----

**UNITED        STATES**

**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, 2004**

**OR**

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

**For        the transition period from __________**
** to        __________.**

**MERISEL,        INC.**

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

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

**Documents        Incorporated By Reference**

----

**TABLE        OF CONTENTS**

|                      |                                                                                                                                                                         | PAGE   |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                      | **PART                  I**                                                                                                                                                  |   |
|                      |                                                                                                                                                                         |   |
| Item                  1.  | Business                                                                                                                                                                     | 1      |
| Item                  2.  | Properties                                                                                                                                                                   | 10     |
| Item                  3.  | Legal                  Proceedings                                                                                                                                           | 10     |
| Item                  4.  | Submission                  of Matters to a Vote of Security                  Holders                                                                                        | 10     |
|                      |                                                                                                                                                                         |   |
|                      | **PART                  II**                                                                                                                                                 |   |
|                      |                                                                                                                                                                         |   |
| Item                  5.  | Market                  for the Registrant’s Common Equity and Related                  Stockholder Matters and Issuer Purchases of Equity                  Securities | 11     |
| Item                  6.  | Selected                  Financial Data                                                                                                                                     | 11     |
| Item                  7.  | Management’s                  Discussion and Analysis of Financial Condition                  and Results of Operations                                                | 11     |
| Item                  7A. | Quantitative                  and Qualitative Disclosures about Market                  Risk                                                                                 | 18     |
| Item                  8.  | Financial                  Statements and Supplementary                  Data                                                                                                | 18     |
| Item                  9.  | Changes                  in and Disagreements with Accountants on Accounting                  and Financial Disclosure                                                       | 33     |
| Item                  9A. | Controls                  and Procedures                                                                                                                                     | 33     |
| Item                  9B. | Other                  Information                                                                                                                                           | 33     |
|                      |                                                                                                                                                                         |   |
|                      | **PART                  III**                                                                                                                                                |   |
|                      |                                                                                                                                                                         |   |
| Item                  10. | Directors                  and Executive Officers of the                  Registrant                                                                                         | 34     |
| Item                  11. | Executive                  Compensation                                                                                                                                      | 35     |
| Item                  12. | Security                  Ownership of Certain Beneficial Owners and                  Management and Related Transactions                                                    | 38     |
| Item                  13. | Certain                  Relationships and Related                  Transactions                                                                                             | 39     |
| Item                  14. | Principal                  Accountant Fees and Services                                                                                                                      | 40     |
|                      |                                                                                                                                                                         |   |
|                      | **PART                  IV**                                                                                                                                                 |   |
|                      |                                                                                                                                                                         |   |
| Item                  15. | Exhibits                  and Financial Statement                  Schedules                                                                                                 | 41     |
|                      |                                                                                                                                                                         |   |

----

**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,”“will,”“estimates,”“plans,”“intends” and        similar expressions, constitute “forward-looking statements” within the meaning        of Section 27A of the Securities Act of 1933 and Section 21E of the Securities        Exchange Act of 1934. These forward looking statements reflect current views        about the plans, strategies and prospects of Merisel, Inc. (the “Company”), and        are based upon information currently available to the Company and on current        assumptions. These forward-looking statements involve known and unknown risks,        uncertainties and other factors which may cause actual results, performance        or        achievements of the Company to be materially different from any future results,        performance or achievements expressed or implied by such forward-looking        statements. **

**These        risks, uncertainties and other factors include, but are not limited to the        following: **

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

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

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

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

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

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

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

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

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

| **·  ** | **other                  risks detailed in “Business - Risk                  Factors.”** |
|------------------------|------------------------------------------------------------------------------------------------------|

**In        evaluating these forward looking statements, you should consider these risks        and        uncertainties, together with the other risks described from time to time        in the        Company’s other reports and documents filed with the SEC. You are cautioned not        to place undue reliance on these 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.**

----

Table            of Contents

**PART          I**

**Item          1. Business. **

**Overview**

** **

----

Table              of Contents

| ·   | creative                    design capabilities; |
|--------------------|--------------------------------------------------|

| ·   | production                    art expertise; |
|--------------------|----------------------------------------------|

| ·   | high                    quality customized imaging                    capabilities; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | rapid                    turnaround and delivery times; |
|--------------------|---------------------------------------------------------|

| ·   | up-to-date                    knowledge of the printing press specifications of converters                    and printers                    located throughout the                    United States; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | color                    expertise; |
|--------------------|-------------------------------------|

| ·   | digital                    imaging asset management; and |
|--------------------|----------------------------------------------------------|

| ·   | workflow                    management. |
|--------------------|-----------------------------------------|

**Graphic          Services Industry and the Company’s Markets **

----

Table              of Contents

| ·   | the                    shorter turnaround and delivery time requirements from the creative                    design                    phase to final distribution of the packaged                    product; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                    increasing number of SKUs competing for shelf space and market                    share; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | the                    increasing importance of package appearance and promotions due                    to                    demonstrated point-of-sale consumer purchasing behavior; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                    increasing requirements for worldwide quality and consistency                    in packaging                    as companies attempt to build global brand name recognition. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**The          Company’s Growth Strategy **

| ·   | *Organic                      Growth.*As                      market conditions have created growing opportunities, the Company                      relies                      on its highly skilled sales force to be the primary growth                      driver for the                      Company, but also relies on superior product quality, technology,                      service,                      scale and scope. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Growth                      through Acquisitions.*The                      Company has completed four acquisitions during 2005 and plans                      to continue                      to seek additional strategic acquisition                      opportunities. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Channel                      Footprint Expansion.*The                      Company intends to broaden its channel footprint beyond current                      space,                      such as leading the industry’s move to digital                      imaging. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Global                      Expansion.*                      The Company intends to expand globally by following its key                      mulit-national                      clients. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Geographic                      Expansion.*                      The Company’s operations are currently focused in the New York, New Jersey                      and Los Angeles markets. Over the next twelve months, the Company                      will                      look to broaden its geographic footprint to other key                      markets. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table              of Contents

**Services          **

**Research          and Development **

**Marketing          and Distribution **

**Clients          **

----

Table              of Contents

**Competition          **

**Purchasing          and Raw Materials **

**Intellectual          Property **

** **

**Employees          **

**Backlog          **

**Seasonality          and Cyclicality **

----

Table              of Contents

**Environmental          Compliance**

**Where          You Can Find Additional Information**

**Risk          Factors **

**The          Company may not be able to successfully implement its business strategy,          which          could adversely affect the Company’s business, financial condition and results          of operations.**

| ·   | general                    economic conditions and conditions in the Company’s local                    markets; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | the                    competitive environment in the graphic image arts that may force                    the                    Company to reduce prices; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                    Company’s ability to anticipate and meet changes in consumer preferences                    for graphic image arts products and services in a timely or cost-effective                    manner; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                    Company’s continued ability to hire and retain qualified                    personnel. |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

**If          the Company’s senior management or other key personnel were to leave, the          Company’s operating results could be adversely affected, and the Company might          not be able to attract or retain additional qualified          personnel.**

**The          Company lacks long-term agreements with its customers, which could make          the          Company business and results of operations highly          volatile.**

----

Table              of Contents

**If          the Company is unable to rapidly and successfully develop new ways of providing          services and new products, some of its services or products may become          obsolete          and its operating results could suffer.**

**The          graphic image arts industry is highly competitive and the Company’s business and          results of operations will be adversely affected if the Company is not          able to          complete effectively.**

**The          process of integrating the Company’s recent acquisitions may disrupt the          Company's business, operations and internal resources.**

**If          the Company is unable to relist its common stock with the Nasdaq National          Market          or another major securities market or exchange, the trading price of the          Company’s common stock may decline substantially and stockholders will          experience a significant decrease in the liquidity of the common          stock.**

----

Table              of Contents

**If          the Company is unable to successfully bring the internal controls of its          acquired business up to the level required of a public company, its ability          to          report its financial results on a timely and accurate basis may continue          to be          adversely affected.**

**The          Company’s senior credit facilities may limit its ability to expand its business,          and its ability to comply with the covenants, tests and restrictions governing          the credit facilities may be affected by events that are beyond the Company’s          control.**

**Any          failure by the Company to successfully complete acquisitions could harm          its          business and financial prospects. **

----

Table              of Contents

| ·   | demonstrating                    to customers and other business partners that the transaction                    will not                    result in adverse changes in client service standards or business                    focus                    and helping customers conduct business easily; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | consolidating                    administrative infrastructure and consolidating and rationalizing                    corporate IT infrastructure, including implementing information                    management                    and system processes that enable increased customer satisfaction,                    improved                    productivity and lower costs; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | coordinating                    sales and marketing efforts to communicate the Company’s capabilities                    effectively; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | preserving                    marketing or other important relationships and resolving potential                    conflicts that may arise; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | minimizing                    the diversion of management attention from ongoing business concerns; |
|--------------------|-----------------------------------------------------------------------------------------------------|

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

| ·   | 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. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Business          disruptions could seriously harm the Company’s future revenue and financial          condition and increase the Company’s costs and expenses.**

----

Table              of Contents

**Item          2. Properties. **

|  **Location**                           |  **Square                    Feet**  **(approx.)**  |  **Owned                    /Leased**  |  **Purpose**                                             |  **Lease                    Expiration Date**  |  **Division**                           |
|---------------------------------------------------|-------------------------------------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------|----------------------------------------------------------|---------------------------------------------------|
|  New                    York, NY        |  25,000                                                       |  Leased                                |  General                    Offices, Operating Facility  |  December                    2011              |  Corporate                              |
|  New                    York, NY        |  81,000                                                       |  Leased                                |  General                    Offices, Operating Facility  |  April                    2014                 |  Corporate                              |
|  New                    York, NY        |  7,500                                                        |  Leased                                |  Store                    Front, Operating Facility      |  September                    2005             |  Color                    Edge Art      |
|  Edison,                    NJ          |  13,720                                                       |  Leased                                |  Operating                    Facility                   |  Month                    to month             |  Color                    Edge Visual   |
|  Burbank,                    CA         |  65,000                                                       |  Leased                                |  General                    Offices, Operating Facility  |  July                    2011                  |  Crush                    Creative      |
|  Long                    Beach, CA (1)  |  5,017                                                        |  Leased                                |  General                    Offices                      |  September                    2005             |  Corporate                              |
|  Cary,                    NC            |  29                    acres                                  |  Owned                                 |  Held                    for sale                        |  N/A                                           |  Merisel                    Properties  |

