**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, 2006**

**OR**

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

**For      the transition period from **
** **
**      to _____**
** **

**Commission      file number 0-17156**

**MERISEL,      INC.**

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

| **Delaware**                                                   | **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**

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**TABLE      OF CONTENTS**

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

**Note      on Incorporation by Reference**

----

**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.      We intend these forward-looking statements to be covered by the safe harbor      provisions for forward-looking statements contained in the Private Securities      Litigation Reform Act of 1995 and they are included for purposes of complying      with these safe harbor provisions. 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 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. **

**For      some of the important factors that could cause the Company’s actual results to      differ materially from those projected in any such forward-looking statements,      see the Risk Factors discussion set forth under Part I, Item 1A, beginning      on      page 7. **

**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 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.**

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**PART      I**

**Item      1. Business**

**Overview**

| ·   | On                March 1, 2005, the Company acquired its New York-based graphics solutions,                premedia and retouching services businesses,                Color Edge, Inc. (“Color Edge”) and Color Edge Visual, Inc. (“Visual”),                and its New York-based prototype services provider, Comp 24, LLC                (“Comp                24”); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                August 8, 2005, the Company acquired its California-based graphics                solutions business, Crush Creative, Inc.                (“Crush”); |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                May 5, 2006, the Company acquired its California-based prototypes                business, Dennis Curtin Studios, Inc. (“Dennis                Curtin”); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                May 10, 2006, the Company acquired its Georgia-based prototypes business,                Advertising Props, Inc. (“AdProps”);                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                October 1, 2006, the Company acquired its New York-based premedia                and                retouching services business, Fuel Digital, Inc.                (“Fuel”). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Production                Expertise: Consulting and production services are provided by the                Company’s highly-skilled employees; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Technological                Capabilities: The Company uses technologically-advanced equipment                and                processes, enabling it to work with multiple file formats for virtually                any size output device; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Proven                Quality Standards: The Company consistently delivers customized imaging                products of superior quality; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rapid                Turnaround and Delivery Times: The Company accommodates clients’ tight                schedules, often turning around projects, from start to finish, in                less                than 24 hours, by coordinating the New York and Los Angeles facilities,                and taking advantage of Company resources permitting timely shipment                to up                to 500 locations; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Broad                Scope of Services: The Company has up-to-date knowledge of printing                press                specifications for converters and printers located throughout the                country,                on-site resources embedded in clients’ advertising and creative                departments, and an array of value-added graphic art production consulting                services, such as digital imaging asset management and workflow                management. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**The      Visual Communication Solutions and Graphic Services Industry**

**Merisel’s      Market **

----

| ·   | Shorter                turnaround- and delivery-time                requirements; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | An                increasing number of products and packages competing for shelf space                and                market share; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                increased importance of package appearance and in-store advertising                promotions, due to empirical data demonstrating that most purchasing                decisions are made in-store, immediately prior to purchase; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                increased use of out-of-home advertising, such as billboards and                outdoor                displays, as technology has improved image quality and durability,                and its                demonstrated ability to reach larger audiences; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                increasing demand for worldwide consistency and quality in packaging,                as                companies work to build global brand-name recognition. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**The      Company’s Growth Strategy **

| ·   | Organic                Growth: As market conditions have created growth opportunities, the                Company relies upon its highly-skilled sales force as the Company’s                primary growth driver, both in terms of new client acquisition and                the                expansion of services provided to existing clients. The Company relies                upon its superior product quality, technology, service scale and                scope to                both acquire clients and migrate clients from using individual services                to                using a suite of products and services, ranging from initial consultation                to production and distribution. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Strategic                Acquisitions: The Company completed three acquisitions in 2005 and                three                acquisitions in 2006, and will continue to seek additional strategic                acquisition opportunities. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Initiatives                to Increase Penetration to Key Markets and Introduce New Service                Lines:                The Company has adopted initiatives to market to “key” players, such as                agencies and intermediaries, and to develop new, complementary services,                such as digital asset management, premium retouching and digital                media. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Geographic                Expansion: The Company’s operations are currently centered in the New                York/New Jersey and Los Angeles markets. With its new facilities                in                Atlanta, Portland and Chicago, the Company will look to broaden its                geographic footprint to other key United States markets, and to follow                key                clients into other global markets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Services      **

----

**Marketing      and Distribution **

**Clients**

----

**Management**

**Competition      **

----

**Purchasing      and Raw Materials **

**Intellectual      Property **

**Color      Edge**
**Comp24**
**Crush      Creative**
**Dennis      Curtin Studios**
**AdProps**
**      Fuel Digital**

**Employees      **

**Backlog      **

**Seasonality      and Cyclicality **

**Environmental      Compliance**

**Where      You Can Find Additional Information**

----

**Item1A.      Risk Factors **

**Failure      to re-list the Company’s common stock with NASDAQ could limit the stock’s      liquidity and adversely impact its price.**

**The      Company may be sold or merged with another entity to increase shareholder      value.**

----

**The      Company’s inability to successfully implement its business strategy could      adversely affect the Company’s business, financial condition and results of      operations.**

**The      Company’s failure to successfully integrate the six businesses it has acquired      since March 5, 2005 could harm its business and financial prospects.**

| ·   | Demonstrating                to clients that the relevant transaction(s) will not adversely affect                client-service standards; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Demonstrating                to business partners that the transaction(s) will not result in adverse                changes in business focus; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Consolidating                administrative infrastructure; |
|--------------------|-------------------------------------------------------------|

| ·   | Consolidating                and rationalizing IT infrastructure; |
|--------------------|-------------------------------------------------------------------|

| ·   | Coordinating                sales and marketing efforts; |
|--------------------|----------------------------------------------------------|

| ·   | Preserving                important business relationships; |
|--------------------|-------------------------------------------------------------|

| ·   | Resolving                potential “conflict” issues; |
|--------------------|-------------------------------------------------------------------|

| ·   | Minimizing                the degree to which management’s attention is diverted 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, a process that may be subject to constraints                imposed by local laws and regulations, result in contract terminations                or                renegotiations, and may have labor- and tax-law                implications. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**With      respect to the audit reports of the predecessor company, the Company is unable      to obtain reissued audit reports or the independent auditor’s consent to the      inclusion of the reissued audit reports in the Company’s filings, which may      negatively impact the Company’s ability to, among other things, access public      capital markets and file timely reports; stockholders may not be able to obtain      a recovery from the predecessor company’s independent      auditor.**

----

**The      Company’s operating results could be adversely affected by the departure of      senior management or key personnel.**

