711
                                                                     ============   ============   ============

Net income (loss) per share (basic and diluted):
Income (loss) from operations less preferred stock dividends.......  $     (17.46)   $     (2.30)   $       .48
Discontinued operations:
   Income (loss) from discontinued operations......................          2.31          (0.80)          0.26
   Gain on sale of discontinued operations.........................          3.14           4.54
                                                                     ------------   ------------   ------------
Net income (loss)..................................................  $    (12.01)   $      1.44    $      0.74
                                                                     ============   ============   ============

Weighted average number of shares (basic and diluted):                      8,031          7,989          7,735
                                                                     ============   ============   ============


           See accompanying notes to consolidated financial statements.

</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                         MERISEL, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (In thousands, except share data)


                                                                                         Accumulated
                                                               Additional                  Other
                                                                 Paid-in   Accumulated  Comprehensive  Treasury        Comprehensive
                         Preferred Stock     Common Stock       Capital      Deficit       Loss         Stock     Total    Income
                        -----------------    ------------      ---------   ----------    -----------   --------   ----- -----------
                          Shares    Amount    Shares     Amount
                         -------   -------   -------     ------
<S>                     <C>         <C>       <C>        <C>      <C>       <C>         <C>            <C>        <C>     <C>
Balance at December 31,1999                 8,027,881  $  80    $283,215  $  (179,663)$    (8,459)             $  95,173
   Sale of convertible
preferred Stock..........150,000   $15,000                                                                        15,000
Accrual of convertible
    Preferred stock
    dividend.............              677                          (677)
Exercise of stock options
    and other............                       3,024                 81                                              81
Comprehensive Income:
    Translation adjustment                                                                 (1,049)                (1,049)  $ (1,049)
    Net loss.............                                                     (95,787)                           (95,787)   (95,787)
                                                                                                                            --------
Total Comprehensive Loss                                                                                                   $(96,836)
                                                                                                                             =======
                         --------   ------  ---------  ------   --------    ----------    ---------     -------- --------
Balance at December
  31, 2000...............150,000    15,677  8,030,905     80     282,619     (275,450)     (9,508)                13,418
Accrual of convertible
    Preferred stock
    dividend.............            1,292                        (1,292)
Exercise of stock options
    and other............                         (61)                16                                              16
Treasury Stock                               (188,200)    (2)                                             $(326)    (328)
Comprehensive Income:
    Translation adjustment                                                                  9,508                  9,508  $   9,508
    Net income...........                                                      12,781                             12,781     12,781
                                                                                                                             -------
Total Comprehensive Income                                                                                                $  22,289
                                                                                                                             =======
                         --------   ------  ---------  ------   --------    ----------    ---------     -------- --------
Balance at December
  31, 2001...............150,000    16,969  7,842,644     78     281,343     (262,669)                     (326)  35,395
Accrual of convertible
    Preferred stock
    dividend.............            1,399                        (1,399)
Exercise of stock options
    and other............                       1,000               (130)                                           (130)
Treasury Stock                               (224,549)    (2)                                             $(514)    (516)
Comprehensive Income:
    Translation adjustment                                                                   (109)                  (109)  $   (109)
    Net income...........                                                       7,110                              7,110      7,110
                                                                                                                              ------
Total Comprehensive Income                                                                                                 $  7,001
                                                                                                                              ======
Balance at December     ========  ========  =========   ====   =========   ==========      =======       ======  ========
  31, 2002...............150,000   $18,368  7,619,095    $76    $279,814    $(255,559)      $(109)        $(840) $41,750
                        ========  ========  =========   ====   =========   ==========      =======       ======  ========

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


<PAGE>
<TABLE>
<CAPTION>


                         MERISEL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                                                  For the Years Ended December 31,
                                                                                -----------------------------------
                                                                                     2000        2001       2002
                                                                                -----------  ----------  ----------
<S>                                                                              <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)...........................................................  $  (95,787) $   12,781 $    7,110
    Less: income (loss) from discontinued operations, net.......................      18,539      (6,352)     1,973
    Less: gain on sale of MOCA..................................................     (25,178)    (36,250)
                                                                                -----------  ----------  ----------
    Income (loss) from operations...............................................    (139,504)    (17,117)     5,137
    Adjustments to reconcile income (loss)  from operations to net cash used in
operating activities:
        Gain on extinguishment of debt..........................................     (49,003)     (2,872)
        Depreciation and amortization...........................................      19,090       5,048         28
        Provision for doubtful accounts.........................................      38,991      (7,774)       931
        Impairment losses.......................................................      52,833         288
        Unrealized loss on deferred compensation asset..........................                               (109)
        Gain on sale of property and equipment..................................     (10,575)                  (168)
        Impairment related to the sale of Merisel Canada........................                  28,111
        Restricted stock units compensation expense (income)....................          22          13       (133)
        Changes in assets and liabilities:
            Accounts receivable.................................................      77,613     (25,849)   (13,764)
            Inventories.........................................................     300,157      17,417        114
            Prepaid expenses and other current assets...........................       5,531       5,973        (47)
            Accounts payable....................................................    (371,382)    (39,340)     6,394
            Accrued liabilities.................................................       7,734     (17,250)    (9,389)
                                                                                -----------  ----------  ----------
                Net cash  used in operating activities..........................     (68,493)    (53,352)   (11,006)
                                                                                -----------  ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment..........................................      (1,853)       (114)
    Proceeds from sale of Merisel Canada........................................                  15,991        667
    Proceeds from sale of MOCA..................................................     120,593      36,250
    Purchase of securities......................................................                               (637)
    Transaction costs on sale of building.......................................                               (234)
    Proceeds from sale of property and equipment................................      16,388         820        172
                                                                                -----------  ----------  ----------
               Net cash provided by (used in) investing activities..............     135,128      52,947        (32)
                                                                                -----------  ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings under revolving line of credit...................................      40,000      35,962
    Repayments under revolving line of credit...................................     (40,000)
    Proceeds from issuance of convertible preferred stock.......................      15,000
    Proceeds from issuance of common stock and purchase of treasury stock, net..          59        (326)      (516)
    Purchase of bonds...........................................................     (50,982)    (20,931)
    Repayments under other financing arrangements...............................      (6,807)     (1,363)
                                                                                -----------  ----------  ----------
                Net cash provided by (used in) financing activities.............     (42,730)     13,342       (516)
                                                                                -----------  ----------  ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH.........................................         641         (75)
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS..........................     (35,238)     (4,149)     2,771
                                                                                -----------  ----------  ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............................     (10,692)      8,713     (8,783)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR....................................      57,557      46,865     55,578
                                                                                -----------  ----------  ----------
CASH AND CASH EQUIVALENTS, END OF  PERIOD YEAR..................................  $   46,865  $   55,578 $   46,795
                                                                                ===========  ==========  ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid (received) during the year for:
    Interest....................................................................  $   15,064  $    1,911
    Income taxes................................................................      (1,751)      5,787       (234)
    Noncash investing and financing activities:
    Sale of property for note receivable........................................         500                  2,975
    Preferred dividend accrued..................................................         677       1,292      1,399

Effective July 28, 2001, the company sold Merisel Canada to Synnex Technologies, Inc. ("Synnex"). In connection
with the sale, the following assets and liabilities were purchased by Synnex:

    Cash received in the sale of Merisel Canada, net of cash sold                                $16,662
    Total assets sold to Synnex                                                                 (102,800)
    Total liabilities sold to Synnex                                                              86,809

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


<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 2001 and 2002

1. Description of Business and Basis of Presentation

General-- The Company was founded in 1980 as Softsel Computer Products, Inc. and
changed its name to Merisel, Inc. in 1990 in connection with the acquisition of
Microamerica, Inc. ("Microamerica"). From 1996 through the first quarter of
1997, the Company engaged in the process of divesting of its operations outside
of the United States and Canada and its non-distribution operations, which
resulted in the Company's operations being focused exclusively in the United
States and Canada and consisting of three distinct business units: United States
distribution, Canadian distribution and the Merisel Open Computing Alliance
("MOCA"). Effective as of October 27, 2000, the Company completed the sale of
its MOCA business unit to Arrow Electronics, Inc. ("Arrow"). Additionally, on
December 14, 2000, the Company announced that the U.S. distribution business
would focus solely on software licensing and that the balance of the U.S.
distribution business would be wound down. Effective as of July 28, 2001, the
Company completed the sale of its Canadian distribution business ("Merisel
Canada") to Synnex Information Technologies, Inc. ("Synnex"). On November 10,
2000, the Company acquired substantially all the e-services assets of Value
America, Inc. through the Company's newly formed subsidiary Optisel with the
intention of leveraging the Company's distribution and logistics capabilities to
operate a logistics and electronic services business. The acquisition was
accounted for as a purchase and the purchase price, including assumption of
certain liabilities, was $2,375,000. As a result of economic conditions
generally and with respect to Internet-related businesses specifically and
Optisel's lack of success in generating business, the Company decided to
discontinue operation of the Optisel business during the fourth quarter of 2001.
As a consequence of the foregoing events, Merisel's only business today is its
software licensing business. The Company is, however, actively seeking and
exploring acquisition and other investment opportunities.