**Item          3. Legal Proceedings. **

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

| (a)   | The                    Company held its annual meeting of stockholders on October 27,                    2004. |
|-----------------|----------------------------------------------------------------------------------------------------------------|

| (b)   | Not                    applicable. |
|-----------------|------------------------------------|

| (c)   | The                    following matters were submitted to a vote of security holders                    at the                    annual meeting: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | The                    stockholders voted upon and approved an amendment to the Company’s                    restated certificate of incorporation to decrease the number                    of authorized                    shares of capital stock from 151,000,000 to 31,000,000 and decrease                    the                    number of authorized shares of common stock from 150,000,000                    to                    30,000,000. The vote on the proposal was as                    follows: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **For**   | **Against** | **Abstentions** | **Broker                    Non-Votes** |
|-----------|-------------|-----------------|-----------------------------------------|
|      |        |            |                                    |
| 7,893,808 | 14,919      | 3,044           |                                    |

| 2.   | Election                    of nominees as Class I directors to the Board of Directors. The                    nominees                    were elected as indicated by the following vote                    counts: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Nominee**                                  | **Votes                    For** | **Votes****Withheld** |
|----------------------------------------------|----------------------------------|-----------------------|
| Albert                    J. Fitzgibbons III | 7,885,460                        | 26,311                |
| Lawrence                    J. Schoenberg    | 7,897,498                        | 14,273                |
|                                         |                             |                  |
|                                         |                             |                  |
|                                         |                             |                  |

| (d)   | Not                    applicable. |
|-----------------|------------------------------------|

----

Table              of Contents

**PART          II**

**Item          5. Market for the Registrant's Common Equity and Related          Stockholder Matters and Issuer Purchases of Equity          Securities.**

|                                    |                       |                       |   |                                    |                      |                      |
|-----------------------------------------|----------------------------|----------------------------|--------|-----------------------------------------|---------------------------|---------------------------|
| **Fiscal                    Year 2004** | **High**                   | **Low**                    |   | **Fiscal                    Year 2003** | **High**                  | **Low**                   |
| First                    quarter        | 6                    5/16  | 4                    1/4   |   | First                    quarter        | 3                    1/2  | 1                    7/8  |
| Second                    quarter       | 5                    11/16 | 4                    1/2   |   | Second                    quarter       | 4                    9/16 | 2                    1/16 |
| Third                    quarter        | 4                    5/8   | 2                    5/16  |   | Third                    quarter        | 6                    1/16 | 4                    1/4  |
| Fourth                    quarter       | 6                    3/8   | 3                    15/16 |   | Fourth                    quarter       | 7                    1/4  | 4                    7/8  |
|                                    |                       |                       |   |                                    |                      |                      |

**Holders          of Record**

**Dividend          Policy**

**Item          6. Selected Financial Data. **

|                                                                                                                     |   | **2000** |     | **2001** |   | **2002** |   | **2003** |   | **2004** |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|----------|--------|----------|--------|
| **Income                        Statement Data (1 and 2):**                                                              |   |     |     |     |   |     |   |     |   |     |   |
| Selling,                        general & administrative expenses                                               |   | $        | 2,509    |     | $      | 2,563    |   | $        | 2,670  |     | $      | 2,602 |   | $ | 2,276 |   |
| Gain                        on debt extinguishment (3)                                                              |   |     | 49,003   |     |   | 2,872    |   |     | -      |     |   | - |   |   | - |   |
| Operating                        income (loss)                                                                      |   |     | 46,494   |     |   | 309      |   |     | (2,670 | )        |   | (2,602 | ) |   | (2,276 | ) |
| Interest                        expense (income), net                                                               |   |     | 10,920   |     |   | (264     | )      |     | (802   | )        |   | (436 | ) |   | (586 | ) |
| Income                        (loss) from continuing operations                                                     |   |     | 35,574   |     |   | 573      |   |     | (1,868 | )        |   | (2,166 | ) |   | (1,690 | ) |
| Discontinued                        operations:Income                        (loss) from discontinued operations         |   |     | (156,539 | )        |   | (24,042  | )      |     | 8,978  |     |   | 4,926 |   |   | 3,540 |   |
| Gain                        (loss) on sale of discontinued operations                                                    |   |     | 25,178   |     |   | 36,250   |   |     | -      |     |   | - |   |   | (2,643 | ) |
| Net                        income (loss)                                                                            |   | $        | (95,787  | )        | $      | 12,781   |   | $        | 7,110  |     | $      | 2,760 |   | $ | (793 | ) |
| Preferred                        stock dividends                                                                    |   |     | 677      |     |   | 1,292    |   |     | 1,399  |     |   | 1,514 |   |   | 1,639 |   |
| Net                        income (loss) available to commonstockholders                                            |   | $        | (96,464  | )        | $      | 11,489   |   | $        | 5,711  |     | $      | 1,246 |   | $ | (2,432 | ) |
|                                                                                                                     |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |
| **Share                        Data (4):**                                                                               |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |
| Net                        income (loss) available to common stockholders per diluted                        share  |   | $        | (12.01   | )        | $      | 1.44     |   | $        | 0.74   |     | $      | 0.16 |   | $ | (0.32 | ) |
| Weighted                        average number of diluted Shares                                                         |   |     | 8,031    |     |   | 7,989    |   |     | 7,735  |     |   | 7,617 |   |   | 7,620 |   |
| **Balance                        Sheet Data:**                                                                           |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |
| Working                        capital                                                                              |   | $        | 8,741    |     | $      | 35,304   |   | $        | 41,659 |     | $      | 42,812 |   | $ | 43,767 |   |
| Total                        assets                                                                                 |   |     | 178,281  |     |   | 68,955   |   |     | 72,844 |     |   | 67,212 |   |   | 47,950 |   |
| Long-term                        and subordinated debt                                                              |   |     | 23,803   |     |   | -        |   |     | -      |     |   | - |   |   | - |   |
| Total                        debt                                                                                   |   |     | 25,166   |     |   | -        |   |     | -      |     |   | - |   |   | - |   |
| Stockholders'                        equity                                                                         |   |     | 13,418   |     |   | 35,395   |   |     | 41,750 |     |   | 44,662 |   |   | 43,841 |   |
|                                                                                                                     |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |
|                                                                                                                     |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |
|                                                                                                                     |   |     |     |     |   |     |   |     |   |     |   |   |   |   |   |   |

| (1)   | For                    the years 2000 and 2001, Merisel's fiscal year was the 52- week                    period                    ending on the Saturday nearest December 31. For clarity of presentation                    throughout this report, Merisel described these fiscal years                    presented as                    if the year ended on December 31. Effective for the year ended                    December                    31, 2002 the Company changed its fiscal year to end on 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 its consolidated financial statements                    to exclude                    results related to the U.S., Canada, MOCA and Optisel business                    units,                    which are included in discontinued operations. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The                    Company 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. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

**Introduction**

----

Table              of Contents

**Management          Overview of 2004 Operations and Key Events**

----

Table              of Contents

**Subsequent          Events**

| ·   | ***Color                    Edge.***                    -                    The Company purchased substantially all of the assets of Color                    Edge, Inc.,                    a New York corporation ("CE"), for a purchase price consisting                    of                    $2,335,000 in cash, subject to adjustment based upon CE's and                    CEV's (as                    defined below) net working capital on March 1, 2005, and an additional                    amount of up to approximately $905,000 in cash, providing EBITDA,                    net of                    capital expenditures, exceeds certain agreed upon thresholds                    over a                    three-year period commencing January 1, 2005. In addition, the                    Company                    agreed to assume certain of CE's liabilities, as discussed below,                    and make                    an accounts receivable payment to CE to the extent certain excluded                    liabilities payments are made by                    CE. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ***Color                    Edge Visual***-                    The Company purchased substantially all of the assets of each                    of Color                    Edge Visual, Inc., a New York corporation ("Visual"), and its                    wholly-owned                    subsidiary, Photobition New York, Inc., a Delaware corporation                    ("PBNY"                    collectively with Visual, "CEV"), for a purchase price consisting                    of                    $18,169,000 in cash, subject to adjustment based upon CE's and                    CEV's net                    working                    capital on March 1, 2005, and an additional amount of up to approximately                    $7,041,000 in cash, provided EBITDA, net of capital expenditures,                    exceeds                    certain agreed upon thresholds over a three-year period commencing                    January                    1, 2005. In addition, MCEV agreed to assume certain of CEV's                    liabilities                    and make an accounts receivable payment to CEV to the extent                    certain                    excluded liabilities payments are made by CEV. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ***Comp                    24***                    -                    The Company purchased substantially all of the assets of Comp                    24, LLC, a                    Delaware limited liability company ("Comp 24"), for a purchase                    price                    consisting of $10,889,000 in cash, subject to adjustment based                    upon Comp                    24's net working capital on the Closing Date,                    and an additional amount of up to $1,631,000 in cash, provided                    EBITDA, net                    of capital expenditures, exceeds certain agreed upon thresholds                    over the                    three-year period commencing January 1, 2005. In addition, Merisel                    agreed                    to assume certain obligations for borrowed money of Comp 24 in                    the amount                    of $1,000,000, plus trade payables and accruals of Comp 24. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ***Crush***                    -                    The Company purchased substantially all of the assets of Crush                    Creative,                    Inc. ("Crush"). The purchase price consisted of $6,937,500 in                    cash and an                    additional amount of up to approximately $2,500,000 over a four                    year                    period provided EBITDA, net of excess capital expenditures, exceeds                    certain agreed upon thresholds. The Company also assumed certain                    obligations for borrowed money and capital lease obligations                    of Crush in                    the approximate aggregate amount of $2,500,000 plus certain trade                    accruals                    and trade payables of Crush. The aggregate cash consideration                    to be paid                    to Crush will be subject to adjustment based on the difference,                    if any,                    between the net working capital and tangible net worth of assumed                    assets                    and liabilities at closing and certain agreed upon target amounts.                    A                    portion of the cash consideration payable will be held in escrow                    until                    certain agreed release dates. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table              of Contents