**The      Company’s lack of long-term customer agreements could result in volatility in      the Company’s business and results of operations.**

**The      Company’s failure to develop and market new products and services could impact      its competitive position and have a materially adverse effect on its business      and results of operations.**

----

**If      the Company is unable to effectively compete in the visual communications      industry, its business and results of operations will be adversely      affected.**

**The      trend to reduce the number of suppliers could have a negative impact on the      Company’s margins and profits. **

**The      Company’s senior credit facilities may limit its ability to expand, and events      beyond the Company’s control may limit its ability to comply with the      facilities’ terms.**

**Business      disruptions could increase costs and expenses, thereby having a negative impact      on the Company’s revenues.**

**Item      1B. Unresolved SEC Comments.**

----

**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                                             |
|  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/ Dennis Curtin Studios  |
|  Beaverton,                OR  |  2,000                                  |  Leased                           | General                Offices, Limited                Production/ Operating Facility |  Month-to-                Month            |  Fuel                Digital                           |
|  New                York, NY   |  16,000                                 |  Leased                           |  General                Offices, Operating Facility                         |  December                2015              |  Fuel                Digital                           |
|  Atlanta,                GA    |  20,000                                 |  Leased                           |  General                Offices, Operating Facility                         |  May                2011                   |  AdProps                                               |

----

**Item      3. Legal Proceedings. **

*In      re: Bridge Information Systems, Inc., *
*Scott      P. Peltz, Chapter 11 Plan Administrator v. Merisel Americas, Inc. and MOCA,      *

----

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

| a)   | The                Company held its 2006 annual meeting of stockholders on May 31,                2006. |
|----------------|---------------------------------------------------------------------------------------------------------|
| b)   | Edward                A. Grant was elected as a director of the Company. Ronald P. Badie,                A.J.                Fitzgibbons II, Bradley J. Hoecker, Lawrence Schoenberg and Donald                R. Uzzi                were also elected as directors for a new one-year                term. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| c)   | The                following matters were submitted to a vote of security holders at                the                annual meeting: |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | Election                of nominees as directors to the Board of Directors. The nominees                were                elected as indicated by the following vote                counts: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Nominee**                         | **Votes                For** | **Votes                Withheld** |
|-------------------------------------|------------------------------|-----------------------------------|
| Ronald                P. Badie      | 7,591,269                    | 6,624                             |
| A.J.                Fitzgibbons III | 7,364,440                    | 233,453                           |
| Edward                A. Grant      | 7,591,459                    | 6,434                             |
| Bradley                J. Hoecker   | 7,352,720                    | 245,173                           |
| Lawrence                Schoenberg  | 7,590,339                    | 7,554                             |
| Donald                R. Uzzi       | 7,368,796                    | 229,097                           |

| 2.   | The                stockholders voted upon and approved a proposal to ratify the appointment                of BDO Seidman, LLP as the Company’s independent registered public                accounting firm for 2006. The vote on the proposal was as                follows: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **For**   | **Against** | **Abstentions** | **Broker                Non-Votes** |
|-----------|-------------|-----------------|-------------------------------------|
| 7,594,498 | 2,864       | 531             | -                                   |

| d)   | Proxies                were solicited only by the Company. |
|----------------|------------------------------------------------------------|

----

**PART      II**

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

| **Fiscal                Year 2005** | **High**               | **Low**                 | **Fiscal                Year 2006** | **High**              | **Low**                 |
|-------------------------------------|------------------------|-------------------------|-------------------------------------|-----------------------|-------------------------|
| First                quarter        | 8                5/8   | 5                11/16  | First                quarter        | 7                1/2  | 7                1/16   |
| Second                quarter       | 8                1/4   | 6                5/8    | Second                quarter       | 7                1/8  | 6                ¼ |
| Third                quarter        | 8                      | 6                ¾ | Third                quarter        | 6                7/16 | 3                ¼ |
| Fourth                quarter       | 7                13/16 | 7                3/8    | Fourth                quarter       | 4                1/4  | 3                3/8    |

----

**Purchase      of Merisel Equity Securities**

| **Period**                          |   | **Total                Number of Shares Purchased (1)** |   | **Average                Price Paid per Share (2)** |   | **Total                Number of Shares Purchased as Part of a Publicly Announced Plans                or                Programs (3)** |   | **Maximum                Number (or Approximated Dollar Value) of Shares that May Yet Be Purchased                Under the Plans or Programs (3)** |   |
|-------------------------------------|--------|---------------------------------------------------------|--------|-----------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                |   |                                                    |   |                                                |   |                                                                                                                                    |   |                                                                                                                                                |   |
| August                1-31, 2006    |   |                                                    | 1,400  |                                                | $      | 3.83                                                                                                                                    |   |                                                                                                                                                | 1,400  |   | $ | 3,144 |   |
| September                1-30, 2006 |   |                                                    | 2,600  |                                                | $      | 3.98                                                                                                                                    |   |                                                                                                                                                | 2,600  |   |   | 3,134 |   |
| October                1-31, 2006   |   |                                                    | 1,700  |                                                | $      | 3.83                                                                                                                                    |   |                                                                                                                                                | 1,700  |   |   | 3,127 |   |
| November                1- 30, 2006 |   |                                                    | 200    |                                                | $      | 3.55                                                                                                                                    |   |                                                                                                                                                | 200    |   |   | 3,126 |   |
|                                |   |                                                    |   |                                                |   |                                                                                                                                    |   |                                                                                                                                                |   |   |   |   |   |
| Total                               |   |                                                    | 5,900  |                                                | $      | 3.89                                                                                                                                    |   |                                                                                                                                                | 5,900  |   |   |   |   |

| **Date                Share Repurchase Programs were Publicly Announced**                       |   | **Approximate                Dollar Value Authorized to be Repurchased** |   |
|-------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
| July                3, 2001                                                                     |   | $                                                                        | 1,000  |   |
| September                1, 2004                                                                |   |                                                                     | 1,000  |   |
| August                14, 2006                                                                  |   |                                                                     | 2,000  |   |
|                                                                                            |   |                                                                     |   |   |
| Total                shares authorized to be repurchased as of December 31,                2006 |   | $                                                                        | 4,000  |   |