The consolidated financial statements retroactively reflect the effect of the
one-for-ten reverse stock split, which was effective February 14, 2001.
Accordingly, all disclosures involving the number of shares of Merisel common
stock outstanding, issued or to be issued, and all per share amounts,
retroactively reflect the impact of the reverse stock split.

Consolidation Policy - The consolidated financial statements include the
accounts of Merisel Americas, Inc., Merisel Properties, Inc. and Merisel
Corporate. All material intercompany accounts and transactions have been
eliminated in consolidation.

Management's Plan--As stated previously, on December 14, 2000, the Company
announced its decision to wind down virtually all of its U.S. distribution
business, excluding software licensing. As a result of that decision, the
decision to discontinue Optisel and the sales of MOCA and Merisel Canada, the
Company's current operations consist of its software licensing distribution
business. Primarily as a result of wind-down related gains of $7,335,000
recognized in 2002, the Company had net income available to common stockholders
of $5,711,000, after preferred stock dividends of $1,399,000, which decreased
its accumulated deficit to $255,559,000 at December 31, 2002.

The Company has developed an operating plan for 2003 that focuses upon growing
its software licensing distribution business and achieving profitability for
that business, maximizing cash in winding down its U.S. distribution business,
and seeking acquisition opportunities. At December 31, 2002, the Company had
approximately $46,795,000 of cash and cash equivalents on hand. Management
believes that, with its cash balances and anticipated cash balances after
wind-down related expenditures, which balances are substantial in relation to
the Company's working capital needs, as well as expected revenues and cash flow
from operations, it has sufficient liquidity for the foreseeable future. If the
Company were to use a significant amount of cash to fund one or more
acquisitions, the Company could have less liquidity to meet its working capital
needs.

2.       Summary of Significant Accounting Policies

Risks and Uncertainties--In  2002, 93.6% of the Company's software licensing net
sales were  derived  from  products  supplied  by two  vendors,  with one vendor
accounting for 79.8% of net sales. The Company was notified during 2002 that one
of its top two  vendors,  that  accounted  for  13.8%  of 2002  net  sales,  was
terminating its distribution agreement with the Company. The

<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

termination of the Company's distribution agreement with its remaining key
vendor, or a material change in the terms of the distribution agreement,
including a decrease in rebates, could have a material adverse effect on the
Company. For 2002, 10 customers accounted for approximately 64.8% of the
Company's U.S. software licensing net sales, with one customer accounting for
approximately 19.8% of net sales. The Company is focused on increasing its
customer base and decreasing the percentage of revenues and receivables
concentrated with a small number of customers. Until that has been accomplished,
the loss of one or more of the Company's major customers could have a material
adverse effect on the Company. Substantially all of the Company's software
licensing net sales are financed by the Company. As a result, the Company's
business could be adversely affected in the event of the deterioration of the
financial condition of one or more of its customers, particularly one of the
Company's larger customers, resulting in the customer's inability to pay amounts
owed to the Company. This risk would be increased in the event of a general
economic downturn affecting a large number of the Company's customers.

Concentration of Credit Risk-- Financial instruments that subject the Company to
credit risk consist primarily of cash equivalents and trade accounts receivable.
The Company invests its excess cash with high-quality financial institutions and
actively evaluates the creditworthiness of the financial institutions with which
it conducts business. The Company performs ongoing credit evaluations of its
customers and maintains an allowance for potential credit losses; however,
credit risk with respect to trade accounts receivable is currently a significant
risk to the Company. At December 31, 2002, the Company's two largest customers
combined represented 41.7%, or $9,148,000, of the Company's total trade
receivables. The Company believes it has established an adequate reserve against
the December 31, 2002 accounts receivable balance.

Use of Estimates--The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. Significant estimates include the allowance for
doubtful accounts and certain amounts related to restructuring and wind-down
activities recorded in accounts payable and accrued liabilities.

Fiscal Periods-- Effective December 31, 2002, the Company's fiscal year ends on
December 31 and its fiscal quarters end on March 31, June 30, September 30 and
December 31. Prior to December 31, 2002, the Company's fiscal year was the
52-week period ending on the Saturday nearest to December 31 and its fiscal
quarters were the 13-week periods ending on the Saturday nearest to March 31,
June 30, September 30 and December 31. For clarity of presentation of prior
years, the Company has described fiscal years presented as if the years ended on
December 31 and fiscal quarters presented as if the quarters ended on March 31,
June 30, September 30 and December 31.

Cash and Cash Equivalents--The Company considers all highly liquid investments
purchased with initial maturities of three months or less to be cash
equivalents. The Company invests excess cash in interest-bearing accounts.
Interest income earned on cash balances for 2000, 2001 and 2002 was $2,149,000,
$1,578,000 and $829,000, respectively.

Inventories--Inventories are valued at the lower of cost or market. Cost is
determined using the average cost method.

Property and Depreciation--Property and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, generally three to ten
years. Leasehold improvements are amortized over the shorter of the life of the
lease or the improvement.

Investments - As of December 31, 2002, other assets include approximately
$529,000 of equity securities, classified as available-for-sale. These
securities are carried at fair value with any unrealized gain or loss recorded
as other comprehensive income (loss).

Impairment of Long-Lived Assets--The Company reviews the recoverability of
long-lived assets to determine if there has been any impairment. This assessment
is performed based on the estimated undiscounted future cash flows from
operating activities compared with the carrying value of the related asset. If
the undiscounted future cash flows are less than the carrying value, an

<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

impairment loss is recognized, measured by the difference between the carrying
value and the estimated fair value of the assets (see Note 8 - "Impairment
Losses").

Term discounts - Interest income includes term discounts earned from certain
vendors for early payment of accounts payable in the amount of approximately $0,
$9,000 and $1,040,000 for the years ended December 31, 2000, 2001 and 2002,
respectively.

Income Taxes--Income taxes are accounted for under an asset and liability
approach that requires the recognition of deferred income tax assets and
liabilities for the expected future consequences of events that have been
recognized in the Company's consolidated financial statements and income tax
returns. Management provides a valuation allowance for deferred income tax
assets when it is considered more likely than not that all or a portion of such
deferred income tax assets will not be realized.

Fair Values of Financial Instruments--The fair values of financial instruments,
which include cash and cash equivalents and accounts receivable approximate
their carrying value because of their short-term nature.

Foreign Currency Translation--Assets and liabilities of Merisel Canada are
translated into United States dollars at the exchange rate in effect at the
close of the period. Revenues and expenses are translated at the average
exchange rate during the period. The aggregate effect of translating the
financial statements at the above rates is included in a separate component of
stockholders' equity entitled accumulated other comprehensive loss. As
previously stated, effective July 28, 2001, the Company completed the sale of
Merisel Canada. In the second quarter of 2001, the Company recorded an
impairment charge equal to the entire translation adjustment in anticipation of
the sale of Merisel Canada.

Foreign Exchange Instruments--At December 31, 2002, the Company has no foreign
exchange instruments outstanding. Prior to the sale of Merisel Canada, the
Company's use of derivatives was limited to the purchase of spot and forward
foreign currency exchange contracts in order to minimize foreign exchange
transaction gains and losses. The Company purchased forward Canadian and U.S.
dollar contracts to hedge short-term advances to Merisel Canada and to hedge
commitments to acquire inventory for sale and did not use the contracts for
trading purposes. In 2000 and 2001 the Company recorded net foreign currency
transaction losses of $946,000 and $229,000, respectively. These amounts are
included in other expense in the accompanying consolidated statements of
operations.

Revenue Recognition, Returns and Sales Incentives-- The Company derives revenues
from software licensing, product updates and customer support services and
training and consulting services purchased directly from third party vendors.
The Company records revenue from software licensing when there is persuasive
evidence of an arrangement, the fee is fixed and determinable, collection is
reasonably assured and delivery of the product has occurred (as prescribed by
Statement of Position ("SOP") 97-2, "Software Revenue Recognition"). In
arrangements that include software licenses and professional services and/or
product updates ("multiple elements"), the Company allocates revenue based on
vendor specific objective evidence ("VSOE") of fair value of all elements,
defers revenue for the undelivered items and recognizes as revenue the fair
value of the delivered items based on VSOE of each element determined by the
price for which the element is sold separately.

The Company recognizes revenue related to product updates and customer support
services that they provide ratably over the term of the arrangement. Revenue
from training and consulting services is recognized when the services are
completed.

The Company recognizes revenue on a gross basis as (a) the Company has sole
discretion in determining the price for which it sells software licenses and
services, (b) its suppliers impose no control or limitations on the Company's
pricing, (c) the Company assumes all credit risk associated with its customers,
(d) the Company often actively assists the customer in the selection of its
products and services and (e) the Company has the discretion to purchase the
products and services it offers from a variety of different suppliers and
distributors.