***Discontinued          Operations***

----

Table              of Contents

**Results          of Operations **

**Comparison          of Fiscal Years Ended December 31, 2004 and December 31,          2003**

*Selling,          General and Administrative*

*Interest          Income*

*Income          Taxes*
** **

*Discontinued          Operations*

*Net          Income*

----

Table              of Contents

**Comparison          of Fiscal Years Ended December 31, 2003 and December 31,          2002**

*Selling,          General and Administrative*

*Interest          Income*

*Income          Taxes*
** **

*Discontinued          Operations*

*Net          Income*

**Liquidity          and Capital Resources**

**Cash          Flow Activity for 2002, 2003 and 2004**

| **Analysis                    of Cash Flows**                             |   | **For                    the Years Ended**  |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|
| (in                    thousands)                                         |   | **2002**                                    |   | **2003**  |   | **2004**  |   |
| Cash                    flows used in operating activities                |   | $                                                | 1,443  |   | $ | 2,692 |   | $ | 3,439 |   |
| Cash                    flows used in investing activities                |   |                                             | 636    |   |   | 63 |   |   | -- |   |
| Cash                    flows provided by (used in) financing activities  |   |                                             | (516   | ) |   | (7 | ) |   | 15 |   |
| Net                    increase (decrease) in cash and cash equivalents   |   | $                                                | (8,783 | ) | $ | (1,847 | ) | $ | 1,913 |   |

----

Table              of Contents

***Debt          Obligations, Financing Sources and Capital          Expenditures***

**Contractual          Obligations**

| **(in                    thousands)**                                                                   | **Payment                    due by period** |
|---------------------------------------------------------------------------------------------------------|----------------------------------------------|
| **Contractual                    Obligations**                                                          | **Total**                                    | **Less                    than 1 Year** | **1-3                    Years** | **4-5                    Years** | **More                    than 5 Years** |
| Operating                    Lease Obligations                                                          | 195                                          | 34 | 109 | 52 | - |
| Other                    Long-Term Liabilities Reflected on Balance Sheet under                    GAAP | 759                                          | 759 | - | - | - |
| Total                                                                                                   | 954                                          | 793 | 109 | 52 | - |

**Item          7A. Quantitative and Qualitative Disclosures about Market          Risk**

***Investments***

----

Table              of Contents

**Item          8. Financial Statements and Supplementary Data.**

**Report          of Independent Registered Public Accounting Firm**

**,**

----

Table              of Contents

**MERISEL,          INC. AND SUBSIDIARIES**

**CONSOLIDATED          BALANCE SHEETS **

**(In          thousands, except share data) **

|                                                                                                                                                                                                                                                                                                                   |   | **December                    31,** |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------|
|                                                                                                                                                                                                                                                                                                                   |   | **2003**                            |     | **2004** |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                             |   |                                |     |   |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |
| Current                    assets:                                                                                                                                                                                                                                                                                     |   |                                |     |   |   |   |   |
| Cash                    and cash equivalents                                                                                                                                                                                                                                                                           |   | $                                   | 44,948   |   | $ | 46,861 |   |
| Restricted                    cash                                                                                                                                                                                                                                                                                     |   |                                | -        |   |   | 759 |   |
| Current                    assets of discontinued operations                                                                                                                                                                                                                                                           |   |                                | 19,663   |   |   | - |   |
| Prepaid                    expenses and other current assets                                                                                                                                                                                                                                                           |   |                                | -        |   |   | 256 |   |
| Total                    current assets                                                                                                                                                                                                                                                                                |   |                                | 64,611   |   |   | 47,876 |   |
| Non-current                    assets of discontinued operations                                                                                                                                                                                                                                                       |   |                                | 1,797    |   |   | - |   |
| Other                    assets                                                                                                                                                                                                                                                                                        |   |                                | 804      |   |   | 74 |   |
| Total                    assets                                                                                                                                                                                                                                                                                        |   | $                                   | 67,212   |   | $ | 47,950 |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                            |   |                                |     |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |   |   |
| Current                    liabilities:                                                                                                                                                                                                                                                                                |   |                                |     |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                                                                                    |   | $                                   | 1        |   | $ | 10 |   |
| Accrued                    liabilities                                                                                                                                                                                                                                                                                 |   |                                | 4,779    |   |   | 4,099 |   |
| Current                    liabilities of discontinued operations                                                                                                                                                                                                                                                      |   |                                | 17,019   |   |   | - |   |
| Total                    current liabilities                                                                                                                                                                                                                                                                           |   |                                | 21,799   |   |   | 4,109 |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |   |   |
| Long-term                    liabilities                                                                                                                                                                                                                                                                               |   |                                | 751      |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |   |   |
| Commitments                    and Contingencies                                                                                                                                                                                                                                                                       |   |                                |     |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                   |   |                                |     |   |   |   |   |
| Stockholders'                    equity:                                                                                                                                                                                                                                                                               |   |                                |     |   |   |   |   |
| Convertible                    preferred stock, $.01 par value; authorized 1,000,000 shares;150,000                    shares issued and outstanding                                                                                                                                                                   |   |                                | 19,882   |   |   | 21,521 |   |
| Common                    stock, $.01 par value; authorized 150,000,000 shares;                    8,026,375shares                    issued and 7,616,395 shares outstanding at December 31, 2003;8,033,875                    shares issued and 7,623,895 shares outstanding at December 31,                    2004 |   |                                | 80       |   |   | 80 |   |
| Additional                    paid-in capital                                                                                                                                                                                                                                                                          |   |                                | 278,300  |   |   | 277,375 |   |
| Accumulated                    deficit                                                                                                                                                                                                                                                                                 |   |                                | (252,799 | ) |   | (253,592 | ) |
| Treasury                    stock at cost, 409,980 shares repurchased as of December 31,                    2003 and                    2004                                                                                                                                                                      |   |                                | (851     | ) |   | (851 | ) |
| Unamortized                    deferred compensation                                                                                                                                                                                                                                                                   |   |                                | -        |   |   | (692 | ) |
| Accumulated                    other comprehensive loss                                                                                                                                                                                                                                                                |   |                                | 50       |   |   | - |   |
| Total                    stockholders' equity                                                                                                                                                                                                                                                                          |   |                                | 44,662   |   |   | 43,841 |   |
| Total                    liabilities and stockholders' equity                                                                                                                                                                                                                                                          |   | $                                   | 67,212   |   | $ | 47,950 |   |

----

Table              of Contents

**MERISEL,          INC. AND SUBSIDIARIES **

**CONSOLIDATED          STATEMENTS OF OPERATIONS**

**(In          thousands, except per share amounts) **

|                                                                                                                                                         |   | **For                    the Years Ended December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
| **Continuing                    Operations:**                                                                                                                |   | **2002**                                                |   | **2003** |   | **2004** |   |
| Selling,                    general and administrative expenses                                                                                              |   | $                                                       | 2,670  |   | $ | 2,602 |   | $ | 2,276 |   |
| Operating                    loss                                                                                                                            |   |                                                    | (2,670 | ) |   | (2,602 | ) |   | (2,276 | ) |
| Interest                    income, net                                                                                                                      |   |                                                    | 802    |   |   | 436 |   |   | 586 |   |
| Loss                    from continuing operations                                                                                                           |   |                                                    | (1,868 | ) |   | (2,166 | ) |   | (1,690 | ) |
| Income                    from discontinued operations                                                                                                       |   |                                                    | 8,978  |   |   | 4,926 |   |   | 3,540 |   |
| Loss                    on sale of software licensing operations                                                                                             |   |                                                    | -      |   |   | - |   |   | 2,643 |   |
| Net                    income (loss)                                                                                                                         |   | $                                                       | 7,110  |   | $ | 2,760 |   | $ | (793 | ) |
|                                                                                                                                                         |   |                                                    |   |   |   |   |   |   |   |   |
| Preferred                    stock dividends                                                                                                                 |   |                                                    | 1,399  |   |   | 1,514 |   |   | 1,639 |   |
| Net                    income (loss) available to common stockholders                                                                                        |   | $                                                       | 5,711  |   | $ | 1,246 |   | $ | (2,432 | ) |
|                                                                                                                                                         |   |                                                    |   |   |   |   |   |   |   |   |
| Net                    income (loss) per share (basic and diluted):Loss                    from continuing operations available to common stockholders  |   | $                                                       | (0.42  | ) | $ | (0.48 | ) | $ | (0.44 | ) |
| Discontinued                    operations:                                                                                                                  |   |                                                    |   |   |   |   |   |   |   |   |
| Income                    from discontinued operations                                                                                                       |   |                                                    | 1.16   |   |   | 0.64 |   |   | 0.47 |   |
| Loss                    on sale of software licensing operations                                                                                             |   |                                                    | -      |   |   | - |   |   | (0.35 | ) |
| Net                    income (loss) available to common stockholders                                                                                        |   | $                                                       | 0.74   |   | $ | 0.16 |   | $ | (0.32 | ) |
|                                                                                                                                                         |   |                                                    |   |   |   |   |   |   |   |   |
| Weighted                    average number of shares (basic and diluted):                                                                                    |   |                                                    | 7,735  |   |   | 7,617 |   |   | 7,620 |   |