----

**Item      6. Selected Financial Data. **

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

|                                                                                                     |   | **2002**      |   | **2003** |   | **2004** |   | **2005                (3)** |   | **2006                (4)** |   |
|----------------------------------------------------------------------------------------------------------|--------|---------------|--------|----------|--------|----------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                                                                     |   | **Successor** |   |
| **Income                Statement Data (1 and 2):**                                                      |   |          |   |     |   |     |   |                        |   |                        |   |
| Net                sales                                                                                 |   | $             | -      |     | $      | -        |   | $                           | -      |                        | $      | 63,009 |   | $ | 84,720 |   |
| Cost                of sales                                                                             |   |          | -      |     |   | -        |   |                        | -      |                        |   | 29,248 |   |   | 42,316 |   |
| Gross                profit                                                                              |   |          | -      |     |   | -        |   |                        | -      |                        |   | 33,761 |   |   | 42,404 |   |
| Selling,                general & administrative expenses **(5)**                                    |   |          | 2,670  |     |   | 2,602    |   |                        | 2,276  |                        |   | 26,753 |   |   | 38,068 |   |
| Restructuring                charge                                                                      |   |          | 2,670  |     |   | 2,602    |   |                        | 2,276  |                        |   | 26,753 |   |   | 724 |   |
| Operating                income (loss)                                                                   |   |          | (2,670 | )        |   | (2,602   | )      |                        | (2,276 | )                           |   | 7,008 |   |   | 3,612 |   |
| Interest                expense (income), net                                                            |   |          | (802   | )        |   | (436     | )      |                        | (586   | )                           |   | 264 |   |   | 585 |   |
| Income                (loss) from continuing operations before provision for income                taxes |   |          | (1,868 | )        |   | (2,166   | )      |                        | (1,690 | )                           |   | 6,744 |   |   | 3,027 |   |
| Income                tax provision                                                                      |   |          | -      |     |   | -        |   |                        | -      |                        |   | 925 |   |   | (3,280 | ) |
| Income                (loss) from continuing operations                                                  |   |          | (1,868 | )        |   | (2,166   | )      |                        | (1,690 | )                           |   | 5,819 |   |   | 6,307 |   |
| Discontinued                operations:Income                (loss) from discontinued operations         |   |          | 8,978  |     |   | 4,926    |   |                        | 3,540  |                        |   | - |   |   | 748 |   |
| Gain                (loss) on sale of discontinued operations                                            |   |          | -      |     |   | -        |   |                        | (2,643 | )                           |   | 5,016 |   |   | - |   |
| Net                income (loss)                                                                         |   | $             | 7,110  |     | $      | 2,760    |   | $                           | (793   | )                           | $      | 10,835 |   | $ | 7,055 |   |
| Preferred                stock dividends                                                                 |   |          | 1,399  |     |   | 1,514    |   |                        | 1,639  |                        |   | 1,774 |   |   | 1,920 |   |
| Net                income (loss) available to common stockholders                                        |   | $             | 5,711  |     | $      | 1,246    |   | $                           | (2,432 | )                           | $      | 9,061 |   | $ | 5,135 |   |
|                                                                                                     |   |          |   |     |   |     |   |                        |   |                        |   |   |   |   |   |   |
| **Share                Data :**                                                                          |   |          |   |     |   |     |   |                        |   |                        |   |   |   |   |   |   |
| Net                income (loss) available to common stockholders per diluted                share       |   |          | 0.74   |     |   | 0.16     |   |                        | (0.32  | )                           |   | 1.18 |   |   | .66 |   |
| Weighted                average number of diluted Shares                                                 |   |          | 7,735  |     |   | 7,617    |   |                        | 7,620  |                        |   | 7,670 |   |   | 7,816 |   |
| **Balance                Sheet Data:**                                                                   |   |          |   |     |   |     |   |                        |   |                        |   |   |   |   |   |   |
| Working                capital                                                                           |   |          | 41,659 |     |   | 42,812   |   |                        | 43,767 |                        |   | 20,769 |   |   | 23,486 |   |
| Total                assets                                                                              |   |          | 72,844 |     |   | 67,212   |   |                        | 47,950 |                        |   | 77,363 |   |   | 84,580 |   |
| Long-term                debt                                                                            |   |          | -      |     |   | -        |   |                        | -      |                        |   | 10,487 |   |   | 9,894 |   |
| Total                debt, including current portion                                                     |   |          | -      |     |   | -        |   |                        | -      |                        |   | 11,743 |   |   | 11,120 |   |
| Stockholders'                equity                                                                      |   |          | 41,750 |     |   | 44,662   |   |                        | 43,841 |                        |   | 55,038 |   |   | 62,680 |   |

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

| 2.   | The                Company sold its Canadian distribution business in July 2001 and                its                software licensing assets in August 2004. As a result, the operations                of                those businesses were reclassified as discontinued operations. The                sale of                the software licensing assets was rescinded in February 2005, but                continued to be treated as discontinued operations. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | The                Company acquired substantially all of the assets of Color Edge, Inc.,                Color Edge Visual, Inc., Comp 24, LLC in March 2005 and substantially                all                of the assets of Crush Creative, Inc. in August                2005. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The                Company acquired substantially all the assets of Dennis Curtin Studios,                Inc. and all of the stock of Advertising Props, Inc. in May 2006                and                substantially all of the assets of Fuel Digital, Inc. in October                2006. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | For                the year ended December 31, 2006, includes stock-based compensation                expense of $186 related to the adoption of SFAS No. 123(R).   |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   |   **For                the year ended****December                31,** |   |  **For                the two months ended February 28,** |   |
|----------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|                                                           |   | **2002**                                                                         |   | **2003**                                                       |   | **2004** |   | **2005** |   |
| **Income                Statement Data:**                      |   | **Predecessor**                                                                  |   |
| Net                sales                                       |   | $                                                                                | 20,041 |                                                           | $      | 46,499 |   | $ | 51,742 |   | $ | 8,532 |   |
| Cost                of sales                                   |   |                                                                             | 11,626 |                                                           |   | 23,662 |   |   | 25,836 |   |   | 5,011 |   |
| Gross                profit                                    |   |                                                                             | 8,415  |                                                           |   | 22,837 |   |   | 25,906 |   |   | 3,521 |   |
| Selling,                general & administrative expenses  |   |                                                                             | 7,728  |                                                           |   | 21,131 |   |   | 22,083 |   |   | 4,615 |   |
| Operating                income (loss)                         |   |                                                                             | 687    |                                                           |   | 1,706 |   |   | 3,823 |   |   | (1,094 | ) |
| Interest                and other expense, net                 |   |                                                                             | 295    |                                                           |   | 353 |   |   | 441 |   |   | 73 |   |
| Income                (loss) before provision for income taxes |   |                                                                             | 392    |                                                           |   | 1,353 |   |   | 3,382 |   |   | (1,167 | ) |
| Income                tax provision                            |   |                                                                             | 91     |                                                           |   | 875 |   |   | 1,856 |   |   | - |   |
| Income                before extraordinary gain                |   |                                                                             | 301    |                                                           |   | 478 |   |   | 1,526 |   |   | (1,167 | ) |
| Extraordinary                gain                              |   |                                                                             | 4,117  |                                                           |   | - |   |   | - |   |   | - |   |
| Net                income (loss)                               |   | $                                                                                | 4,418  |                                                           | $      | 478 |   | $ | 1,526 |   | $ | (1,167 | ) |
| **Balance                Sheet Data:**                         |   |                                                                             |   |                                                           |   |   |   |   |   |   |   |   |   |
| Working                capital                                 |   |                                                                             | 3,402  |                                                           |   | 5,744 |   |   | 9,447 |   |   | 8,761 |   |
| Total                assets                                    |   |                                                                             | 23,413 |                                                           |   | 25,803 |   |   | 27,923 |   |   | 25,286 |   |
| Long-term                debt                                  |   |                                                                             | 5,900  |                                                           |   | 6,711 |   |   | 7,660 |   |   | 7,976 |   |
| Total                debt, including current portion           |   |                                                                             | 8,773  |                                                           |   | 8,293 |   |   | 8,718 |   |   | 8,998 |   |
| Stockholders'                equity                            |   |                                                                             | 7,490  |                                                           |   | 7,968 |   |   | 9,494 |   |   | 8,327 |   |