The Company frequently monitors its customers' financial condition and credit
worthiness and only sells products, licenses or services to customers where, at
the time of the sale, collection is reasonably assured. The Company, subject to
certain limitations including approval of its manufacturers/suppliers, may
permit its customers to return products and to exchange products or receive
credits against future purchases. The Company offers its customers several sales
incentive programs that,

<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

among other things, include funds available for cooperative promotion of product
sales. Customers earn credit under such programs based upon the volume of
purchases. The cost of these programs is partially subsidized by marketing
allowances provided by the Company's vendors. A provision for estimated product
returns and costs of customer incentive programs is recorded concurrently as a
component of net sales with the recognition of revenue.

Accounting for Stock-Based Compensation - Statement of Financial Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as
amended by SFAS No. 148, requires companies to estimate employee stock
compensation expense based on the fair value method of accounting. However, the
statement allows the alternative of continued use of the intrinsic value method
described in Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees," if pro forma disclosure of fair value amounts is
provided. The Company has elected the alternative of continued use of APB
Opinion No. 25.

Had compensation cost for the Company's stock option plans been determined based
on their fair value at the grant date for options granted in 2000, 2001 and 2002
consistent with the provisions of SFAS No. 123, the Company's net (loss) income
and net (loss) income per share would have been adjusted to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>

                                                                        (In thousands, except per share
                                                                                   amounts)
                                                                         2000         2001         2002
                                                                     ------------- ------------ -----------
<S>                                                                     <C>            <C>          <C>
   Net income (loss) - As Reported                                      $(95,787)      $12,781      $7,110
   Deduct: Total stock-based employee compensation expense
   determined under fair value based method for all awards                 $(107)        $(105)       $(32)
                                                                     ------------- ------------ -----------
   Net income (loss) - Pro Forma                                        $(95,894)      $12,676      $7,078

   Net income (loss) Per Share (Basic & Diluted)
   As Reported                                                           $(12.01)        $1.44       $0.74
   Pro Forma                                                             $(12.02)        $1.42       $0.73
</TABLE>

Reclassifications--Certain reclassifications were made to prior year statements
to conform to the current year presentation.

New Accounting Pronouncements-- In June 2001, the Financial Accounting Standards
Board ("FASB") issued SFAS No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangibles Assets." SFAS No. 141 requires the purchase
method of accounting for business combinations initiated after June 30, 2001 and
eliminates the pooling-of-interests method. SFAS No. 142 changes the accounting
for goodwill from an amortization method to an impairment method-only approach.
The Company adopted SFAS No. 142 effective January 1, 2002. The adoption of SFAS
Nos. 141 and 142 did not have an impact on the Company's consolidated financial
statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of." SFAS No. 144 retained substantially all of the requirements of
SFAS No. 121 while resolving certain implementation issues. The Company adopted
SFAS No. 144 effective January 1, 2002. The adoption of SFAS No. 144 did not
have a material impact on the Company's consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, which rescinds SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," and also amends other
existing authoritative pronouncements to make various technical corrections,
clarify meanings, or describe their applicability under changed conditions. A
principal effect will be the prospective characterization of gains and losses
from debt extinguishments used as part of an entity's risk management strategy.
Under SFAS No. 4, all gains and losses from early extinguishment of debt were
required to be aggregated and, if material, classified as an extraordinary item,
net of related income tax effect. Under SFAS No. 145, gains and losses from
extinguishment of debt are not classified as extraordinary items unless they
meet much more narrow criteria in APB Opinion No. 30. SFAS No. 145 may be
adopted early, but is otherwise effective for fiscal years beginning after May
15, 2002, and must be adopted with retroactive effect. The Company elected to
adopt the provisions of SFAS No. 145 early, which resulted in the
reclassification

<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

of the amount related to early extinguishment of debt previously recorded as an
extraordinary item to a component of operating income (loss) in the accompanying
consolidated statements of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 requires that costs associated
with an exit or disposal activity be recognized when incurred as opposed to an
entity's commitment to an exit plan as previously allowed. The provisions of
SFAS No. 146 are effective for exit or disposal activities that are initiated
after December 31, 2002, with early application encouraged.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." This statement amends SFAS No. 123,
to provide alternative methods of transition for an entity that voluntarily
changes to the fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure about the effects on reported net income of an
entity's accounting policy decisions with respect to stock-based employee
compensation. This statement also amends APB Opinion No. 28, "Interim Financial
Reporting" to require disclosure about those effects in interim financial
statements. SFAS No. 148 is effective for financial statements for fiscal years
ending after December 15, 2002. The Company has elected not to change to the
fair value based method of accounting for stock-based compensation at this time.

3. Sale of Accounts Receivable

Under securitization facilities, the Company and its subsidiaries have sold
trade receivables to financial institutions. All of the facilities were expired
or terminated in 2000 and 2001 and no amounts were outstanding as of December
31, 2001. Under the securitization facilities, the receivables were sold at face
value with payment of a portion of the purchase price being deferred. Fees
incurred in connection with the sale of accounts receivable under these
agreements for the years ended December 31, 2000 and 2001 were $11,948,000 and
$206,000, respectively, and are recorded as a component of other expense in the
accompanying consolidated statements of operations.

4. Property and Equipment

Property and equipment consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                                           Estimated
                                                          Useful Life
                                                          (in Years)         December 31,
                                                                      ----------------------------
                                                                         2001            2002
                                                                      ------------   -------------
<S>                                                                   <C>            <C>
     Land...............................................              $     883      $     883
     Buildings..........................................      20          3,043
     Equipment and computer hardware and software.......    3 to 7           95             95
     Furniture and fixtures.............................    3 to 5           27             27
                                                                      ------------   -------------
     Total..............................................                  4,048          1,005
     Less accumulated depreciation and amortization.....                    630            122
                                                                      ------------   -------------
     Property and equipment, net........................                 $3,418           $883
                                                                      ============   =============
</TABLE>

In May 2002 the Company completed the sale of an office building in Cary, North
Carolina. The $3,000,000 purchase price was paid $25,000 in cash and the
remainder in a promissory note due May 20, 2004 or earlier in certain
circumstances. The note bears interest at the prime rate plus 2.25% payable
monthly and is secured by the property. The prime rate was 4.25% at December 31,
2002. The Company recorded the promissory note at an amount of $2,714,000 which
approximates the carrying value of the property. The Company recognized no gain
or loss on the sale of the property, net of actual disposal costs. In connection
with the sale, the Company agreed to lend the purchaser up to an additional
$1,000,000, at terms similar to the note described above, to fund improvements
to the property after the purchaser has funded $1,000,000 in initial
improvements. As of December 31, 2002, no additional amounts have been loaned.


<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following at December 31
(in thousands):
<TABLE>
<CAPTION>

                                                                    2001            2002
                                                                 -----------     -----------
Accounts payable:

<S>                                                                 <C>            <C>
      Trade payables                                                $ 5,335        $ 15,037
      Wind-down payables related to discontinued vendors              6,428           3,120
                                                                 -----------     -----------
        Total accounts payable                                     $ 11,763        $ 18,157
                                                                 ===========     ===========

Accrued liabilities:
      Restructuring accruals (see Note 7)                           $ 5,360          $2,882
      Compensation and other benefit accruals                         2,890           1,819
      State and local sales taxes and other taxes                     2,314           1,724
      Customer credits                                                1,694           1,467
      Software license and IT-related accruals                        3,113             478
      Optisel accruals                                                2,635             418
      Other                                                           3,791           3,620
                                                                 -----------     -----------

        Total accrued liabilities                                  $ 21,797        $ 12,408
                                                                 ===========     ===========
</TABLE>

6. Income Taxes

The components of income (loss) from operations before income taxes consisted of
the following (in thousands):
<TABLE>
<CAPTION>

                                                        For the Years Ended December 31,
                                                   -----------------------------------------
                                                       2000          2001           2002
                                                   ------------  ------------  --------------
<S>                                                <C>           <C>           <C>
     Domestic...............................       $   (119,017) $    (16,731) $      4,382
     Foreign................................            (19,867)           59
                                                   ------------  ------------  --------------
     Total..................................       $   (138,884) $    (16,672) $      4,382
                                                   ============  ============  ==============

The provision (benefit) for income taxes consisted of the following (in
thousands):

                                                        For the Years Ended December 31,
                                                   -----------------------------------------
                                                         2000          2001         2002
                                                   ------------  ------------  --------------
     Current:
          Federal................................                               $    (1,273)
          State..................................            302           148          518
          Foreign................................            284           297
                                                   ------------  ------------  --------------
          Total Current..........................            586           445         (755)
                                                   ------------  ------------  --------------
     Deferred:
          Foreign................................             34
                                                   ------------  ------------  --------------
          Total deferred.........................             34
                                                   ------------  ------------  --------------
          Total provision........................    $       620   $       445  $      (755)
                                                   ============  ============  ==============