----

Table              of Contents

**MERISEL,          INC. AND SUBSIDIARIES **

**CONSOLIDATED        STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY **

**(In        thousands, except share data) **

|                                                                                    |   |    **Preferred                  Stock** |    |    **Common                  Stock** |   |  **Additional****Paid-in****Capital** |   |   **Deferred                  Compensation** |      |   **Accumulated                  Deficit** |   | **Accumulated****Other****Comprehensive****Loss** |   |    **Treasury                  Stock** |    |    **Total** |   |  **Comprehensive****Income** |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|-----------------------------------------------------|--------|--------------------------------------------|--------|--------------------------------------------------------|-----------|------------------------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------|---------|-----------------------------|--------|-----------------------------------|--------|
|                                                                                    |   | **Shares**                                             |    | **Amount**                                          |   | **Shares**                                 |   | **Amount**                                             |      |                                                 |   |                                              |   |                                                  |    |                        |   | **Shares**                        |   | **Amount** |   |   |   |   |   |
| **Balance                  at December 31, 2001**                                       |   |                                                   | 150,000 |                                                | $      | 16,969                                     |   |                                                   | 8,025,375 |                                                 | $      | 80                                                |   | $                                                     | 281,343 |                        |   | -                                 |   | $ | (262,669 | ) |   | - |   |   | (188,200 | ) | $ | (328 | ) | $ | 35,395 |   |   |
| Accumulation                  of convertible preferred stock dividend                   |   |                                                   |    |                                                |   | 1,399                                      |   |                                                   |      |                                                 |   |                                              |   |                                                  | (1,399  | )                           |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of restricted stock grant                                     |   |                                                   |    |                                                |   |                                       |   |                                                   | 1,000     |                                                 |   |                                              |   |                                                  | (130    | )                           |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (130 | ) |   |
| Treasury                  Stock                                                         |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   | (219,080 | ) |   | (516 | ) |   | (516 | ) |   |
| Comprehensive                  Income:                                                  |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                  loss on investments                                         |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   | $ | (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                                     |   |                                                   | 8,026,375 |                                                 | $      | 80                                                |   | $                                                     | 279,814 |                        |   | -                                 |   | $ | (255,559 | ) | $ | (109 | ) |   | (407,280 | ) | $ | (844 | ) | $ | 41,750 |   |   |
| Accumulation                  of convertible preferred stock dividend                   |   |                                                   |    |                                                |   | 1,514                                      |   |                                                   |      |                                                 |   |                                              |   |                                                  | (1,514  | )                           |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury                  Stock                                                         |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   | (2,700 | ) |   | (7 | ) |   | (7 | ) |   |
| Comprehensive                  Income:                                                  |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                  gain on investments                                         |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   | 159 |   |   |   |   |   |   |   |   | 159 |   | $                  159 |
| Net                  income                                                             |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   | 2,760 |   |   |   |   |   |   |   |   |   |   |   | 2,760 |   | 2,760 |
| Total                  Comprehensive Income                                             |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $2,919 |
| **Balance                  at December 31, 2003**                                       |   |                                                   | 150,000 |                                                | $      | 19,882                                     |   |                                                   | 8,026,375 |                                                 | $      | 80                                                |   | $                                                     | 278,300 |                        |   | -                                 |   | $ | (252,799 | ) | $ | 50 |   |   | (409,980 | ) | $ | (851 | ) | $ | 44,662 |   |   |
| Accumulation                  of convertible preferred stock dividend                   |   |                                                   |    |                                                |   | 1,639                                      |   |                                                   |      |                                                 |   |                                              |   |                                                  | (1,639  | )                           |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                  of stock options                                              |   |                                                   |    |                                                |   |                                       |   |                                                   | 7,500     |                                                 |   |                                              |   |                                                  | 15      |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 15 |   |   |
| Deferred                  compensation                                                  |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  | 7       |                        | $      | (7                                | )      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of deferred compensation                                  |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   | 7                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7 |   |   |
| Grant                  of restricted stock                                              |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  | 692     |                        |   | (692                              | )      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  Income:                                                  |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification                  for net gains realized in net                  income |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   | (50 | ) |   |   |   |   |   |   |   | (50 | ) | $(50) |
| Net                  loss                                                               |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   | (793 | ) |   |   |   |   |   |   |   |   |   |   | (793 | ) | (793) |
| Total                  Comprehensive Income                                             |   |                                                   |    |                                                |   |                                       |   |                                                   |      |                                                 |   |                                              |   |                                                  |    |                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $(843) |
| **Balance                  at December 31, 2004**                                       |   |                                                   | 150,000 |                                                | $      | 21,521                                     |   |                                                   | 8,033,875 |                                                 | $      | 80                                                |   | $                                                     | 277,375 |                        | $      | (692                              | )      | $ | (253,592 | ) | $ | 0 |   |   | (409,980 | ) | $ | (851 | ) | $ | 43,841 |   |   |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES **

**CONSOLIDATED        STATEMENTS OF CASH FLOWS **

**(In        thousands) **

|                                                                                                                      |   | **For                  the Years Ended December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                                                      |   | **2002**                                              |   | **2003** |   | **2004** |   |
| CONTINUING                  OPERATIONS                                                                                    |   |                                                  |   |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                                    |   |                                                  |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                                                        |   | $                                                     | 7,110  |   | $ | 2,760 |   | $ | (793 | ) |
| Add:                  Loss on sale of software licensing business                                                         |   |                                                  | -      |   |   | - |   |   | 2,643 |   |
| Less:                  income from discontinued operations, net                                                           |   |                                                  | 8,978  |   |   | 4,926 |   |   | 3,540 |   |
| Loss                  from continuing operations                                                                          |   |                                                  | (1,868 | ) |   | (2,166 | ) |   | (1,690 | ) |
| Adjustments                  to reconcile loss from operations to net cash used in operating                  activities: |   |                                                  |   |   |   |   |   |   |   |   |
| Non-cash                  deferred compensation                                                                           |   |                                                  | 529    |   |   | 223 |   |   | (50 | ) |
| Restricted                  stock units compensation income (loss)                                                        |   |                                                  | (133   | ) |   | - |   |   | 9 |   |
| Changes                  in assets and liabilities:                                                                       |   |                                                  |   |   |   |   |   |   |   |   |
| Prepaid                  expenses and other current assets                                                                |   |                                                  | (1     | ) |   | 39 |   |   | (285 | ) |
| Accounts                  payable                                                                                         |   |                                                  | -      |   |   | 1 |   |   | 9 |   |
| Accrued                  liabilities                                                                                      |   |                                                  | 30     |   |   | (789 | ) |   | (1,432 | ) |
| Net                  cash used in operating activities                                                                    |   |                                                  | (1,443 | ) |   | (2,692 | ) |   | (3,439 | ) |
|                                                                                                                      |   |                                                  |   |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                    |   |                                                  |   |   |   |   |   |   |   |   |
| Purchase                  of securities                                                                                   |   |                                                  | (636   | ) |   | (63 | ) |   | - |   |
| Net                  cash used in investing activities                                                                    |   |                                                  | (636   | ) |   | (63 | ) |   | - |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                    |   |                                                  |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of common stock                                                                   |   |                                                  | -      |   |   | - |   |   | 15 |   |
| Purchase                  of treasury stock                                                                               |   |                                                  | (516   | ) |   | (7 | ) |   | - |   |
| Net                  cash provided by (used in) financing activities                                                      |   |                                                  | (516   | ) |   | (7 | ) |   | 15 |   |
|                                                                                                                      |   |                                                  |   |   |   |   |   |   |   |   |
| Cash                  used for Continuing Operations                                                                      |   |                                                  | 2,595  |   |   | 2,762 |   |   | 3,424 |   |
|                                                                                                                      |   |                                                  |   |   |   |   |   |   |   |   |
| DISCONTINUED                  OPERATIONS                                                                                  |   |                                                  |   |   |   |   |   |   |   |   |
| Cash                  provided by (used in) discontinued operations                                                       |   |                                                  | (6,793 | ) |   | 890 |   |   | 5,202 |   |
| Cash                  provided by investing activities                                                                    |   |                                                  | 605    |   |   | 25 |   |   | 135 |   |
| NET                  CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS                                                   |   |                                                  | (6,188 | ) |   | 915 |   |   | 5,337 |   |
|                                                                                                                      |   |                                                  |   |   |   |   |   |   |   |   |
| NET                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                     |   |                                                  | (8,783 | ) |   | (1,847 | ) |   | 1,913 |   |
| CASH                  AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                             |   |                                                  | 55,578 |   |   | 46,795 |   |   | 44,948 |   |
| CASH                  AND CASH EQUIVALENTS, END OF PERIOD YEAR                                                            |   | $                                                     | 46,795 |   | $ | 44,948 |   | $ | 46,861 |   |
|                                                                                                                      |   |                                                  |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:                                                        |   |                                                  |   |   |   |   |   |   |   |   |
| Cash                  paid during the year for:                                                                           |   |                                                  |   |   |   |   |   |   |   |   |
| Income                  taxes                                                                                             |   | $                                                     | -      |   | $ | - |   | $ | - |   |
| Noncash                  investing and financing activities:                                                              |   |                                                  |   |   |   |   |   |   |   |   |
| Sale                  of property for note receivable                                                                     |   |                                                  | 2,975  |   |   | - |   |   | - |   |
| Preferred                  dividend accumulated                                                                           |   |                                                  | 1,399  |   |   | 1,514 |   |   | 1,639 |   |
| Unrealized                  (gain) loss on securities                                                                     |   |                                                  | 109    |   |   | (159 | ) |   | - |   |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **

**DECEMBER        31, 2002, 2003 and 2004 **

**1.        Description of Business and Basis of Presentation **

*General*

*Management’s        Plans*

| **2.  ** | **Summary                  of Significant Accounting                  Policies** |
|--------------------|----------------------------------------------------------------------------------|

*Use        of Estimates*

*Consolidation        Policy*

*Cash        and Cash Equivalents*

*Property        and Depreciation*

*Investments*

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

*Impairment        of Long-Lived Assets*

*Income        Taxes*

*Fair        Values of Financial Instruments*

*Revenue        Recognition, Returns and Sales Incentives*

*Accounting        for Stock-Based Compensation*

|                                                                                                                                              |   | (In                  thousands, except per share amounts) |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                                                                                              |   | **2002**                                                  |   | **2003** |   | **2004** |   |
| Net                  income (loss) available to common stockholders - As                  Reported                                                |   | $                                                         | 5,711  |   | $ | 1,246 |   | $ | (2,432 | ) |
| Deduct:                  Total stock-based employee compensation expense determined                  under fair value based method for all awards |   |                                                      | (3     | ) |   | (3 | ) |   | (62 | ) |
| Net                  income (loss) - Pro Forma                                                                                                    |   | $                                                         | 5,708  |   | $ | 1,243 |   | $ | (2,494 | ) |
|                                                                                                                                              |   |                                                      |   |   |   |   |   |   |   |   |
| Net                  income (loss) available to shareholders Per Share (Basic &                  Diluted):                                    |   |                                                      |   |   |   |   |   |   |   |   |
| As                  Reported                                                                                                                      |   | $                                                         | 0.74   |   | $ | 0.16 |   | $ | (0.32 | ) |
| Pro                  Forma                                                                                                                        |   | $                                                         | 0.74   |   | $ | 0.16 |   | $ | (0.33 | ) |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