----

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

**Introduction**

**Management      Overview of 2005 Operations and Key Events**

----

***Discontinued      Operations***

----

**Results      of Operations **

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

|                                                       |   | **2006**                               |   | **2005**                               |   | **2004**                            |   |
|------------------------------------------------------------|--------|----------------------------------------|--------|----------------------------------------|--------|-------------------------------------|--------|
|                                                       |   | **Successor**                          |   | **Successor**                          |   | **Successor**                       |   | **Successor** |   | **Predecessor** |   |
|                                                       |   | **Existing                Operations** |   | **Expanded                Operations** |   | **Total                Operations** |   | **Existing                Operations** |   |   |   |
| Net                sales                                   |   | $                                      | 78,452 |                                   | $      | 6,268                               |   | $ | 84,720 |   | $ | 63,009 |   | $ | 51,742 |   |
| Gross                profit                                |   |                                   | 39,182 |                                   |   | 3,222                               |   |   | 42,404 |   |   | 33,761 |   |   | 25,906 |   |
| Selling,                general, and administrative        |   |                                   | 35,515 |                                   |   | 2,553                               |   |   | 38,068 |   |   | 26,753 |   |   | 22,083 |   |
| Restructuring                charge                        |   |                                   | 724    |                                   |   | -                                   |   |   | 724 |   |   | - |   |   | - |   |
| Interest                expense                            |   |                                   | (1,054 | )                                      |   | (12                                 | )      |   | (1066 | ) |   | (611 | ) |   | (489 | ) |
| Interest                income                             |   |                                   | 481    |                                   |   | -                                   |   |   | 481 |   |   | 347 |   |   | 48 |   |
| Income                taxes                                |   |                                   | (3,280 | )                                      |   | -                                   |   |   | (3280 | ) |   | 925 |   |   | 1,856 |   |
| Discontinued                Operations                     |   |                                   | 748    |                                   |   | -                                   |   |   | 748 |   |   | 5,016 |   |   | - |   |
| Net                Income                                  |   |                                   | 6,398  |                                   |   | 657                                 |   |   | 7,055 |   |   | 10,835 |   | $ | 1,526 |   |
| Preferred                stock dividends                   |   |                                   | 1,920  |                                   |   | -                                   |   |   | 1,920 |   |   | 1,774 |   |   | - |   |
| Net                income available to common shareholders |   | $                                      | 4,478  |                                   | $      | 657                                 |   | $ | 5,135 |   | $ | 9,061 |   | $ | 1,526 |   |

**Comparison      of Fiscal Years Ended December 31, 2006 and December 31,      2005**

*Net      Sales*

*Gross      Profit*

----

*Selling,      General and Administrative*

*Restructuring      Costs*

*Interest      Expense*

*Interest      Income*

*Income      Taxes*

*Discontinued      Operations*

*Net      Income*

**Comparison      of Fiscal Years Ended December 31, 2005 and December 31,      2004**

*Net      Sales *

*Gross      Profit*

----

*Selling,      General and Administrative*

*Interest      Expense*

*Interest      Income*

*Income      Taxes*

*Discontinued      Operations*

*Net      Income*

**Liquidity      and Capital Resources**

**Cash      Flow Activity for 2004, 2005 and 2006**

| **Analysis                of Cash Flows**                           |   | **For                the Years Ended** |   |
|---------------------------------------------------------------------|--------|----------------------------------------|--------|
| **(in                thousands)**                                   |   | **2004**                               |   | **2005** |   | **2006** |   |
|                                                                |   | **Predecessor**                        |   | **Successor** |   |  **Successor** |   |
| Cash                flows provided by operating activities          |   | $                                      | 4,111  |   | $ | 5,046 |   | $ | 7,296 |   |
| Cash                flows used in investing activities              |   |                                   | (2,719 | ) |   | (39,044 | ) |   | (12,839 | ) |
| Cash                flows used in financing activities              |   |                                   | (95    | ) |   | (740 | ) |   | (1,289 | ) |
| Net                cash provided by discontinued operations         |   |                                   | -      |   |   | 425 |   |   | 748 |   |
| Net                increase (decrease) in cash and cash equivalents |   | $                                      | 1,297  |   | $ | (34,313 | ) | $ | (6,084 | ) |

----

***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** |   | **3-5                Years** |   | **More                than 5 Years** |   |
| Long                Term Debt Obligations  |   | $                                        | 10,102 |   | $ | 596 |   | $ | 9,506 |   | $ | - |   | $ | - |   |
| Capital                Lease Obligations   |   |                                     | 1,018  |   |   | 630 |   |   | 372 |   |   | 16 |   |   | - |   |
| Operating                Lease Obligations |   |                                     | 27,310 |   |   | 3,993 |   |   | 8,255 |   |   | 8,337 |   |   | 6,725- |   |
| Total                                      |   | $                                        | 38,430 |   | $ | 5,219 |   | $ | 18,133 |   | $ | 8,353 |   | $ | 6,725 |   |