</TABLE>




<PAGE>


                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Deferred income tax assets and liabilities were comprised of the following (in
thousands):
<TABLE>
<CAPTION>

                                                                        December 31,
                                                                     2001          2002
                                                                 -----------   ------------
<S>                                                              <C>           <C>
          Net operating loss..........................           $    96,059   $    97,797
          Expense accruals............................                11,252         8,343
          Property....................................                 1,600
                                                                 -----------   ------------
                                                                     108,911       106,140
          Valuation allowances........................              (108,911)     (106,140)
                                                                 -----------   ------------
               Total..................................           $         -   $        -
                                                                 ===========   ============
     Net deferred tax asset...........................           $         -   $        -
                                                                 ===========   ============
</TABLE>

The major elements contributing to the difference between the federal statutory
tax rate and the effective tax rate on income from continuing operations are as
follows:
<TABLE>
<CAPTION>
                                                                              For the Years Ended
                                                                                  December 31,
                                                                  ---------------------------------------------
                                                                      2000             2001            2002
                                                                  ------------     -----------       ---------
<S>                                                                   <C>             <C>               <C>
     Statutory rate..............................................     (35.0)%         (35.0)%           35.0%
     Change in valuation allowance...............................      34.5            25.2            (47.5)
     State income taxes, less effect of federal deduction........       0.6             0.5             (4.4)
     Goodwill amortization.......................................       0.3
     Foreign rate differential...................................                       1.5
     Capital asset basis differential............................                      (7.7)            (4.7)
     Expiration and limitation of NOL's..........................                      12.8
     Other.......................................................      (0.1)            5.0              4.4
                                                                   ------------    -------------    -----------
     Effective tax rate..........................................       0.3%            2.3%           (17.2)%
                                                                   ============    =============    ===========
</TABLE>

In 1997 the Company experienced an ownership change for Federal income tax
purposes, resulting in an annual limitation on the Company's ability to utilize
its net operating loss carryforwards to offset future taxable income. The annual
limitation was determined by multiplying the value of the Company's equity
before the change by the long-term tax exempt rate as defined by the Internal
Revenue Service. The Company has adjusted its deferred tax asset to reflect the
estimated limitation. At December 31, 2002, the Company had available U.S.
Federal net operating loss carryforwards of $256,226,000, after adjusting for
the estimated limitation, which expire at various dates beginning December 31,
2012. As of December 31, 2002, $80,286,000 of the net operating loss
carryforwards is restricted as a result of the ownership change and the
remaining amount of $175,940,000 is not restricted. The restricted net operating
loss is subject to an annual limitation of $7,476,000. The Company has certain
state net operating losses, which, due to limitations, are not expected to be
fully utilized and may expire. The Company has recorded a full valuation
allowance against the net deferred income tax assets at December 31, 2001 and
2002 based upon the Company's estimate of the future realization of deferred
income tax assets.

7. Restructuring Charges

During 2002 the Company recorded additional restructuring charges in relation to
the wind-down of its U.S. distribution business (excluding software licensing)
of $465,000. The adjustment is primarily due to $200,000 of additional charges
related to facility lessors and $265,000 of additional charges related to
severance costs associated with four employees.

During 2001 the Company adjusted the restructuring charges previously taken in
relation to the wind-down of its U.S. distribution business (excluding software
licensing) by $102,000. The adjustment is primarily due to $569,000 of favorable
settlements reached with lessors of disposed facilities, net of $467,000 of
additional charges related to severance costs associated with six employees.



<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

On December 14, 2000, the Company announced its plan to wind down virtually all
of its U.S. distribution business. Pursuant to this plan, the Company recorded a
restructuring charge of $6,672,000, of which $600,000 relates to Optisel and has
been reported as discontinued operations. Approximately $921,000 of the charge
consists of severance costs and $5,151,000 relates to lease termination and
facility closures for all but two of the Company's United States locations.

During the third quarter of 2000, the Company announced plans that it would
reduce its workforce by approximately 1,000 full-time positions. As a result,
the Company recorded a restructuring charge of $10,964,000. Approximately
$7,098,000 of the charge consists of termination benefits including severance
pay and outplacement services to be provided to those employees that were
involuntarily affected by the reduction in workforce. The charge also reflects
approximately $3,866,000 of lease termination fees related to the planned
closure of certain warehouses and offices.

As of December 31, 2002, $2,882,000 of total restructuring costs had not been
paid and was included in accrued liabilities in the accompanying consolidated
balance sheets. Future payments of these liabilities are expected to be
approximately $1,767,000 and $1,115,000 in 2003 and 2004, respectively. The
following tables display the activity and balances of the restructuring reserve
account from December 31, 1999 to December 31, 2002 (in thousands):
<TABLE>
<CAPTION>

                                  December 31,
                                      2001              Net                           December 31, 2002
                                    Balance       Charges (Benefit)      Payments           Balance
                                ----------------- ------------------- ---------------- -------------------
Type of cost:
<S>                                 <C>                 <C>             <C>                   <C>
Severance and related costs         $   1,176           $ 265           $(1,158)              $ 283
Facility, lease and other               4,184             200            (1,785)              2,599
                                ----------------- ------------------- ---------------- -------------------
Total                               $   5,360           $ 465           $(2,943)             $2,882
                                ================= =================== ================ ===================

                                  December 31,
                                      2000               Net                           December 31, 2001
                                    Balance       Charges (Benefit)      Payments           Balance
                                ----------------- ------------------- ---------------- -------------------
Type of cost:
Severance and related costs         $   5,443           $ 467           $(4,734)             $1,176
Facility, lease and other               7,929            (569)           (3,176)              4,184
                                ----------------- ------------------- ---------------- -------------------
Total                                $ 13,372          $ (102)          $(7,910)             $5,360
                                ================= =================== ================ ===================

                                  December 31,
                                      1999              Net                            December 31, 2000
                                    Balance           Charges            Payments           Balance
                                ----------------- ------------------- ---------------- -------------------
Type of cost:
Severance and related costs         $   2,740          $8,019           $(5,316)             $5,443
Facility, lease and other                 460           9,017            (1,548)              7,929
                                ----------------- ------------------- ---------------- -------------------
Total                               $   3,200         $17,036           $(6,864)            $13,372
                                ================= =================== ================ ===================

</TABLE>



<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. Impairment Losses

Effective as of July 28, 2001, the Company completed the sale to Synnex of
Merisel Canada. The purchase price was CDN$30,000,000, of which CDN$1,000,000
was deposited in an escrow account pending resolution of indemnification claims
made during the 12 months after closing. The amount was received in July 2002.
As a result of the pending sale of Merisel Canada, the Company reviewed the
recoverability of its long-lived assets, including identifiable intangible
assets, to determine if there had been any impairment. Based on this review, the
Company recorded an impairment charge of $29,416,000 as of June 30, 2001. The
impairment charge includes $13,000,000 for the SAP operating system, $8,900,000
for the Company's foreign translation adjustment, $3,600,000 for the unamortized
goodwill attributable to Merisel Canada, and $3,916,000 related to various other
assets. During the fourth quarter of 2001, the closing balance sheet of Merisel
Canada was finalized and agreed to by the Company and Synnex. This resulted in a
payment of CDN$2,000,000 to the Company, which is recorded as a $1,305,000
adjustment to the impairment charge previously recorded in the second quarter of
2001.

As a result of the pending sale of an office building located in Cary, North
Carolina, the Company reviewed the carrying value on its books to determine if
there had been any impairment. Based on this review, the Company recorded an
impairment charge of $288,000 in the fourth quarter of 2001 to adjust the
carrying value of the building to the estimated selling price, less estimated
selling expenses.

As a result of the Company's decision to wind down its U.S. distribution
business excluding software licensing and the sale of MOCA during the fourth
quarter of 2000, at the end of 2000 the Company's Canadian distribution and
software licensing businesses represented the only significant on-going
businesses utilizing the Company's SAP operating system ("SAP"). The carrying
value of SAP was greater than the estimated undiscounted operating cash flows
expected to result from these ongoing businesses over the remaining expected
life of SAP. As such, in 2000 the Company recorded an impairment charge of
$20,808,000 to adjust SAP to its estimated fair market value using a discounted
cash flow model.

In each of the quarters ended September 30, 2000 and December 31, 2000, the
Company announced restructuring plans that significantly reduced its facilities
and workforce. In relation to this, the Company evaluated the fixed asset
investments that supported these former facilities and personnel and recorded a
$12,538,000 impairment charge related to redundant and no longer used assets.

Also in 2000, as a result of continuing losses, the Company reviewed the
recoverability of certain identifiable intangible assets to determine if there
had been any impairment. The review of the Company's intangible assets indicated
that the excess of cost over net assets acquired related to the U.S.
distribution business was impaired. Accordingly, the Company recorded an
impairment loss totaling $19,487,000, representing the unamortized goodwill
attributable to the U.S. distribution business.