*Reclassifications*

*New        Accounting Pronouncements*

| **3.  ** | **Property                  and Equipment** |
|--------------------|---------------------------------------------|

| **4.  ** | **Accrued                  Expenses** |
|--------------------|---------------------------------------|

|                                                         |   | **2003** |   | **2004** |   |
|--------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Accrued                  liabilities:**                    |   |     |   |
| Lease                  commitments and other accruals        |   | $        | 2,458  |     | $      | 1,259 |   |
| Compensation                  and other benefit accruals     |   |     | 960    |     |   | 552 |   |
| Deferred                  Compensation                       |   |     | -      |     |   | 759 |   |
| State                  and local sales taxes and other taxes |   |     | 1,361  |     |   | 1,529 |   |
| Total                  accrued liabilities                   |   | $        | 4,779  |     | $      | 4,099 |   |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

| **5.  ** | **Income                  Taxes** |
|--------------------|-----------------------------------|

|                                      |   | **For                  the Years Ended December 31,** |   |
|-------------------------------------------|--------|-------------------------------------------------------|--------|
|                                      |   | **2002**                                              |   | **2003** |   | **2004** |   |
| Discontinued                  Operations: |   |                                                  |   |   |   |   |   |   |   |   |
| Federal                                   |   | $                                                     | (920   | ) | $ | (909 | ) | $ | - |   |
| State                                     |   |                                                  | -      |   |   | - |   |   | - |   |
| Total                  provision          |   | $                                                     | (920   | ) | $ | (909 | ) | $ | - |   |
|                                      |   |                                                  |   |   |   |   |   |   |   |   |
|                                      |   |                                                  |   |   |   |   |   |   |   |   |

|                                  |   | **December                  31,** |    |
|---------------------------------------|--------|-----------------------------------|---------|
|                                  |   | **2003**                          |    | **2004** |   |
| Net                  operating loss   |   | $                                 | 93,221  |   | $ | 101,471 |   |
| Expense                  accruals     |   |                              | 2,264   |   |   | 684 |   |
|                                  |   |                              | 95,485  |   |   | 102,155 |   |
| Valuation                  allowances |   |                              | (95,485 | ) |   | (102,155 | ) |
| Total                                 |   | $                                 | -       |   | $ | - |   |

| **6.  ** | **Discontinued                  Operations** |
|--------------------|----------------------------------------------|

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

|                                             |   | **2003** |   |
|--------------------------------------------------|--------|----------|--------|
| Accounts                  receivable, net        |   | $        | 19,585 |   |
| Inventory,                  net                  |   |     | 13     |   |
| Prepaid                  expenses                |   |     | 65     |   |
| Total                  current assets            |   |     | 19,663 |   |
| Property,                  plant & equipment |   |     | 883    |   |
| Other                  assets                    |   |     | 914    |   |
| Total                  assets                    |   | $        | 21,460 |   |
|                                             |   |     |   |   |
| Accounts                  payable                |   | $        | 13,882 |   |
| Accrued                  expenses                |   |     | 3,137  |   |
| Total                  liabilities               |   | $        | 17,019 |   |
|                                             |   |     |   |   |

|                                                            |   | **2002** |   | **2003** |   | **2004** |   |
|-----------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Net                  Sales                                      |   | $        | 82,743 |     | $      | 96,042   |   | $ | 38,101 |   |
| Cost                  of Sales                                  |   |     | 72,472 |     |   | 90,763   |   |   | 34,505 |   |
| Gross                  Profit                                   |   |     | 10,271 |     |   | 5,279    |   |   | 3,596 |   |
|                                                            |   |     |   |     |   |     |   |   |   |   |
| Selling,                  General & Administrative Expenses |   |     | 2,808  |     |   | 1,601    |   |   | 1,215 |   |
| Restructuring                  Charge (Recovery)                |   |     | (244   | )        |   | 650      |   |   | (1,093 | ) |
| Impairment                  Charge                              |   |     | -      |     |   | 1,800    |   |   | 130 |   |
| Operating                  Income                               |   |     | 7,707  |     |   | 1,228    |   |   | 3,344 |   |
|                                                            |   |     |   |     |   |     |   |   |   |   |
| Interest                  Income                                |   |     | 182    |     |   | 315      |   |   | 153 |   |
| Other                  Income                                   |   |     | 169    |     |   | 2,474    |   |   | 135 |   |
| Income                  before Provision for Income Tax         |   |     | 8,058  |     |   | 4,017    |   |   | 3,632 |   |
|                                                            |   |     |   |     |   |     |   |   |   |   |
| Income                  Tax Benefit (provision)                 |   |     | 920    |     |   | 909      |   |   | (92 | ) |
| Net                  Income                                     |   | $        | 8,978  |     | $      | 4,926    |   | $ | 3,540 |   |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

| **7.  ** | **Commitments                  and Contingencies** |
|--------------------|----------------------------------------------------|

| **(in                  thousands)**          |
|----------------------------------------------|
| **Year                  Ending December 31** | **Operating                  Leases** |
| 2005                                         | 51 |
| Total                                        | 51 |

| **8.  ** | **Stock** |
|--------------------|-----------|

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

| **9.  ** | **Employee                  Stock Options and Benefit                  Plans** |
|--------------------|--------------------------------------------------------------------------------|

*Employee        Stock Options*

|                                                                                                                                             |   | **2002**               |    | **2003**                                                |   | **2004**               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|---------------------------------------------------------|--------|------------------------|--------|
| ** **                                                                                                                                       |   |   **Shares** |    | **Weighted****Average****Exer.                  Price** |   |   **Shares** |   | **Weighted****Average****Exer.                  Price** |   |   **Shares** |   | **Weighted****Average****Exer.                  Price** |   |
| Outstanding                  atBeginning                  of year                                                                                |   |                   | 204,965 |                                                    |   | 27.10                  |   |   | 179,270 |   |   | 26.46 |   |   | 80,945 |   |   | 18.04 |   |
| Granted                                                                                                                                          |   |                   | -       |                                                    |   |                   |   |   | - |   |   |   |   |   | 300,000 |   |   | 8.33 |   |
| Exercised                                                                                                                                        |   |                   | (1,000  | )                                                       |   |                   |   |   | - |   |   |   |   |   | (7,500 | ) |   | 2.00 |   |
| Canceled                                                                                                                                         |   |                   | (24,695 | )                                                       |   | 32.82                  |   |   | (98,325 | ) |   | 33.39 |   |   | (31,065 | ) |   | 20.59 |   |
| Outstanding                  at endof                  year                                                                                      |   |                   | 179,270 |                                                    |   | 26.46                  |   |   | 80,945 |   |   | 18.04 |   |   | 342,380 |   |   |   |   |
|  Options                  exercisable at year end                                                                                           |   |                   | 151,770 |                                                    |   |                   |   |   | 60,945 |   |   |   |   |   | 42,380 |   |   |   |   |
| Weighted                  average fairvalue                  at date of grantof                  options grantedduring                  the year |   |                   | N/A     |                                                    |   |                   |   |   | N/A |   |   |   |   |   | 2.97 |   |   |   |   |

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

|                                 |   | **Options                  Outstanding** |    | ** ****Options                  Exercisable** |   |
|--------------------------------------|--------|------------------------------------------|---------|----------------------------------------------------|--------|
| ** **                           |   | ** **                               |    | **Weighted**                                       |   | ** ** |   | ** ** |   | ** ** |   |
| ** **                           |   | ** **                               |    | **Average**                                        |   | **Weighted** |   | ** ** |   | **Weighted** |   |
| ** **                           |   | **Number**                               |    | **Remaining**                                      |   | **Average** |   | **Number** |   | **Average** |   |
| **Range                  of**        |   | **Outstanding**                          |    | **Life**                                           |   | **Exercise** |   | **Exercisable** |   | **Exercise** |   |
| **Exercise                  Prices** |   | **at                  12/31/04**         |    | **In                  Years**                      |   | **Price** |   | **at                  12/31/04** |   | **Price** |   |
|                                 |   |                                     |    |                                               |   |   |   |   |   |   |   |
| $58.75                  to $58.75    |   |                                     | 200     |                                               |   | 1 |   | $ | 58.75 |   |   | 200 |   | $ | 58.75 |   |
| $18.75                  to $19.38    |   |                                     | 1,400   |                                               |   | 2 |   | $ | 19.29 |   |   | 1,400 |   | $ | 19.29 |   |
| $23.10                  to $43.10    |   |                                     | 655     |                                               |   | 3 |   | $ | 23.10 |   |   | 655 |   | $ | 23.10 |   |
| $40.60                  to $40.60    |   |                                     | 125     |                                               |   | 4 |   | $ | 40.60 |   |   | 125 |   | $ | 40.60 |   |
| $17.50                  to $22.19    |   |                                     | 40,000  |                                               |   | 6 |   | $ | 18.67 |   |   | 40,000 |   | $ | 18.67 |   |
| $5.00                  to $12.00     |   |                                     | 300,000 |                                               |   | 10 |   | $ | 8.33 |   |   | - |   |   |   |   |
|                                 |   |                                     |    |                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| $2.00                  to $150.00    |   |                                     | 342,380 |                                               |   |  |   |   |   |   |   | 42,380 |   |   |   |   |

|                                     |   | **2004** |   |
|------------------------------------------|--------|----------|--------|
| Expected                  life           |   |     | 5.0    |   |
| Expected                  volatility     |   |     | 94.36  | % |
| Risk-free                  interest rate |   |     | 2.39   | % |
| Dividend                  Yield     |   |     | 0.00   | % |

*Benefit        Plan*

*Stock        repurchase program*

| **10.  ** | **Earnings                  Per Share** |
|---------------------|-----------------------------------------|

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) **

|                                                 | **For                  the Years Ended December 31,** |
|------------------------------------------------------|-------------------------------------------------------|
| Weighted                  average shares outstanding | **2002**                                              | **2003** | **2004** |
| Basic                  and diluted                   | 7,735                                                 | 7,617 | 7,620 |

|                                                                |   | **2002** | ** ** | **2003** | ** ** | **2004** |   |
|---------------------------------------------------------------------|--------|----------|------------|----------|------------|----------|--------|
| Loss                  from operations                               |   | $        | (1,868     | )        | $          | (2,166   | )      | $ | (1,690 | ) |
| Preferred                  stock dividends                          |   |     | 1,399      |     |       | 1,514    |   |   | 1,639 |   |
| Loss                  to common stockholders                        |   |     | (3,267     | )        |       | (3,680   | )      |   | (3,329 | ) |
| Income                  from discontinued operations                |   |     | 8,978      |     |       | 4,926    |   |   | 3,540 |   |
| Loss                  on sale of software licensing business        |   |     | -          |     |       | -        |   |   | 2,643 |   |
| Net                  income (loss) available to common stockholders |   | $        | 5,711      |     | $          | 1,246    |   | $ | (2,432 | ) |

| **11.  ** | **Related                  Party Transactions** |
|---------------------|-------------------------------------------------|

| **12.  ** | **Quarterly                  Financial Data (Unaudited)** |
|---------------------|-----------------------------------------------------------|