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

***Investments***

***Interest      Rate Risks***

----

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

**MERISEL,      INC. AND SUBSIDIARIES**

**INDEX      TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                        |
|---------------------------------------------------------------------------------------------|
| Report                of Independent Registered Public Accounting                Firm  |
| Independent                Auditors’ Report                                      |
| Consolidated                Balance Sheets                                             |
| Consolidated                Statements of Operations                                   |
| Consolidated                Statements of Stockholders’                Equity    |
| Consolidated                Statements of Cash Flows                                   |
| Notes                to Consolidated Financial Statements                              |

----

**Report      of Independent Registered Public Accounting      Firm**

----

**THIS      REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY      WEINICK, SANDERS AND LEVANTHAL. THE AUDITING FIRM OF WEINICK, SANDERS AND      LEVANTHAL IS NO LONGER IN OPERATION, AND AS SUCH, HAS NOT REISSUED ITS      INDEPENDENT AUDITORS’ REPORT.**

**INDEPENDENT      AUDITORS' REPORT**

----

**MERISEL,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS **

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

|                                                                                                                                                                                                                              |   | **December                  31,** |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                                                                                                                                                                                              |   | **2005**                          |     | **2006** |   |
| **ASSETS**                                                                                                                                                                                                                        |   | **Successor**                     |     | **Successor** |   |
| Current                  assets:                                                                                                                                                                                                  |   |                              |     |   |   |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                        |   | $                                 | 12,548   |   | $ | 6,464 |   |
| Accounts                  receivable, net of allowance of $948 and $977,                  respectively                                                                                                                            |   |                              | 17,416   |   |   | 22,232 |   |
| Inventories                                                                                                                                                                                                                       |   |                              | 1,615    |   |   | 2,135 |   |
| Prepaid                  expenses and other current assets                                                                                                                                                                        |   |                              | 711      |   |   | 718 |   |
| Deferred                  tax asset                                                                                                                                                                                               |   |                              | -        |   |   | 2,431 |   |
| Asset                  held for sale                                                                                                                                                                                              |   |                              |     |   |   | 914 |   |
| Total                  current assets                                                                                                                                                                                             |   |                              | 32,290   |   |   | 34,894 |   |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| Property,                  plant and equipment, net                                                                                                                                                                               |   |                              | 6,982    |   |   | 8,355 |   |
| Restricted                  cash                                                                                                                                                                                                  |   |                              | 6,775    |   |   | 3,719 |   |
| Goodwill                                                                                                                                                                                                                          |   |                              | 12,733   |   |   | 17,058 |   |
| Trademarks                                                                                                                                                                                                                        |   |                              | 10,452   |   |   | 10,609 |   |
| Other                  intangible assets, net                                                                                                                                                                                     |   |                              | 7,034    |   |   | 8,354 |   |
| Deferred                  tax asset                                                                                                                                                                                               |   |                              | -        |   |   | 1,166 |   |
| Other                  assets                                                                                                                                                                                                     |   |                              | 183      |   |   | 425 |   |
| Non-current                  assets of discontinued operations                                                                                                                                                                    |   |                              | 914      |   |   | - |   |
| Total                  assets                                                                                                                                                                                                     |   | $                                 | 77,363   |   | $ | 84,580 |   |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                                         |   |                              |     |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                             |   |                              |     |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                 |   | $                                 | 2,166    |   | $ | 3,227 |   |
| Accrued                  liabilities                                                                                                                                                                                              |   |                              | 6,241    |   |   | 6,929 |   |
| Capital                  lease obligations, current maturities                                                                                                                                                                    |   |                              | 536      |   |   | 630 |   |
| Installment                  notes, current maturities                                                                                                                                                                            |   |                              | 719      |   |   | 596 |   |
| Income                  tax payable                                                                                                                                                                                               |   |                              | 1,808    |   |   | - |   |
| Customer                  deposits                                                                                                                                                                                                |   |                              | 51       |   |   | 26 |   |
| Total                  current liabilities                                                                                                                                                                                        |   |                              | 11,521   |   |   | 11,408 |   |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| Revolving                  credit agreement                                                                                                                                                                                       |   |                              | 8,630    |   |   | 8,630 |   |
| Capital                  lease obligations, less current maturities                                                                                                                                                               |   |                              | 481      |   |   | 388 |   |
| Installment                  notes, less current maturities                                                                                                                                                                       |   |                              | 1,376    |   |   | 876 |   |
| Other                  liabilities                                                                                                                                                                                                |   |                              | 317      |   |   | 598 |   |
| Total                  liabilities                                                                                                                                                                                                |   |                              | 22,325   |   |   | 21,900 |   |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| Commitments                  and Contingencies                                                                                                                                                                                    |   |                              |     |   |   |   |   |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| Stockholders'                  equity:                                                                                                                                                                                            |   |                              |     |   |   |   |   |
| Convertible                  preferred stock, $.01 par value; authorized 1,000,000 shares;150,000                  shares issued and outstanding                                                                                  |   |                              | 23,295   |   |   | 25,215 |   |
| Common                  stock, $.01 par value; authorized 30,000,000 shares; issued: 8,183,875                  and                  8,429,518, respectively; outstanding: 7,773,755 and 8,013,638,                  respectively |   |                              | 82       |   |   | 84 |   |
| Additional                  paid-in capital                                                                                                                                                                                       |   |                              | 275,601  |   |   | 273,957 |   |
| Accumulated                  deficit                                                                                                                                                                                              |   |                              | (242,757 | ) |   | (235,702 | ) |
| Unamortized                  deferred compensation                                                                                                                                                                                |   |                              | (332     | ) |   | - |   |
| Treasury                  stock, at cost, 409,980 and 415,880 shares repurchased                                                                                                                                                  |   |                              | (851     | ) |   | (874 | ) |
|                                                                                                                                                                                                                              |   |                              |     |   |   |   |   |
| Total                  stockholders' equity                                                                                                                                                                                       |   |                              | 55,038   |   |   | 62,680 |   |
| Total                  liabilities and stockholders' equity                                                                                                                                                                       |   | $                                 | 77,363   |   | $ | 84,580 |   |