9. Discontinued Operations

Effective as of October 27, 2000, the Company completed the sale of its MOCA
business unit to Arrow, a distributor of Sun Microsystems products. The stock
sale agreement pursuant to which the sale was made provided for a purchase price
of $110,000,000, subject to adjustments based on changes in working capital
reflected on the closing balance sheet of Merisel Open Computing Alliance, Inc.,
plus an additional amount up to $37,500,000 payable by the end of March 2001
based upon MOCA's ability to retain existing and gain additional business (the
"Additional Payment"). The actual purchase price (excluding the Additional
Payment but including amounts received as deferred purchase price payments) was
approximately $179,800,000 of which approximately $57,500,000 was for amounts
outstanding under the Merisel asset securitization facility. Based on the
purchase price the Company realized a gain, net of costs associated with the
sale, of approximately $25,200,000. In March 2001 the Company received an
Additional Payment of $37,500,000 which, after deducting certain obligations
relating to the payment, netted $36,250,000, which was recorded in the quarter
ended March 31, 2001 and resulted in a gain of $36,250,000.


<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Through Optisel, in November 2000 the Company acquired substantially all the
e-services assets of Value America, Inc. with the intention of leveraging the
Company's distribution and logistics capabilities to operate a logistics and
electronic services business. In connection with the sale of the MOCA business
to Arrow, the Company entered into a transition services agreement with Arrow
pursuant to which Optisel provided fee-based distribution and logistics services
and information technology services for MOCA through February 1, 2002. In
connection with the sale of Merisel Canada to Synnex, Merisel and Synnex entered
into a fee-based transition services agreement pursuant to which Optisel
provided information technology services to Merisel Canada through September 10,
2001. Optisel did not generate any significant revenue except under these two
transition services agreements. As a result of economic conditions generally and
with respect to Internet-related businesses specifically and Optisel's lack of
success in generating business, the Company decided to discontinue operation of
the Optisel business during the fourth quarter of 2001.

The Company has reclassified its consolidated financial statements to reflect
the sale of the MOCA business and the discontinuance of Optisel's operations and
to segregate the revenues, direct costs and expenses (excluding any allocated
costs), assets and liabilities, and cash flows of the MOCA and Optisel
businesses. The net operating results and net cash flows of these businesses
have been reported as "Discontinued Operations" in the accompanying consolidated
statements of operations and cash flows.

Summarized financial information for the discontinued operations for the year
ended December 31, is as follows (in thousands):
<TABLE>
<CAPTION>

                                                            2000 (1)      2001           2002
                                                      --------------- -------------- --------------

<S>                                                        <C>             <C>             <C>
Net Sales                                                  $797,771        $10,538         $1,105
Cost of Sales                                               745,154          5,757            202
                                                      --------------- -------------- --------------

Gross Profit                                                 52,617          4,781            903

Selling, General & Administrative Expenses                   26,752         11,133         (1,070)
                                                      --------------- -------------- --------------

Operating Income (loss)                                      25,865         (6,352)         1,973

Other Expense                                                 7,326
                                                      --------------- -------------- --------------

Net Income (loss)                                           $18,539        ($6,352)        $1,973
                                                      =============== ============== ==============

</TABLE>

(1)  Data for 2000 reflects operations of the MOCA business from January through
     October and of the Optisel business from November through December.

<TABLE>
<CAPTION>

                                                                      December 31,
                                                               2001                  2002
                                                               ----                  ----

<S>                                                              <C>                 <C>
Current Assets                                                   $802
Total Assets                                                      802
Current Liabilities                                             2,635                  418
Total Liabilities                                               2,635                  418
</TABLE>

Assets of discontinued operations are included in prepaid expenses and other
current assets at December 31, 2001. Liabilities of discontinued operations are
included in accrued liabilities in the accompanying consolidated balance sheets
at December 31, 2001 and 2002.


<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. Gain on Debt Extinguishment

In thirteen separate transactions during 2000, the Company purchased
$101,197,000 aggregate principal amount of its outstanding 12-1/2% Senior Notes
due 2005 (the "12.5% Notes"). The aggregate cost to purchase the 12.5% Notes was
$50,982,000 and, as a result, the Company recognized a gain on extinguishment of
debt, net of unamortized debt issuance costs, of $49,003,000 in the year ended
December 31, 2000.

In the first quarter of 2001, the Company purchased or redeemed the remaining
$23,803,000 principal amount of 12.5% Notes outstanding at an aggregate purchase
price of $20,931,000, resulting in an extraordinary gain of $2,872,000. As a
result, none of the 12.5% Notes remain outstanding and the Company's obligations
under the indenture relating to the 12.5% Notes have been discharged.

11. Commitments and Contingencies

The Company leases certain of its facilities and equipment under noncancelable
operating leases. Future minimum rental payments under leases that have initial
or remaining noncancelable lease terms in excess of one year are $221,000 in
2003 and $184,000 in 2004. Certain of the leases contain inflation escalation
clauses and requirements for the payment of property taxes, insurance, and
maintenance expenses. Rent expense for 2000, 2001 and 2002 was $7,835,000,
$3,221,000 and $893,000 respectively, including amounts charged to the
restructuring reserve.

The Company is involved in certain legal proceedings arising in the ordinary
course of business, none of which is expected to have a material impact on the
financial condition or results of operations of Merisel. The Company made
estimates of its potential exposures and has established reserves for potential
losses related to such proceedings. There can be no assurance that the Company's
reserves will fully cover any possible exposure.

In addition, over the last several years the Company has disposed of a number of
businesses, including all of its operations outside the United States, many of
which had obligations that had been guaranteed by the Company. In connection
with those dispositions, the Company sought either to have any guarantees
released or to be indemnified against any liabilities under guarantees. The
Company may not have identified all guarantees to be released and, in at least
one instance, the indemnification provided to the Company is no longer of any
value. Due to the nature of these indemnifications, the Company's exposure under
the agreements cannot be estimated and no amounts have been recorded for such
indemnities.

12.  Preferred Stock

In June 2000, an affiliate of Stonington Partners, Inc., which owns
approximately 65.6% of the Company's outstanding common stock, purchased 150,000
shares of convertible preferred stock (the "Convertible Preferred") issued by
the Company for an aggregate purchase price of $15,000,000. The Convertible
Preferred provides for an 8% annual dividend payable in additional shares of
Convertible Preferred. Dividends are cumulative and will accrue from the
original issue date whether or not declared by the Board of Directors.
Cumulative accrued dividends amounted to $677,000, $1,969,000 and $3,368,000 as
of December 31, 2000, 2001 and 2002, respectively.

At the option of the holder, the Convertible Preferred is convertible into the
Company's common stock at a per share conversion price of $17.50. At the option
of the Company, the Convertible Preferred can be converted into Common Stock
when the average closing price of the Common Stock for any 20 consecutive
trading days is at least $37.50. At the Company's option, on or after June 30,
2003, the Company may redeem outstanding shares of the Convertible Preferred
initially at $105 per share and declining to $100 on or after June 30, 2008,
plus accrued and unpaid dividends. In the event of a defined change of control,
holders of the Convertible Preferred have the right to require the redemption of
the Convertible Preferred at $101 per share plus accrued and unpaid dividends.

13. Employee Stock Options and Benefit Plans

Employee  Stock  Options - On December  19,  1997,  the  Company's  stockholders
approved the Merisel Inc. 1997 Stock Award and Incentive  Plan (the "Stock Award
and Incentive Plan"). Under the Stock Award and Incentive Plan, incentive stock

<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

options and nonqualified stock options as well as other stock-based awards may
be granted to employees, directors, and consultants. The plan authorized the
issuance of an aggregate of 800,000 shares of Common Stock less the number of
shares of Common Stock that remain subject to outstanding option grants under
any of the Company's other stock-based incentive plans for employees after
December 19, 1997 and are not either canceled in exchange for options granted
under the Stock Award and Incentive Plan or forfeited. At December 31, 2002,
630,375 shares were available for grant under the Stock Award and Incentive
Plan. The grantees, terms of the grant (including option prices and vesting
provisions), dates of grant and number of shares granted under the plans are
determined primarily by the Board of Directors or the committee authorized by
the Board of Directors to administer such plans, although incentive stock
options are granted at prices which are no less than the fair market value of
the Company's Common Stock at the date of grant. On December 22, 1997, the
Company granted options under the Stock Award and Incentive Plan in exchange for
previously granted employee stock options that were then outstanding and that
had an exercise price greater than the then-market price of the Common Stock,
subject to the agreement of each optionee to cancel the outstanding options.

As of December 31, 2002, 126,270 options, including 800 options issued to
non-employee Directors, remain outstanding under the Company's other employee
stock option plans, however, no new options may be issued under these plans. In
addition to the shares issuable under the Stock Award and Incentive Plan, 4,000
shares are reserved for issuance under the Company's 1992 Stock Option Plan for
Non-Employee Directors.