|                                                       |   | **2003**                      |   |
|------------------------------------------------------------|--------|-------------------------------|--------|
|                                                       |   | **March                  31** |   | **June                  30** |   | **September                  30** |   | **December                  31** |   |
| Loss                  from operations                 |   | $                             | 493    |   | $ | 463 |   | $ | 504 |   | $ | 706 |   |
| Income                  from discontinued operations  |   |                          | 1,445  |   |   | 898 |   |   | 1,568 |   |   | 1,015 |   |
| Net                  income                                |   | $                             | 952    |   | $ | 435 |   | $ | 1,064 |   | $ | 309 |   |
|                                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  per share:**                   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from operations                      |   | $                             | 0.11   |   | $ | 0.11 |   | $ | 0.12 |   | $ | 0.14 |   |
| Income                  from discontinued operations  |   |                          | 0.19   |   |   | 0.12 |   |   | 0.21 |   |   | 0.12 |   |
| Net                  income(loss)                     |   | $                             | 0.08   |   | $ | 0.01 |   | $ | 0.09 |   | $ | (0.02 | ) |

|                                                              |   | **2004**                      |   |
|-------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                              |   | **March                  31** |   | **June                  30** |   | **September                  30** |   | **December                  31** |   |
| Loss                  from operations                        |   | $                             | 400    |   | $ | 594 |   | $ | 392 |   | $ | 304 |   |
| Loss                  on sale of software licensing          |   |                          | -      |   |   | - |   |   | 2,643 |   |   | - |   |
| Income                  (loss) from discontinued operations  |   |                          | 1,466  |   |   | 207 |   |   | 3,002 |   |   | (1,135 | ) |
| Net                  income (loss)                                |   | $                             | 1,066  |   | $ | (387 | ) | $ | (33 | ) | $ | (1,439 | ) |
|                                                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  per share:**                          |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from operations                             |   | $                             | 0.11   |   | $ | 0.13 |   | $ | 0.10 |   | $ | 0.10 |   |
| Loss                  on sale of software licensing          |   |                          | -      |   |   | - |   |   | 0.35 |   |   | - |   |
| Income                  (loss) from discontinued operations  |   |                          | 0.19   |   |   | 0.02 |   |   | 0.39 |   |   | (0.15 | ) |
| Net                  income (loss)                           |   | $                             | 0.08   |   | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.25 | ) |

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) **

| **13.  ** | **Subsequent                  Events** |
|---------------------|----------------------------------------|

** **

----

Table            of Contents

**MERISEL,        INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) **

----

Table            of Contents

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

**Item        9A. Controls and Procedures**

**Item        9B. Other Information.**

----

Table            of Contents

**PART        III**

**Item        10. Directors and Executive Officers of the        Registrant.**

| Name                                               | Age | Position                                                                      |
|----------------------------------------------------|-----|-------------------------------------------------------------------------------|
| Rajiv                  Garg                        | 46  | Executive                  Vice President of Merisel Americas                 |
| John                  Sheehan                      | 51  | President                  of Color Edge                                      |
| Donald                  R. Uzzi                    | 53  | Chairman                  of the Board, Chief Executive Officer and President |
| Allyson                  Vanderford                | 37  | Chief                  Financial Officer                                      |
| Ken                  Wasserman                     | 45  | President                  of Comp 24                                         |
| Ronald                  P. Badie (1)               | 62  | Director                                                                      |
| Albert                  J. Fitzgibbons III (2) (3) | 60  | Director                                                                      |
| Bradley                  J. Hoecker (2)            | 43  | Director                                                                      |
| Dr.                  Arnold Miller (1)(3)          | 77  | Director                                                                      |
| Lawrence                  J. Schoenberg (1)(2)(3)  | 73  | Director                                                                      |

**    Rajiv        Garg**

**    John        Sheehan**

**    Donald        R.        Uzzi**

**    Allyson        Vanderford**

**    Kenneth        Wasserman**

**    Ronald        P.        Badie**

**    Albert        J.        Fitzgibbons III**
* *

**    Bradley        J.        Hoecker**

**    Dr.        Arnold        Miller**

**    Lawrence        J.        Schoenberg**
* *

** **

----

Table            of Contents

**Section        16(a) Beneficial Ownership Reporting Compliance**

**Code        of Business Conduct**

**Item        11. Executive Compensation.**

**Summary        Compensation Tabl**
***e***

|                                                                                                                                                                                                        |     |                                       |       |                                             | **Long                    Term Compensation Awards** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------------------------------|------------|--------------------------------------------------|------------------------------------------------------|
|                                                                                                                                                                                                        |     | **Annual                    Compensation** |       |                                             |                                                 |
| **Name                    and Principal Position**                                                                                                                                                          | **Year** | **Salary**                                 | **Bonus**  | **Other                    Annual Compensation** | **Restricted                    Stock Awards**       | **Stock                    Options** | **All                    Other Compensation (1)** |
| Donald                    R. Uzzi (2) Chief                    Executive Officer and President                                                                                                              | 2004     | $19,230                                    | -          | $100,000(3)                                      | $696,000(4)                                          | 300,000 | - |
|                                                                                                                                                                                                        |     |                                       |       |                                             |                                                 |   |   |
| Timothy                    N. Jenson(5)Former                    Chief ExecutiveOfficer,                    President, ChiefFinancial                    Officer and Assistant                    Secretary | 2004(6)  | 361,363(6)                                 | 421,094(7) | -                                                | -                                                    | - | 221,144 |
| 2003                                                                                                                                                                                                        | 400,000  | 661,590                                    | -          | -                                                | -                                                    | 6,000 |
| 2002                                                                                                                                                                                                        | 400,000  | (7)                                        | -          | -                                                | -                                                    | 5,500 |
|                                                                                                                                                                                                        |     |                                       |       |                                             |                                                 |   |
|                                                                                                                                                                                                        |     |                                       |       |                                             |                                                 |   |
|                                                                                                                                                                                                        |     |                                       |       |                                             |                                                 |   |   |
| Allyson                    VanderfordVice                    President, Financeand                    Treasurer                                                                                             | 2004     | 150,258                                    | 17,250     | -                                                | -                                                    | - | 5,600 |
| 2003                                                                                                                                                                                                        | 139,321  | 50,000                                     | -          | -                                                | -                                                    | 5,679 |
| 2002                                                                                                                                                                                                        | 124,038  | 50,000                                     | -          | -                                                | -                                                    | 5,221 |
|                                                                                                                                                                                                        |     |                                       |       |                                             |                                                 |   |   |
| Traci                    Barnett(8)Former                    Vice PresidentSales                    and Marketing                                                                                           | 2004     | 133,507                                    | -          | -                                                | -                                                    | - | 2,908 |
| 2003                                                                                                                                                                                                        | 179,769  | 50,000                                     | -          | -                                                | -                                                    | 6,000 |
| 2002                                                                                                                                                                                                        | 170,961  | 61,500                                     | -          | -                                                | -                                                    | 5,500 |

| (1)   | Consists                  of amounts contributed by the Company to its 401(k) plan. In Mr.                  Jenson’s                  case, reported amount also consists of the following amounts paid                  in                  February 2005 pursuant to the settlement agreement with the Company:                  $200,000 in severance payments and $15,644 in COBRA reimbursements. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Mr.                  Uzzi’s employment with the Company commenced on November 22, 2004. |
|-----------------|-----------------------------------------------------------------------------------------------|

| (3)   | Consists                  of relocation allowance paid in January 2005 pursuant to Mr. Uzzi’s                  employment agreement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Consists                  of 150,000 restricted shares of Common Stock valued at $960,000                  based upon                  the closing market price on December 31,                  2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Mr.                  Jenson’s employment with the Company ceased effective November 22, 2004. |
|-----------------|-----------------------------------------------------------------------------------------------------|

| (6)   | Includes                  $37,692 in accrued vacation paid in connection with a settlement                  agreement with Mr. Jenson. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Consists                  of bonus compensation payable pursuant to a retention agreement                  with Mr.                  Jenson. See “Employment and Change of Control Arrangements” below.                  Portions of such bonus payments were deferred by Mr. Jenson pursuant                  to a                  deferred compensation agreement. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Ms.                  Barnett’s employment with the Company terminated on July 9,                  2004. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

**Option        Grants in Last Fiscal Year**

----

Table            of Contents

|                                         |   | **Individual                  Grants**                                           |    | **Potential                  Realizable Value at Assumed Annual Rates of Price Appreciation                  for Option                  Term****(1)** |   |
|----------------------------------------------|--------|----------------------------------------------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Name**                                     |   | **Number                  of****Securities****Underlying****Options****Granted** |    | **Percent                  of****Total                  Options****Granted                  to****Employees****in                  2004**              |   |  **Exercise                  or****Base                  Price****Per                  Share** |   | **Expiration****Date** |   |  **5%** |   | **10%** |   |
| Donald                  R. Uzzi         |   |                                                                             | 100,000 |                                                                                                                                                   |   | 33.3 | % | $ | 5.00 |   |   | 11/22/14 |   | $ | 250,920 |   | $ | 955,090 |   |
|                                         |   |                                                                             | 100,000 |                                                                                                                                                   |   | 33.3 | % | $ | 8.00 |   |   | 11/22/14 |   |   | - |   | $ | 655,090 |   |
|                                         |   |                                                                             | 100,000 |                                                                                                                                                   |   | 33.3 | % | $ | 12.00 |   |   | 11/22/14 |   |   | - |   | $ | 255,090 |   |
| Timothy                  N. Jenson (2)  |   |                                                                             | -       |                                                                                                                                                   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allyson                  Vanderford     |   |                                                                             | -       |                                                                                                                                                   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Traci                  Barnett (3)      |   |                                                                             | -       |                                                                                                                                                   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |

**Aggregated        Option Exercises in 2004 and Value of Options at 2004 Year        End**

|                                   |                                                   |                                     | **Number                  of Securities** | **Value                  of Unexercised**    |
|----------------------------------------|--------------------------------------------------------|------------------------------------------|-------------------------------------------|----------------------------------------------|
|                                   | **Shares****Acquired                  on****Exercise** | **Value****Realized**                    | **Underlying**                            | **In-the-Money                  Options at** |
|                                   | **Options                  at Fiscal Year End**        | **Fiscal                  Year End (1)** |
| **Name**                               | **Exercisable**                                        | **Unexercisable**                        | **Exercisable**                           | **Unexercisable**                            |
| Donald                  R. Uzzi        | -                                                      | -                                        | ---                                       | 300,000                                      | $--- | $141,000 |
| Timothy                  N. Jenson (2) | -                                                      | -                                        | 11,700                                    | ---                                          | --- | --- |
| Allyson                  Vanderford    | -                                                      | -                                        | ---                                       | ---                                          | --- | --- |
| Traci                  Barnett (3)     | 7,500                                                  | $15,794                                  | ---                                       | ---                                          | --- | --- |

| (1) | Values                  for “in-the-money” outstanding options represents the positive spread                  between the exercises prices and $6.40, the closing price of the                  common                  stock on December 31, 2004 as reported on the Pink Sheets. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                  Jenson’s employment with the Company ceased effective November 22,                  2004. |
|-----|----------------------------------------------------------------------------------------------------------------------|

| (3) | Ms.                  Barnett’s employment with the Company ceased effective July 9, 2004. |
|-----|-------------------------------------------------------------------------------------------------|