----

**MERISEL,        INC. AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

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

|                                                                                                                                                                    |   | **For                  the year ended December 31****,** |   | **For                  the two months ended February 28,** |   |   **For                  the year ended December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|------------------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                                                                                                                               |   | **2004**                                                 |   | **2005**                                                   |   | **2004**                                                         |   | **2005** |   | **2006** |   |
|                                                                                                                                                               |   | **Predecessor**                                          |   | **Predecessor**                                            |   | **Successor**                                                    |   | **Successor** |   | **Successor** |   |
| Net                  sales                                                                                                                                         |   | $                                                        | 51,742 |                                                       | $      | 8,532                                                            |   | $ | - |   | $ | 63,009 |   | $ | 84,720 |   |
| Cost                  of sales                                                                                                                                     |   |                                                     | 25,836 |                                                       |   | 5,011                                                            |   |   | - |   |   | 29,248 |   |   | 42,316 |   |
| Gross                  profit                                                                                                                                      |   |                                                     | 25,906 |                                                       |   | 3,521                                                            |   |   | - |   |   | 33,761 |   |   | 42,404 |   |
|                                                                                                                                                               |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Selling,                  general and administrative expenses                                                                                                      |   |                                                     | 22,083 |                                                       |   | 4,615                                                            |   |   | 2,276 |   |   | 26,753 |   |   | 38,068 |   |
| Restructuring                  charge                                                                                                                              |   |                                                     | -      |                                                       |   | -                                                                |   |   | - |   |   | - |   |   | 724 |   |
| Operating                  income (loss)                                                                                                                           |   |                                                     | 3,823  |                                                       |   | (1,094                                                           | )      |   | (2,276 | ) |   | 7,008 |   |   | 3,612 |   |
| Interest                  expense                                                                                                                                  |   |                                                     | (489   | )                                                          |   | (73                                                              | )      |   | - |   |   | (611 | ) |   | (1,066 | ) |
| Interest                  income                                                                                                                                   |   |                                                     | 48     |                                                       |   | -                                                                |   |   | 586 |   |   | 347 |   |   | 481 |   |
| Income                  (loss) from continuing operations before provision for income                  tax                                                         |   |                                                     | 3,382  |                                                       |   | (1,167                                                           | )      |   | (1,690 | ) |   | 6,744 |   |   | 3,027 |   |
| Income                  tax provision (benefit)                                                                                                                    |   |                                                     | 1,856  |                                                       |   | -                                                                |   |   | - |   |   | 925 |   |   | (3,280 | ) |
| Income                  (loss) from continuing operations                                                                                                          |   |                                                     | 1,526  |                                                       |   | (1,167                                                           | )      |   | (1,690 | ) |   | 5,819 |   |   | 6,307 |   |
| Income                  from discontinued operations, net of taxes                                                                                                 |   |                                                     | -      |                                                       |   | -                                                                |   |   | 3,540 |   |   | - |   |   | 748 |   |
| Gain                  (loss) on sale of discontinued operations, net of taxes                                                                                      |   |                                                     | -      |                                                       |   | -                                                                |   |   | (2,643 | ) |   | 5,016 |   |   | - |   |
| Net                  income (loss)                                                                                                                                 |   | $                                                        | 1,526  |                                                       | $      | (1,167                                                           | )      | $ | (793 | ) | $ | 10,835 |   | $ | 7,055 |   |
|                                                                                                                                                               |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Preferred                  stock dividends                                                                                                                         |   |                                                     | 0-     |                                                       |   | -                                                                |   |   | 1,639 |   |   | 1,774 |   |   | 1,920 |   |
| Net                  income (loss) available to common stockholders                                                                                                |   | $                                                        | 1,526  |                                                       | $      | (1,167                                                           | )      | $ | (2,432 | ) | $ | 9,061 |   | $ | 5,135 |   |
|                                                                                                                                                               |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss) per share (basic):Income                  (loss) from continuing operations available to common                  stockholders   |   |                                                     | N/A    |                                                       |   | N/A                                                              |   | $ | (0.44 | ) | $ | 0.53 |   | $ | .56 |   |
| Discontinued                  operations:                                                                                                                          |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations                                                                                                               |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | 0.47 |   |   | - |   |   | .10 |   |
| Gain                  (loss) on sale of discontinued operations                                                                                                    |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | (0.35 | ) |   | 0.66 |   |   | - |   |
| Net                  income (loss) available to common stockholders                                                                                                |   |                                                     | N/A    |                                                       |   | N/A                                                              |   | $ | (0.32 | ) | $ | 1.19 |   | $ | .66 |   |
|                                                                                                                                                               |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss) per share (diluted):Income                  (loss) from continuing operations available to common                  stockholders |   |                                                     | N/A    |                                                       |   | N/A                                                              |   | $ | (0.44 | ) | $ | 0.53 |   | $ | .56 |   |
| Discontinued                  operations:                                                                                                                          |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations                                                                                                               |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | 0.47 |   |   | - |   |   | .10 |   |
| Gain                  (loss) on sale of discontinued operations                                                                                                    |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | (0.35 | ) |   | 0.65 |   |   | - |   |
| Net                  income (loss) available to common stockholders                                                                                                |   |                                                     | N/A    |                                                       |   | N/A                                                              |   | $ | (0.32 | ) | $ | 1.18 |   | $ | .66 |   |
|                                                                                                                                                               |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average number of shares:                                                                                                                |   |                                                     |   |                                                       |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                              |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | 7,620 |   |   | 7,640 |   |   | 7,744 |   |
| Diluted                                                                                                                                                            |   |                                                     | N/A    |                                                       |   | N/A                                                              |   |   | 7,620 |   |   | 7,670 |   |   | 7,816 |   |