During 1999, the Company issued 51,500 restricted stock units to certain
employees under the Stock Award and Incentive Plan. Each restricted stock unit
represented the right to receive one share of common stock of the Company at no
cost to the employee. The restricted stock units cliff vest after three years
with provisions for accelerated vesting in the event certain operating
performance targets are met. As of December 31, 2002 all restricted stock units
had either been exercised or cancelled, therefore there were no restricted stock
units outstanding at that date. Compensation expense, measured by the fair value
at the grant date of the Company's common stock issuable in respect of the
units, totaled $135,000 and was amortized over the related three-year vesting
period. During 2000 and 2001 the Company recorded approximately $22,000 and
$13,000 of compensation expense related to the restricted stock units
outstanding. During 2002, $133,000 of previously recorded compensation expense
related to the restricted stock units was reversed due to the cancellation of
the awards. The following summarizes the aggregate activity in all of the
Company's plans for the three years ended December 31, 2002:
<TABLE>
<CAPTION>

                                       2000                              2001                            2002
                            ----------------------------      ----------------------------   -----------------------------
                                              Weighted                       Weighted                       Weighted
                                              Average                        Average                        Average
                               Shares        Exer. Price        Shares       Exer. Price        Shares      Exer. Price
                            -----------    --------------     ------------  -------------     ----------   -------------
<S>                          <C>             <C>                <C>          <C>               <C>           <C>
Outstanding at
   Beginning of year           549,410              34.40        363,183           31.87         204,965             27.17
Granted                        170,350              21.32         25,000            2.00
Exercised                       (3,025)             19.83                                         (1,000)
Canceled                      (353,552)             30.75       (183,218)          33.16         (24,695)            33.30
                            -----------                        ------------                    ----------
Outstanding at end
   of year                     363,183              31.87        204,965           27.17         179,270             26.46
                            -----------                        ------------                    ----------
Options exercisable at
year end                       236,457                           164,497                         151,770
                            -----------                        ------------                    ----------
Weighted average fair
   value  at date of grant
   of options  granted
   during the year              $11.73                             $1.47                          N/A
                            -----------                        ------------                    ----------
</TABLE>


<PAGE>


                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The following table summarizes information about stock options outstanding at
December 31, 2002:
<TABLE>
<CAPTION>

                                        Options Outstanding                        Options Exercisable

                            --------------------------------------------   ------------------------------------
                                               Weighted
                                                Average      Weighted                             Weighted
                                 Number        Remaining     Average             Number           Average
         Range of             Outstanding        Life        Exercise         Exercisable         Exercise
      Exercise Prices         at 12/31/02      In Years       Price           at 12/31/02          Price
--------------------------  ---------------  -------------  ------------    ---------------     --------------
<S>                          <C>             <C>             <C>             <C>                 <C>

         $117.50 to $117.50              200       1            $117.50                   200          $117.50
         $150.00 to $150.00              200       2            $150.00                   200          $150.00
           $58.75 to $58.75              200       3             $58.75                   200           $58.75
           $18.75 to $19.38            1,400       4             $19.29                 1,400           $19.29
           $16.25 to $43.10          111,645       5             $34.38               111,645           $34.38
           $40.60 to $40.60              125       6             $40.60                   125           $40.60
           $17.50 to $22.19           40,500       8             $18.72                35,500           $18.23
             $2.00 to $2.00           25,000       9              $2.00                 2,500            $2.00
                            ---------------                                  ----------------

           $2.00 to $150.00          179,270                                          151,770
                            ================                                 ================

</TABLE>

The fair value of each option granted during 2000 and 2001 is estimated on the
date of grant using the Black-Scholes option pricing model with the following
weighted average assumptions. There were no stock options granted in 2002:

                                                    2000              2001
                                                -------------    --------------
  Expected life                                      5.0              5.0
  Expected volatility                               89.18%           95.77%
  Risk-free interest rate                            6.34%            3.47%
  Dividend Yield                                     0.00%            0.00%




<PAGE>



                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Benefit Plan - The Company offers a 401(k) savings plan under which all
employees who are 21 years of age with at least 30 days of service are eligible
to participate. The plan permits eligible employees to make contributions up to
certain limitations, with the Company matching certain of those contributions.
The Company's contributions vest 25% per year. The Company contributed $840,070,
$154,000 and $116,000 to the plan during the years ended December 31, 2000, 2001
and 2002, respectively. The contributions to the 401(k) plan were in the form of
cash, which prior to the second quarter of 2001 was used to purchase shares of
the Company's common stock on the open market.

Stock repurchase program - The Company has a stock repurchase program, where it
expects to repurchase up to $1,000,000 of its outstanding common stock. The
Company repurchased $328,000 and $516,000 under the program in 2001 and 2002,
respectively.

14. Segment Information

The Company implemented SFAS 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. In accordance with
SFAS 131, the Company had determined it had four operating segments: the United
States distribution (which included software licensing), the Canadian
distribution segment, Optisel and MOCA. As described in Note 9, effective
October 27, 2000, the Company completed the sale of its MOCA business segment
and effective in the fourth quarter of 2001 the Company discontinued its Optisel
business. MOCA and Optisel have been treated as discontinued operations in the
accompanying consolidated financial statements. The segment data included below
has been restated to exclude amounts related to the MOCA and Optisel business
units.

In accordance with SFAS 131, the Company has prepared the following tables which
present information related to each operating segment included in internal
management reports (in thousands).

                                       ---------------------------
                                                  2002
                                       ------------- -------------
                                            US          Total

Net sales to external customers           $81,638       $81,638
Depreciation and amortization                  28            28
Operating income                            2,191         2,191
Non current assets                          4,217         4,217
Total segment assets                       72,844        72,844

                                                        2001
                                       -----------------------------------------
                                            US          Canada        Total
                                       ------------- ------------ --------------

Net sales to external customers           $40,371      $295,682      $336,053
Depreciation and amortization               2,793         2,255         5,048
Operating income (loss)                    10,467       (27,225)      (16,758)
Non current assets                          3,509                       3,509
Total segment assets                       68,955                      68,955
Capital expenditures                                        114           114

                                                        2000
                                       -----------------------------------------
                                            US          Canada        Total
                                       ------------- ------------ --------------

Net sales to external customers         $1,431,726     $660,216    $2,091,942
Depreciation and amortization               17,588        1,502        19,090
Operating loss                            (108,632)     (13,950)     (122,582)
Non current assets                           7,968       20,512        28,480
Total segment assets                        69,827      108,454       178,281
Capital expenditures                         1,701          152         1,853
<PAGE>

                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

15.  Earnings Per Share

The Company calculates earnings per share ("EPS") in accordance with SFAS 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 dilutive outstanding stock options using the "treasury stock"
method.

The following tables reconcile the weighted average shares used in the
computation of basic and diluted EPS and income available to common stockholders
for the income statement periods presented herein (in thousands except share
data):
<TABLE>
<CAPTION>

                                                               For the Years Ended
                                                                   December 31,
Weighted average shares outstanding                          2000         2001        2002
-----------------------------------                          ----         ----        ----

<S>                                                         <C>          <C>         <C>
Basic and diluted                                           8,031        7,989       7,735
                                                        ========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>

                                                            2000           2001          2002
                                                        -------------- -------------- ------------
<S>                                                        <C>              <C>            <C>
Income (loss) from operations                              $(139,504)       (17,117)         5,137
Preferred stock dividends                                       (677)        (1,292)        (1,399)
                                                        -------------- -------------- ------------
Income (loss) available to common stockholders              (140,181)       (18,409)         3,738
Income (loss) from discontinued operations                    18,539         (6,352)         1,973
Gain on sale of discontinued operations                       25,178         36,250
                                                        -------------- -------------- ------------
Net income (loss) available to common
  Stockholders                                              $(96,464)       $11,489         $5,711
                                                        ============== ============== ============
</TABLE>



16. Quarterly Financial Data (Unaudited)

Selected financial information for the quarterly periods for the fiscal years
2001 and 2002 is presented below (in thousands, except per share amounts):
<TABLE>
<CAPTION>

                                                                                     2001
                                                        ---------------------------------------------------------------
                                                            March 31          June 30     September 30   December 31
                                                        ----------------   -------------  -------------  -------------
<S>                                                           <C>               <C>            <C>          <C>
     Net sales...................................             $162,662          $116,684       $42,199      $14,508
     Gross profit................................                9,164            16,577         4,337        1,969
     Income (loss) from operations...............               (6,824)          (24,093)          912       12,888
     Discontinued operations:....................
        Income (loss) from discontinued operations              (3,095)              177           371       (3,805)
        Gain on sale of discontinued operations..               36,250
     Net income (loss)...........................               26,331           (23,915)        1,282        9,083

     Earnings per share:
     Income (loss) from operations                               (0.92)            (3.04)         0.07         1.59
     Discontinued operations:....................
        Income (loss) from discontinued operations               (0.39)             0.02          0.05        (0.48)
        Gain on sale of discontinued operations..                 4.54
     Net income (loss)...........................                 3.24             (3.02)         0.12         1.11
</TABLE>




<PAGE>


                         MERISEL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>

                                                                                     2002
                                                        ---------------------------------------------------------------
                                                            March 31          June 30     September 30   December 31
                                                        ----------------   -------------  -------------  -------------
<S>                                                            <C>               <C>           <C>          <C>
     Net sales...................................              $15,773           $17,845       $20,714      $27,306
     Gross profit................................                1,234             1,585         2,657        2,810
     Income (loss) from operations...............                 (638)              437         1,187        4,151
     Discontinued operations:....................
        Income from discontinued operations......                1,066                              49          858
     Net income                                                    428               437         1,236        5,009

     Earnings per share:
     Income (loss) from operations                               (0.13)             0.01          0.11         0.49
     Discontinued operations:....................
        Income from discontinued operations......                 0.14                                         0.12
     Net income .................................                 0.01              0.01          0.11         0.61
</TABLE>


In the second quarter of 2001, the Company recorded a $29,416,000 impairment
charge related to the sale of Merisel Canada and a restructuring charge of
$2,325,000 related to reductions in force in the Optisel business. In the fourth
quarter of 2001, the Company recorded a $288,000 impairment charge related to a
building owned in Cary, North Carolina and transferred $2,291,000 of previously
recorded restructuring charges to the discontinued operations of the Optisel
business.