----

Table            of Contents

**Compensation        Committee Interlocks and Insider Participation**

**Director        Compensation**

**Employment        and Change of Control Arrangements**

** **

----

Table            of Contents

**Item        12. Security Ownership of Certain Beneficial Owners and        Management and Related Stockholder Matters.**

|                                                                                                                                               |  **Shares                  Beneficially Owned**  |
|----------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
|  **Name**                                                                                                                                |  **Number**                                      |  **Percentage**  |
| Phoenix                  Acquisition Company II, L.L.C. (1)(7)767                  5th Avenue, 48th FloorNew                  York, New York 10153 |                                                       | 6,279,432 |   |   | 68.23                  % |
| Ronald                  P. Badie                                                                                                                   |                                                       | - |   |   | * |
| Traci                  Barnett (8)                                                                                                                 |                                                       | - |   |   | * |
| Albert                  J. Fitzgibbons III (2)                                                                                                     |                                                       | - |   |   | * |
| Rajiv                  Garg                                                                                                                        |                                                       | - |   |   | * |
| Bradley                  J. Hoecker (2)                                                                                                            |                                                       | - |   |   | * |
| Timothy                  N. Jenson (8)                                                                                                             |                                                       | 109,415 |   |   | 1.19% |
| Dr.                  Arnold Miller (3)                                                                                                             |                                                       | 300 |   |   | * |
| Lawrence                  J. Schoenberg (3)                                                                                                        |                                                       | 36,158 |   |   | * |
| John                  J. Sheehan                                                                                                                   |                                                       | - |   |   | * |
| Donald                  R. Uzzi (4)                                                                                                                |                                                       | 300,000 |   |   | 3.26% |
| Allyson                  Vanderford (5)                                                                                                            |                                                       | 3,852 |   |   | * |
| Kenneth                  Wasserman                                                                                                                 |                                                       | - |   |   | * |
| All                  Directors and Executive Officers (6)as                  a Group (12 Persons)                                                  |                                                       | 449,725 |   |   | 4.89% |

| (1)   | All                  information regarding share ownership is taken from and furnished                  in                  reliance upon the Schedule 13D filed by Phoenix pursuant to Section                  13(d)                  of the Securities Exchange Act of 1934. Stonington Capital Appreciation                  1994 Fund, L.P. (the “Fund”) is the sole member of Phoenix. Stonington                  Partners, L.P. (“Stonington LP”) is the general partner of the Fund, and                  Stonington Partners, Inc. II (“Stonington II”) is the general partner of                  Stonington LP. The Fund is managed by Stonington. The following                  individuals are the directors and/or officers of Stonington and                  Stonington                  II and have shared voting and dispositive powers with respect to                  the                  Common Stock held by Phoenix: Alexis P. Michas; James J. Burke,                  Jr.;                  Albert J. Fitzgibbons III; and Bradley J. Hoecker. Stonington LP,                  Stonington II, Stonington and each of the directors and officers                  of                  Stonington II and Stonington disclaim beneficial ownership of these                  shares. The business address of each of Phoenix, Stonington and                  their                  directors and officers is 767 5th                  Avenue, 48th                  Floor, New York, New York 10153. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Each                  of Messrs. Fitzgibbons and Hoecker is a director or partner of                  certain                  affiliates of Phoenix Acquisition Company II, L.L.C. (“Phoenix”) and,                  therefore, may be deemed to beneficially own the 6,170,409 shares                  of                  Common Stock beneficially owned by Phoenix. Each of Messrs. Fitzgibbons                  and Hoecker disclaims such beneficial ownership. The address of                  each of                  Messrs. Fitzgibbons and Hoecker is the same as that given for                  Phoenix. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Includes                  100 shares issuable with respect to stock options exercisable within                  60                  days after September 23, 2005. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes                  150,000 shares issuable with respect to stock options exercisable                  within                  60 days of September 23, 2005. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Includes                  shares held in the Company’s 401(k) plan for the accounts of the following                  individuals: Mr. Jenson - 8,155; Ms. Vanderford - 2,352. The                  administrative committee of the Company’s 401(k) plan directs the voting                  of shares held in the plan. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Includes                  200 shares issuable with respect to stock options held by Dr. Miller                  and                  Mr. Schoenberg and 150,000 shares issuable with respect to stock                  options                  held by Mr. Uzzi exercisable within 60 days after September 23,                  2005. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Includes                  1,229,750 shares of common stock into which the convertible preferred                  stock beneficially owned by Phoenix is convertible within 60 days                  after                  September 23, 2005. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Number                  of shares owned by terminated employees assumed to be same number                  as last                  reported prior to termination. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

***Equity        Compensation Plan Information***

|                                                                |      | **Number of securities**** to                  be issued upon exercise of outstanding options,****warrants                  and rights** |      | **Weighted-average****exercise                  price of outstanding options, warrants****and                  rights** |      | **Number of securities                  remaining available for future issuance under                  equity compensation**** plans                  (1****)** |
|---------------------------------------------------------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|------------------------------------------------------------------------------------------------------------------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                |                     |                                                                                                                                                    |                     |                                                                                                                         |                     |                                                                                                                                                                                                    |
| Equity                  compensation plans approved by stockholders |      | 492,380                  (2)                                                                                                                            |      | $6.71                                                                                                                        |      | 287,564(3)                                                                                                                                                                                              |

| (1)   | Excludes                  shares reflected in the first                  column. |
|-----------------|----------------------------------------------------------------------------------|

| (2)   | Represents                  outstanding options granted under the Company’s 1991 Employee Stock Option                  Plan, 1992 Stock Option Plan for Non-Employee Directors and 1997                  Stock                  Award and Incentive Plan. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Represents                  shares available for issuance under the 1997 Stock Award and Incentive                  Plan. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

**Item        13. Certain Relationships and Related        Transactions.**

----

Table            of Contents

**Item        14. Principal Accountant Fees and        Services.**

**Audit        and Non-Audit Fees **

|                                      |   | **2003** |    | **2004** |   |
|-------------------------------------------|--------|----------|---------|----------|--------|
| Audit                    fees (1)(2)      |   | $        | 106,525 |     | $      | 174,000 |   |
|                                      |   |     |    |     |   |   |   |
| Audit-related                    fees (3) |   | $        | 108,628 |     |   | - |   |
|                                      |   |     |    |     |   |   |   |
| Tax                    fees (4)           |   | $        | 61,294  |     |   | - |   |
|                                      |   |     |    |     |   |   |   |
| All                    other fees         |   |     | -       |     |   | - |   |
|                                      |   |     |    |     |   |   |   |
| Total                                     |   | $        | 276,447 |     | $      | 174,000 |   |
|                                      |   |     |    |     |   |   |   |

|   | (1) |   | Audit                    fees for 2004 are only related to services provided by BDO. Certain                    amounts paid related to work performed by Deloitte & Touche during                    2004 are not reflected in the                    table. |
|--------|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) |   | The                    2004 BDO billings include $100,000 for their audit of the Company’s annual                    financial statements and review of the quarterly financial statements                    for                    2002 and 2003. |
|--------|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) |   | Audit-related                    fees were primarily for acquisition related due diligence and                    accounting                    consultation in 2003 performed by Deloitte & Touche. |
|--------|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) |   | Tax                    fees were primarily for tax compliance and consulting performed                    by                    Deloitte and Touche. |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

**PART        IV **

**Item        15. Exhibits and Financial Statement        Schedules.**

**Financial        Statements included in Item 8: **

|   |   | Consolidated                  Statements of Operations for each of the three years in the period                  ended                  December 31, 2004. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Consolidated                  Statements of Changes in Stockholders’ Equity for each of the three years                  in the period ended December 31,                  2004. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Consolidated                  Statements of Cash Flows for each of the three years in the period                  ended                  December 31, 2004. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Financial        Statement Schedules included in Item 8: **

**Exhibits:**

----

Table            of Contents

**SIGNATURES**

|                                             |                                                                          |                                     |
|--------------------------------------------------|-------------------------------------------------------------------------------|------------------------------------------|
|                                             | **MERISEL,                  INC.**                                            |
|                                        |                                                                     |                                |
| Date: October                  6, 2005 | By:                                                                 | /s/ Donald                  R. Uzzi |
|                                             | Donald R. Uzzi                                                                |
|                                             | Title:                  Chairman and Chief Executive                  Officer |

----

Table            of Contents

**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. **

| **Signature**                                                                                 | **Title**                                                                                                                                           | **Date**                         |
|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                                                                                          |                                                                                                                                                |                             |
| /s/Donald                  R. UzziDonald                  R. Uzzi                             | Chairman                  of the Board, Chief Executive Officer and President (Principal                  Executive                  Officer)  | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Allyson                  VanderfordAllyson                  Vanderford                     | Chief                  Financial Officer(Principal                  Accounting Officer)                                                             | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Ronald                  P. BadieRonald                  P. Badie                      | Director                                                                                                                                            | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Albert                  J. Fitzgibbons IIIAlbert                  J. Fitzgibbons III  | Director                                                                                                                                            | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Bradley                  J. HoeckerBradley                  J. Hoecker                | Director                                                                                                                                            | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Dr.                  Arnold MillerDr.                  Arnold Miller                  | Director                                                                                                                                            | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |
| /s/Lawrence                  J. SchoenbergLawrence                  J. Schoenberg             | Director                                                                                                                                       | October                  6, 2005 |
|                                                                                          |                                                                                                                                                |                             |