During the fourth quarter of 2001, the Company reduced its allowance for
doubtful accounts by $2,601,000.

Additionally, in the fourth quarter of 2001, the Company settled and/or reviewed
certain matters related to its U.S. distribution business (excluding software
licensing), resulting in an aggregate adjustment of $7,565,000 to previously
established reserves. Of this amount, $1,025,000 related to settlements reached
with product vendors, and is a reflected as a reduction of cost of sales.
$6,540,000 related to favorable settlements or collections experienced with
vendors and customers of the Company's U.S. hardware distribution business and
is reflected as a reduction of selling, general and administrative expenses.

During 2002 the Company recorded reductions of cost of sales in the amounts of
$492,000, $810,000, $1,982,000 and $1,532,000 in the first, second, third and
fourth quarters, respectively. These amounts related primarily to settlements
reached with product vendors. The Company also recorded restructuring charges of
$279,000 and $220,000 during the first and fourth quarters of 2002,
respectively, and a reversal of previously recorded charges of $34,000 in the
second quarter of 2002.

Additionally, in the fourth quarter of 2002, the Company settled and/or reviewed
certain matters related to its U.S. distribution business (excluding software
licensing), resulting in an aggregate adjustment of $2,519,000 to previously
established reserves. Of this amount, $1,840,000 related to favorable
settlements experienced with information technology vendors of the Company's
U.S. hardware distribution business and is reflected as a reduction of selling,
general and administrative expenses.

The Company early adopted Statement of Financial Accounting Standard No. 145,
"Reporting Gains and Losses from Extinguishment of Debt" in 2002. The adoption
resulted in the retroactive reclassification of gain on debt extinguishment from
an extraordinary item to a component of operations.


<PAGE>
<TABLE>
<CAPTION>


                                   SCHEDULE II

                         MERISEL, INC. AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS

                        DECEMBER 31, 2000, 2001 AND 2002

                                              Balance at       Charged to                     Balance at
                                             December 31,       Costs and                     December 31,
                                                1999             Expenses       Deductions        2000
                                            ----------------   ------------    ------------   ------------
<S>                                              <C>            <C>            <C>             <C>
Accounts receivable--Doubtful accounts.....     $8,514,000     $38,991,000    $25,512,000     $21,993,000
Accounts receivable--Other (1).............      4,460,000       4,725,000      5,960,000       3,225,000
                                            ----------------   ------------    ------------   ------------
                                               $12,974,000     $43,716,000    $31,472,000     $25,218,000
                                            ==============================================================

                                              Balance at       Charged to                     Balance at
                                             December 31,       Costs and                     December 31,
                                                2000            Expenses       Deductions        2001
                                            ----------------   ------------    ------------   ------------
Accounts receivable--Doubtful accounts.....    $21,993,000    ($7,774,000)    $13,665,000        $554,000
Accounts receivable--Other (1).............      3,225,000                      3,076,000         149,000
                                            ----------------   ------------    ------------   ------------
                                               $25,218,000    ($7,774,000)    $16,741,000        $703,000
                                            ==============================================================

                                              Balance at       Charged to                     Balance at
                                             December 31,       Costs and                     December 31,
                                                2001            Expenses       Deductions        2002
                                            ----------------   ------------    ------------   ------------
Accounts receivable--Doubtful accounts.....       $554,000      $1,003,000       $410,000      $1,147,000
Accounts receivable--Other (1).............        149,000       ($71,000)         40,000          38,000
                                            ----------------   ------------    ------------   ------------
                                                  $703,000        $932,000       $450,000      $1,185,000
                                            ==============================================================
----------
(1)  Accounts receivable--Other includes allowances for net sales returns,
     uncollectible cooperative advertising credits and notes receivable.
</TABLE>


Item 9. Changes In and Disagreements with Accountants on Accounting and
        Financial Disclosure

               None.


<PAGE>



                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

The information required by this item is incorporated herein by reference to
information contained in the Company's definitive proxy statement for its 2003
annual meeting of stockholders (the "2003 Proxy Statement") under the captions
"Election of Directors-Information Regarding Nominees and the Board of
Directors," "Election of Directors-Executive Officers" and "Election of
Directors-Section 16(a) Beneficial Ownership Reporting Compliance."

Item 11. Executive Compensation.

The information required by this time is incorporated herein by reference to the
information contained in the 2003 Proxy Statement under the captions "Election
of Directors-Executive Compensation-Summary Compensation Table;-Options in
2002;-Compensation Committee Interlocks and Insider Participation," "Election of
Directors-Employment and Change Of Control Arrangements" and "Election of
Directors-Director Compensation."

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is incorporated herein by reference to the
information contained in the 2003 Proxy Statement under the caption "Election of
Directors-Ownership of Common Stock."

Item 13.  Certain Relationships and Related Transactions.

The information required by this item in incorporated herein by reference to the
information contained in the 2003 Proxy Statement under the caption "Election of
Directors-Certain Relationships and Related Transactions."


                                     PART IV

Item 14.  Controls and Procedures

Within 90 days prior to the date of this report, the Company completed an
evaluation, under the supervision and with the participation of the Company's
chief executive officer and chief financial officer of the effectiveness of the
Company's disclosure controls and procedures pursuant to Rule 13a-14 of the
Exchange Act. Based on this evaluation, the Company's chief executive officer
and chief financial officer concluded that the Company's disclosure controls and
procedures were effective with respect to timely communicating to them all
material information required to be disclosed in this report as it related to
the Company and its subsidiaries.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed this evaluation.


Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

  (a) List of documents filed as part of this Report:

         (1)  Financial Statements included in Item 8:

              Independent Auditors' Report.

              Consolidated Balance Sheets at December 31, 2001 and 2002.

              Consolidated Statements of Operations for each of the three years
              in the period ended December 31, 2002.

              Consolidated Statements of Changes in Stockholders' Equity for
              each of the three years in the period ended December 31, 2002.


<PAGE>



              Consolidated Statements of Cash Flows for each of the three years
              in the period ended December 31, 2002.

              Notes to Consolidated Financial Statements.

         (2)  Financial Statement Schedules included in Item 8:

              Schedule II - Valuation and Qualifying Accounts.

              Schedules other than that referred to above have been omitted
              because they are not applicable or are not required under the
              instructions contained in Regulation S-X or because the
              information is included elsewhere in the Consolidated Financial
              Statements or the Notes thereto.

         (3)  Exhibits:

              The exhibits listed on the accompanying Index of Exhibits are
              filed as part of this Annual Report.

         (b)  The Following Reports on Form 8-K were filed during the quarter
              ended December 31, 2002:

         Report on Form 8-K filed on December 20, 2002 reporting a change in the
         Company's fiscal year.


<PAGE>


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

Date: March 28, 2003                MERISEL, INC.