----

Table            of Contents

**Index        of Exhibits**

| **Exhibit**   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Method                    of Filing**                                                                                                                                 |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1           | Asset                    Purchase Agreement dated as of December 24, 2004, as amended,                    by and among                    Merisel, Inc., MCEI, LLC, Color Edge, Inc. (“CE”) and the direct and                    indirect shareholders or members of CE signatories                    thereto.                                                                                                                                                                                                  |   | Filed                    as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005.**                     |
| 2.2           | Asset                    Purchase Agreement dated as of December 24, 2004, as amended,                    by and among                    Merisel, Inc., MCEV, LLC, Color Edge Visual, Inc. (“CEV”), Photobition New                    York, Inc. (“PBNY”) and the direct or indirect shareholders of members of                    CEV and PBNY signatories thereto.                                                                                                                                |   | Filed                    as Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                    |
| 2.3           | Asset                    Purchase Agreement dated as of December 24, 2004, as amended,                    by and among                    Merisel, Inc., MC24, LLC, Comp 24, LLC (“Comp 24”) and the direct and                    indirect shareholders or members of Comp 24 signatories                    thereto                                                                                                                                                                                             |   | Filed                    as Exhibit 2.3 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                    |
| 2.4           | Amendment                    and Waiver to Asset Purchase Agreement dated as of March 1, 2005                    by and                    among MCEI, LLC, Merisel, Inc. and Color Edge, Inc. and the direct                    and                    indirect shareholders set forth on the signature pages                    thereto.                                                                                                                                                                                    |   | Filed                    as Exhibit 2.4 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                    |
| 2.5           | Amendment                    and Waiver to Asset Purchase Agreement dated as of March 1, 2005                    by and                    among MCEV, LLC, Merisel, Inc. and Color Edge Visual, Inc. and                    the direct                    and indirect shareholders set forth on the signature pages                    thereto.                                                                                                                                                                             |   | Filed                    as Exhibit 2.5 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                    |
| 2.6           | Amendment                    and Waiver to Asset Purchase Agreement dated as of March 1, 2005                    by and                    among MC24, LLC, Merisel, Inc. and Comp 24, LLC. and the direct                    and                    indirect shareholders set forth on the signature pages thereto.                                                                                                                                                                                                          |   | Filed                    as Exhibit 2.6 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                    |
| 2.7           | Asset                    Purchase Agreement dated as of July 6, 2005 by and among Merisel,                    MCRU,                    Crush and the shareholders of Crush signatories thereto, as amended                    by                    that certain Amendment and Waiver to Asset Purchase Agreement,                    dated as of                    August 8, 2005 by and among Merisel, MCRU, Crush and Guy Claudy                    as                    Shareholders Representative.                    |   | Filed                    as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the                    SEC on August 9, 2005. **                   |
| 2.8           | Amendment                    and Waiver to Asset Purchase Agreement, dated as of August 8,                    2005 by and                    among Merisel, MCRU, Crush and Guy Claudy as Shareholders                    Representative.                                                                                                                                                                                                                                                                                     |   | Filed                    as Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the                    SEC on August 9, 2005. **                   |
| 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.                                                                                                                                                                                                                                                                                                                                                      |   | Filed                    as Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year                    ended December 31, 2000. **                   |
| 3.5           | Certificate                    of Amendment to the Restated Certificate of Incorporation of                    Merisel Inc.,                    dated October 27, 2004.                                                                                                                                                                                                                                                                                                                                                       |   | Filed                    as Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the                    quarter ended September 30, 2004. **            |
| 3.6           | Bylaws,                    as amended, of Merisel, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Filed                    as exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the                    quarter ended June 30, 1991.**                  |
| 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 Non-employee 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         | 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. **            |
| *10.7         | Amendment                    to Deferred Compensation Agreement between Merisel, Inc. and                    Timothy N.                    Jenson dated December 18, 2001.                                                                                                                                                                                                                                                                                                                                                    |   | Filed                    as exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year                    ended December 31, 2000. **                  |
| *10.8         | 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. **               |
| *10.9         | 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.**                 |
| *10.10        | 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.**            |
| *10.11        | 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, 2000. **                 |
| *10.12        | 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, 2000. **                 |
| 10.13         | 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.**                              |
| 10.14         | 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 Current Report on Form 8-K, dated June 9,                    2000.**                                    |
| 10.15         | 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 Current Report on Form 8-K, dated July 2,                    2001.**                                     |
| 10.16         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002.**                |
| 10.17         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002.**                |
| 10.18         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.19         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.20         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.21         | Construction                    Promissory Note dated May 20, 2002 issued by DCFI, LLC to Merisel                    Properties, Inc.                                                                                                                                                                                                                                                                                                                                                                                         |   | Filed                    as exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.22         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.23         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended June 30, 2002. **               |
| 10.24         | 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 Quarterly Report on Form 10-Q, for the                    quarter ended September 30, 2002.**           |
| *10.25        | Amended                    and Restated First Amendment to Retention Agreement dated as                    of July 1,                    2004 by and among Merisel, Inc., Merisel Americas, Inc. and Timothy                    N.                    Jenson.                                                                                                                                                                                                                                                                 |   | Filed                    as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the                    period ended June 30, 2004.**                  |
| *10.26        | Employment                    Agreement dated November 22, 2004 between Merisel, Inc. and Mr.                    Donald                    Uzzi.                                                                                                                                                                                                                                                                                                                                                                              |   | Filed                    as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the                    SEC on November 24, 2004. **               |
| *10.27… | Settlement                    Agreement and Mutual General Release dated as of February 3,                    2005 by and                    between Merisel, Inc., Merisel Americas, Inc. and Timothy Jenson,                    Tina                    Wurtz, Craig Wurtz, John Low, D&H Services, LLC and TDH Enterprises,                    LLC.                                                                                                                                                                    |   | Filed                    herewith                                                                                                                                       |
| *10.28        | Merisel                    Employment Agreement dated as of March 1, 2005 by and between                    Merisel                    Americas, Inc. and Rajiv Garg.                                                                                                                                                                                                                                                                                                                                                         |   | Filed                    as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| *10.29        | Merisel                    Employment Agreement dated as of March 1, 2005 by and between                    Merisel                    Americas, Inc. and Kenneth Wasserman.                                                                                                                                                                                                                                                                                                                                                  |   | Filed                    as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| *10.30        | Merisel                    Employment Agreement dated as of March 1, 2005 by and between                    Merisel                    Americas, Inc. and John Sheehan.                                                                                                                                                                                                                                                                                                                                                       |   | Filed                    as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.31         | Credit                    Agreement dated as of March 1, 2005 by and among MCEI, LLC, MCEV,                    LLC,                    Merisel, Inc., Merisel Americas, Inc., MC24, LLC and Amalgamated                    Bank.                                                                                                                                                                                                                                                                                              |   | Filed                    as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.32         | Pledge                    Agreement, dated as of March 1, 2005, made among MCEI, LLC, a                    Delaware                    limited liability company, MCEV, LLC, a Delaware limited liability                    company, Merisel, Inc., a Delaware corporation, Merisel Americas,                    Inc., a                    Delaware corporation and Amalgamated Bank, a New York banking                    corporation.                                                                                    |   | Filed                    as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.33         | Security                    Agreement, dated as of March 1, 2005, made by MCEI, LLC, a Delaware                    limited liability company, MCEV, LLC, a Delaware limited liability                    company, Merisel, Inc., a Delaware corporation, Merisel Americas,                    Inc., a                    Delaware corporation, MC24, LLC, a Delaware limited liability                    company, in                    favor of Amalgamated Bank.                                                           |   | Filed                    as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.34         | Corporate                    Guarantee, dated as of March 1, 2005, made among each signatory                    hereto, in                    favor of Amalgamated Bank.                                                                                                                                                                                                                                                                                                                                                 |   | Filed                    as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.35         | Credit                    Agreement dated as of March 1, 2005 by and among MC24, LLC, Merisel,                    Inc.,                    Merisel Americas, Inc., MCEI, LLC, MCEV, LLC and Amalgamated                    Bank.                                                                                                                                                                                                                                                                                              |   | Filed                    as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.36         | Pledge                    Agreement, dated as of March 1, 2005, made among MC24, LLC, a                    Delaware                    limited liability company, Merisel, Inc., a Delaware corporation,                    Merisel                    Americas, Inc., a Delaware corporation and Amalgamated Bank,                    a New York                    banking corporation.                                                                                                                                     |   | Filed                    as Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the                    SEC on March 7, 2005. **                   |
| 10.37         | Security                    Agreement, dated as of March 1, 2005 made by MC24, LLC, Merisel,                    Inc., a                    Delaware corporation, Merisel Americas Inc., a Delaware corporation,                    MCEI,                    LLC, a Delaware limited liability company, MCEV, LLC, a Delaware                    limited                    liability company, each of their Subsidiaries from time to time                    party                    thereto, in favor of Amalgamated Bank. |   | Filed                    as Exhibit 10.10 to the Company’s Current Report on Form 8-K filed with                    the SEC on March 7, 2005. **                  |
| 10.38         | Corporate                    Guarantee, dated as of March 1, 2005, made among each signatory                    hereto, in                    favor of Amalgamated Bank.                                                                                                                                                                                                                                                                                                                                                      |   | Filed                    as Exhibit 10.11 to the Company’s Current Report on Form 8-K filed with                    the SEC on March 7, 2005. **                  |
| *10.39        | Summary                    of CFO Compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Filed                    as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed with                    the SEC on April 20, 2005.**                  |
| 10.40         | Amendment                    No. 1 to Credit Agreement dated as of August 8, 2005 by and among                    MCRU,                    Color Edge LLC (formerly known as MCEI, LLC), Color Edge Visual,                    LLC                    (formerly known as MCEV, LLC), Comp 24 LLC (formerly known as                    MC24, LLC),                    Merisel Americas, Company and Amalgamated Bank, entered into                    in connection                    with the MCEI/MCEV Credit Agreement.   |   | Filed                    as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the                    SEC on August 9, 2005. **                  |
| 14.1          | Code                    of Business Conduct                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Filed                    as exhibit 99.2 to the Company’s Annual Report on Form 10-K, for the                    fiscal year ended December 31, 2002.             |
| 21            | Subsidiaries                    of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Filed                    herewith                                                                                                                                       |
| 23            | Consent                    of BDO Seidman, LLP, Independent Registered Accounting                    Firm.                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Filed                    herewith                                                                                                                                       |
| 31.1          | Certification                    of the Chief Executive Officer pursuant to Section 302 of the                    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                 |   | Filed                    herewith                                                                                                                                       |
| 31.2          | Certification                    of the Chief Financial Officer pursuant to Section 302 of the                    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                 |   | Filed                    herewith                                                                                                                                       |
| 32            | Certification                    of Chief Executive Officer and Chief Financial Officer pursuant                    to 18                    U.S.C. Section 1350.                                                                                                                                                                                                                                                                                                                                                             |   | Filed                    herewith                                                                                                                                       |

----

Table          of Contents