                                    By:/s/Timothy N. Jenson
                                    ----------------------------------------
                                    Timothy N. Jenson
                                    Chief Executive Officer, President and
                                    Chief Financial Officer
                                    (Principal Executive and Financial Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

             Signature                                          Title                                   Date



<S>                                                 <C>                                            <C>
/s/Allyson Vanderford                                  Vice President-Finance                      March 28, 2003
------------------------------------               (Principal Accounting Officer)
Allyson Vanderford

/s/Albert J. Fitzgibbons III                                  Director                             March 28, 2003
------------------------------------
Albert J. Fitzgibbons III


/s/Bradley J. Hoecker                                         Director                             March 28, 2003
------------------------------------
Bradley J. Hoecker


/s/Timothy N. Jenson                                          Director                             March 28, 2003
------------------------------------
Timothy N. Jenson


/s/Dr. Arnold Miller                                          Director                             March 28, 2003
------------------------------------
Dr. Arnold Miller



/s/Lawrence J. Schoenberg                                     Director                             March 28, 2003
------------------------------------
Lawrence J. Schoenberg

</TABLE>


<PAGE>


                                 CERTIFICATIONS

         I, Timothy N. Jenson, certify that:

         1. I have reviewed this annual report on Form 10-K of Merisel, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

              a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

              b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

              c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

              a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

              b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    March 28, 2003
                                                     Timothy N. Jenson
                                                     Chief Executive Officer



<PAGE>



                                 CERTIFICATIONS

         I, Timothy N. Jenson, certify that:

         1. I have reviewed this annual report on Form 10-K of Merisel, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

              a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

              b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

              c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

              a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

              b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    March 28, 2003
                                                     Timothy N. Jenson
                                                     Chief Financial Officer



<PAGE>


                                  EXHIBIT INDEX

3.1      Restated  Certificate of Incorporation of Merisel,  Inc., filed as an
         exhibit to the Form S-1 Registration Statement of Softsel Computer
         Products, Inc., No. 33-23700.**

3.2      Amendment to Certificate of  Incorporation  of Merisel,  Inc. dated
         August 22, 1990,  filed as exhibit 3.2 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended September 30, 1990.**

3.3      Amendment to Certificate of  Incorporation  of Merisel,  Inc. dated
         December 19, 1997, filed as Annex I to the Company's Schedule 14A dated
         October 6, 1997.**

3.4      Certificate of Amendment to the Restated  Certificate  of Incorporation
         of Merisel,  Inc. dated February 13, 2001.

3.5      Bylaws, as amended,  of Merisel,  Inc, filed as exhibit 3.1 to the
         Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
         1991.**

4.1      Certificate of Designation of Convertible  Preferred Stock of Merisel,
         Inc., filed as exhibit 99.2 to the Company's Current Report on Form 8-K
         dated June 9, 2000.**

*10.1    1991 Employee Stock Option Plan of Merisel, Inc. together with Form of
         Incentive Stock Option Agreement and Form of Nonqualified Stock Option
         Agreement under the 1991 Employee Stock Option Plan, filed as exhibit
         10.1 to the Company's Quarterly Report on Form 10-Q for the quarter
         ended June 30, 1991.**

*10.2    Amendment to the 1991 Employee Stock Option Plan of Merisel, Inc. dated
         January 16, 1997, filed as exhibit 10.67 to the Company's Annual Report
         on Form 10-K for the year ended December 31, 1996.**

*10.3    Merisel,  Inc. 1992 Stock Option Plan for  Nonemployee  Directors,
         filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
         for the quarter ended June 30, 1992.**

*10.4    Merisel,  Inc. 1997 Stock Award and Incentive Plan, filed as Annex II
         to the Company's  Schedule 14A dated October 6, 1997.**

*10.5    Form of Nonqualified Stock Option Agreement under the Merisel, Inc.
         1997 Stock Award and Incentive Plan, filed as exhibit 10.7 to the
         Company's Annual Report on Form 10-K for the year ended December 31,
         1997.**

*10.6    Form of Restricted Stock Unit Agreement under the Merisel, Inc. 1997
         Stock Award and Incentive Plan, filed as exhibit 10.8 to the Company's
         Annual Report on Form 10-K for the year ended January 1, 2000.**

*10.7    Deferred Compensation Agreement between Merisel, Inc. and Timothy N.
         Jenson dated September 18, 2001, filed as exhibit 10.1 to the Company's
         Quarterly Report on Form 10-Q for the period ended September 31, 2001.
         **

*10.8    Amendment to Deferred  Compensation  Agreement between Merisel,  Inc.
         and Timothy N. Jenson dated December 18, 2001.

*10.9    Retention  Agreement dated as of April 1, 2001 between Merisel,  Inc.,
         Merisel Americas,  Inc. and Timothy N. Jenson,  filed as exhibit 10.24
         to the Company's  Annual Report on Form 10-K for the period ended
         December 31, 2000.

*10.10   Promissory  Note dated March 17, 1999 between Timothy N. Jenson and
         Merisel,  Inc.,  filed as exhibit 10.5 to the Company's Quarterly
         Report on Form 10-Q for the period ended March 30, 1999.**

*10.11   Bonus Agreement dated as of August 10, 2000 between Merisel Americas,
         Inc. and Timothy N. Jenson, filed as exhibit 10.3 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended September 30,
         2000.**


<PAGE>



*10.12   Change of Control  Agreement  dated as of August 18, 1999 between
         Merisel,  Inc.,  Merisel  Americas,  Inc. and  Karen A.  Tallman,
         filed as  exhibit  10.3 to the  Company's  Quarterly  Report on Form
         10-Q for the quarter ended September 30, 1999.**

*10.13   Retention Agreement dated August 10, 2000 between Merisel Americas,
         Inc. and Karen Tallman, filed as exhibit 10.4 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended September 30,
         2000.**

*10.14   Change of Control Agreement dated as of April 27, 2000 between Merisel,
         Inc., Merisel Americas, Inc. and Allyson Vanderford, filed as exhibit
         10.32 to the Company's Annual Report on Form 10-K for the year ended
         December 31, 2001. **

*10.15   Severance Agreement dated as of December 21, 2000 between Merisel
         Americas, Inc. and Allyson Vanderford, filed as exhibit 10.33 to the
         Company's Annual Report on Form 10-K for the year ended December 31,
         2001.
         **

10.16    Registration  Rights Agreement,  dated September 19, 1997, by and among
         Merisel,  Inc.,  Merisel Americas, Inc. and Phoenix  Acquisition
         Company II, L.L.C, filed as exhibit 99.4 to the Company's Current
         Report on Form 8-K, dated September 19, 1997.**

10.17    Stock  Subscription  Agreement by and between Merisel,  Inc. and
         Phoenix  Acquisition  Company II., L.L.C. dated as of June 2, 2000,
         filed as exhibit 99.1 to the Company's Form 8-K, dated June 9, 2000.**

10.18    Share Purchase Agreement, dated as of July 2, 2001, by and between
         Merisel Americas, Inc., a Delaware corporation, and SYNNEX Information
         Technologies, Inc., a California corporation, filed as exhibit 2.1 to
         the Company's Form 8-K, dated July 2, 2001.**

10.19    Real Property Purchase and Sale Agreement dated as of December 10,
         2001 by and between HD Acquisitions, LLC and Merisel Properties,
         Inc., filed as exhibit 10.1 to the Company's Form 10-Q, for the
         quarter ended June 30, 2002.**

10.20    Tenth Amendment to Real Property Purchase and Sale Agreement dated as
         of May 10, 2002 between DCF I, LLC, the successor in interest to HD
         Acquisitions, LLC, and Merisel Properties, Inc., filed as exhibit 10.2
         to the Company's Form 10-Q, for the quarter ended June 30, 2002.**

10.21    Consent to Assignment of Land Purchase Agreement dated May 10, 2002
         between Merisel  Properties,  Inc., HD Acquisitions,  LLC and DCF I,
         LLC.,  filed as exhibit  10.3 to the  Company's  Form 10-Q,  for the
         quarter ended June 30, 2002. **

10.22    Purchase Money Note dated May 20, 2002 issued by DCF I, LLC to Merisel
         Properties, Inc., filed as exhibit 10.4 to the Company's Form 10-Q, for
         the quarter ended June 30, 2002. **

10.23    Purchase Money Deed of Trust dated May 20, 2002 between DCF I, LLC, as
         Grantor, Karen Tallman, as Trustee, and Merisel Properties, Inc., as
         Beneficiary, filed as Exhibit 10.5 to the Company's Form 10-Q, for the
         quarter ended June 30, 2002. **

10.24    Construction Promissory Note dated May 20, 2002 issued by DCFI, LLC to
         Merisel Properties, Inc, filed as exhibit 10.6 to the Company's Form
         10-Q, for the quarter ended June 30, 2002. **

10.25    Deed of Trust and Security Agreement dated May 20, 2002 between DCF I,
         LLC, as Grantor, Karen Tallman, as Trustee, and Merisel Properties,
         Inc., as Beneficiary, filed as exhibit 10.7 to the Company's Form 10-Q,
         for the quarter ended June 30, 2002. **

10.26    Construction Loan Agreement dated May 20, 2002 between DCF I, LLC,
         Anthony Dilweg and Merisel Properties, Inc., filed as exhibit 10.8 to
         the Company's Form 10-Q, for the quarter ended June 30, 2002.
         **

10.27    Amended and Restated Registration Rights Agreement dated June 9, 2000
         (executed November 7, 2002) between Merisel, Inc. and Phoenix
         Acquisition, filed as exhibit 10.1 to the Company's Form 10-Q, for the
         quarter ended September 30, 2002.**


<PAGE>



21       Subsidiaries of the Registrant.

23       Consent of Deloitte & Touche LLP, Independent Accountants.

99.1     Certification  of CEO and CFO pursuant to 18 U.S.C.  Section 1350,  as
         adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2     Code of Business Conduct
--------
*Management contract or executive compensation plan or arrangement.
**Incorporated by reference.