----

**MERISEL,INC.      AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY **

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

|                                                                 |   | **Successor**                                        |    |
|----------------------------------------------------------------------|--------|------------------------------------------------------|---------|
|                                                                 |   |    **Preferred                Stock** |    |    **Common                Stock** |   |  **Additional****Paid-in****Capital** |   |   **Deferred                Compensation** |   |   **Accumulated                Deficit** |   | **Accumulated****Other****Comprehensive****Loss** |   |    **Treasury                Stock** |   |    **Total** |   |   **Comprehensive****Income                (Loss)** |   |
|                                                                 |   | **Shares**                                           |    | **Amount** |   | **Shares** |   | **Amount** |   |   |   |   |   |   |   |   |   | **Shares** |   | **Amount** |   |   |   |   |   |
| Balance                at January 1, 2004                            |   |                                                 | 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 |   |   |   |   |
| Accumulation                of convertible preferred stock dividend  |   |                                                 |    |   |   | 1,774 |   |   |   |   |   |   |   |   | (1,774 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                of deferred compensation                 |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 360 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 360 |   |   |   |   |
| Issue                of restricted stock                             |   |                                                 |    |   |   |   |   |   | 150,000 |   |   | 2 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2 |   |   |   |   |
| Comprehensive                Income:                                 |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                            |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 10,835 |   |   |   |   |   |   |   |   |   |   |   | 10,835 |   | $ | 10,835 |   |
| Total                Comprehensive Income                            |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 10,835 |   |
| Balance                at December 31, 2005                          |   |                                                 | 150,000 |   | $ | 23,295 |   |   | 8,183,875 |   | $ | 82 |   | $ | 275,601 |   | $ | (332 | ) | $ | (242,757 | ) | $ | 0 |   |   | (409,980 | ) | $ | (851 | ) | $ | 55,038 |   |   |   |   |
| Reclassification                of deferred compensation             |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   | (332 | ) |   | 332 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulation                of convertible preferred stock dividend  |   |                                                 |    |   |   | 1,920 |   |   |   |   |   |   |   |   | (1,920 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of restricted stock                             |   |                                                 |    |   |   |   |   |   | 245,643 |   |   | 2 |   |   | (2 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Stock                compensation                                    |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   | 610 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 610 |   |   |   |   |
| Purchase                of treasury stock                            |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (5,900 | ) |   | (23 | ) |   | (23 | ) |   |   |   |
| Net                income                                            |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,055 |   |   |   |   |   |   |   |   |   |   |   | 7,055 |   | $ | 7,055 |   |
| Total                Comprehensive Income                            |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 7,055 |   |
|                                                                 |   |                                                 | 150,000 |   | $ | 25,215 |   |   | 8,429,518 |   | $ | 84 |   | $ | 273,957 |   | $ | - |   | $ | (235,702 | ) | $ | 0 |   |   | (415,880 | ) | $ | (874 | ) | $ | 62,680 |   |   |   |   |

----

**MERISEL,      INC. AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY **

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

| **Predecessor**                             |   |
|---------------------------------------------|--------|
|                                        |   |    **Common                Stock** |   |  **Additional****Paid-in****Capital** |   |   **Retained                Earnings** |   |    **Total** |   |
|                                        |   | **Shares** |   | **Amount** |   |   |   |   |   |   |   |
| Balance                at December 31, 2003 |   |   | 1,200 |   |   | - |   | $ | 1,450 |   | $ | 6,518 |   | $ | 7,968 |   |
| Net                income                   |   |   |   |   |   |   |   |   |   |   |   | 1,526 |   |   | 1,526 |   |
| Balance                at December 31, 2004 |   |   | 1,200 |   |   | - |   | $ | 1,450 |   | $ | 8,044 |   | $ | 9,494 |   |
| Net                loss                     |   |   |   |   |   |   |   |   |   |   |   | (1,167 | ) |   | (1,167 | ) |
| Balance                at February 28, 2005 |   |   | 1,200 |   |   | - |   | $ | 1,450 |   | $ | 6,877 |   | $ | 8,327 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES **

**CONSOLIDATEDSTATEMENTS      OF CASH FLOWS **

**(In      thousands) **

|                                                                                                                                                |   | **For                  the years ended December 31,** |            | **For                  the Two Months Ended February 28,** |   | **For                  the years ended****December                  31,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-----------------|------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
| **CONTINUING                  OPERATIONS:**                                                                                                         |   | **2004**                                              |            | **2005**                                                   |   | **2004**                                                                  |   | **2005** |   | **2006** |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                                                          |   |                                                  | **Predecessor** |                                                       |   | **Predecessor**                                                           |   |   | **Successor** |   |   | **Successor** |   |   | **Successor** |   |
| Net                  income (loss)                                                                                                                  |   | $                                                     | 1,526           |                                                       | $      | (1,167                                                                    | )      | $ | (793 | ) | $ | 10,835 |   | $ | 7,055 |   |
| Less:                  Gain (loss) on sale of discontinued operations                                                                               |   |                                                  | -               |                                                       |   | -                                                                         |   |   | (2,643 | ) |   | 5,016 |   |   | - |   |
| Less:                  income from discontinued operations, net                                                                                     |   |                                                  | -               |                                                       |   | -                                                                         |   |   | 3,540 |   |   | - |   |   | 748 |   |
| Income                  (loss) from continuing operations                                                                                           |   |                                                  | 1,526           |                                                       |   | (1,167                                                                    | )      |   | (1,690 | ) |   | 5,819 |   |   | 6,307 |   |
| Adjustments                  to reconcile income (loss) from operations to net cash used in                  operating                  activities: |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Stock                  based compensation                                                                                                           |   |                                                  | -               |                                                       |   | -                                                                         |   |   | 9 |   |   | 360 |   |   | 610 |   |
| Deferred                  occupancy costs                                                                                                           |   |                                                  | 76              |                                                       |   | -                                                                         |   |   | - |   |   | 317 |   |   | 181 |   |
| Deferred                  income taxes (benefit)                                                                                                    |   |                                                  | 813             |                                                       |   | 533                                                                       |   |   | - |   |   | - |   |   | (3,597 | ) |
| Restricted                  cash                                                                                                                    |   |                                                  | (161            | )                                                          |   | 7                                                                         |   |   | - |   |   | (31 | ) |   | 3,994 |   |
| Depreciation                  and amortization                                                                                                      |   |                                                  | 1,350           |                                                       |   | 284                                                                       |   |   | - |   |   | 2,009 |   |   | 2,898 |   |
| Changes                  in assets and liabilities, exclusive of acquisitions:                                                                      |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                                                                |   |                                                  | (182            | )                                                          |   | (1,792                                                                    | )      |   | - |   |   | (2,049 | ) |   | (594 | ) |
| Due                  from related company                                                                                                           |   |                                                  | (72             | )                                                          |   | -                                                                         |   |   | - |   |   | - |   |   | - |   |
| Inventories                                                                                                                                         |   |                                                  | 147             |                                                       |   | 189                                                                       |   |   | - |   |   | 335 |   |   | (506 | ) |
| Prepaid                  expenses and other current assets                                                                                          |   |                                                  | 143             |                                                       |   | 27                                                                        |   |   | (335 | ) |   | 621 |   |   | (44 | ) |
| Accounts                  payable                                                                                                                   |   |                                                  | (1,544          | )                                                          |   | (122                                                                      | )      |   | 9 |   |   | (2,822 | ) |   | (124 | ) |
| Accrued                  liabilities                                                                                                                |   |                                                  | 2,015           |                                                       |   | (52                                                                       | )      |   | (1,432 | ) |   | 487 |   |   | (1,829 | ) |
| Net                  cash provided by (used in) operating activities                                                                                |   |                                                  | 4,111           |                                                       |   | (2,093                                                                    | )      |   | (3,439 | ) |   | 5,046 |   |   | 7,296 |   |
|                                                                                                                                                |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                                                          |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Acquisitions,                  net of $878 and $317 cash acquired                                                                                   |   |                                                  | -               |                                                       |   | -                                                                         |   |   | - |   |   | (37,587 | ) |   | (11,232 | ) |
| Capital                  expenditures                                                                                                               |   |                                                  | (344            | )                                                          |   | (9                                                                        | )      |   | - |   |   | (1,457 | ) |   | (1,607 | ) |
| Decrease                  (increase) in due from stockholder                                                                                        |   |                                                  | (2,375          | )                                                          |   | 231                                                                       |   |   | - |   |   | - |   |   | - |   |
| Net                  cash provided by (used in) investing activities                                                                                |   |                                                  | (2,719          | )                                                          |   | 222                                                                       |   |   | - |   |   | (39,044 | ) |   | (12,839 | ) |
|                                                                                                                                                |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                                                          |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of common stock                                                                                             |   |                                                  | -               |                                                       |   | -                                                                         |   |   | 15 |   |   | - |   |   | - |   |
| Capital                  lease payments                                                                                                             |   |                                                  | (959            | )                                                          |   | (119                                                                      | )      |   | - |   |   | (572 | ) |   | (573 | ) |
| Loan                  origination fees                                                                                                              |   |                                                  | (116            | )                                                          |   | -                                                                         |   |   | - |   |   | - |   |   | - |   |
| Installment                  note repayments                                                                                                        |   |                                                  | (1,467          | )                                                          |   | -                                                                         |   |   | - |   |   | (325 | ) |   | (693 | ) |
| Bank                  borrowings                                                                                                                    |   |                                                  | 2,447           |                                                       |   | 400                                                                       |   |   | - |   |   | 157 |   |   | - |   |
| Purchase                  of treasury stock                                                                                                         |   |                                                  | -               |                                                       |   | -                                                                         |   |   | - |   |   | - |   |   | (23 | ) |
| Net                  cash provided by (used in) financing activities                                                                                |   |                                                  | (95             | )                                                          |   | 281                                                                       |   |   | 15 |   |   | (740 | ) |   | (1,289 | ) |
|                                                                                                                                                |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Cash                  provided by (used in) continuing operations                                                                                   |   |                                                  | 1,297           |                                                       |   | (1,590                                                                    | )      |   | (3,424 | ) |   | (34,738 | ) |   | (6,832 | ) |
|                                                                                                                                                |   |                                                  |            |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |

----

**MERISEL,      INC. AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF CASH FLOWS (Continued)**

**(In      thousands)**

|                                                                   |   | **For                  the years ended December 31,** |   | **For                  the two months ended February 28,** |   | **For                  the years ended December 31,** |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                   |   | **2004**                                              |   | **2005**                                                   |   | **2004**                                              |   | **2005** |   | **2006** |   |
|                                                                   |   | **Predecessor**                                       |   | **Predecessor**                                            |   | **Successor**                                         |   | **Successor** |   | **Successor** |   |
| **DISCONTINUED                  OPERATIONS:**                          |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |
| Cash                  provided by (used in) operating activities       |   |                                                  | -      |                                                       |   | -                                                     |   |   | 5,202 |   |   | (489 | ) |   | 748 |   |
| Cash                  provided by investing activities                 |   |                                                  | -      |                                                       |   | -                                                     |   |   | 135 |   |   | 914 |   |   | - |   |
| **NET                  CASH PROVIDED BY DISCONTINUED OPERATIONS:**     |   |                                                  | -      |                                                       |   | -                                                     |   |   | 5,337 |   |   | 425 |   |   | 748 |   |
|                                                                   |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| NET                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  |   |                                                  | 1,297  |                                                       |   | (1,590                                                | )      |   | 1,913 |   |   | (34,313 | ) |   | (6,084 | ) |
| CASH                  AND CASH EQUIVALENTS, BEGINNING OF YEAR          |   |                                                  | 756    |                                                       |   | 2,053                                                 |   |   | 44,948 |   |   | 46,861 |   |   | 12,548 |   |
| CASH                  AND CASH EQUIVALENTS, END OF PERIOD YEAR         |   | $                                                     | 2,053  |                                                       | $      | 463                                                   |   | $ | 46,861 |   | $ | 12,548 |   | $ | 6,464 |   |
|                                                                   |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:** |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid during the year for:                        |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense                                      |   | $                                                     | 491    |                                                       | $      | 70                                                    |   |   | - |   | $ | 453 |   | $ | 1,007 |   |
| Income                  taxes                                          |   | $                                                     | 73     |                                                       |   | -                                                     |   |   | - |   |   | - |   | $ | 2,350 |   |
|                                                                   |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| Noncash                  activities:                                   |   |                                                  |   |                                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| Restricted                  stock grant                                |   |                                                  | -      |                                                       |   | -                                                     |   |   | - |   | $ | 2 |   | $ | 2 |   |
| Preferred                  dividend accumulated                        |   |                                                  | -      |                                                       |   | -                                                     |   | $ | 1,639 |   | $ | 1,774 |   | $ | 1,920 |   |

----

**MERISEL,INC.      AND SUBSIDIARIES **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **

**DECEMBER      31, 2003, 2004 and 2005**

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

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

*General*

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

*Use      of Estimates*

*Consolidation      Policy*

*Cash      and Cash Equivalents*

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

*Accounts      Receivable and Allowance for Doubtful Accounts*

|                                        |   | **(in                thousands)**          |   |
|---------------------------------------------|--------|--------------------------------------------|--------|
|                                        |   | **Year                Ended December 31,** |   |
|                                        |   | **2004**                                   |   | **2005** |   | **2006** |   |
|                                        |   | **Predecessor**                            |   | **Successor** |   | **Successor** |   |
| Balance                beginning of year    |   | $                                          | 286    |   | $ | - |   | $ | 948 |   |
| Charged                to cost and expenses |   |                                       | 1,053  |   |   | 322 |   |   | 65 |   |
| Acquisitions                                |   |                                       | -      |   |   | 1,201 |   |   | 291 |   |
| Deductions                (1)               |   |                                       | (821   | ) |   | (575 | ) |   | (327 | ) |
| Balance                end of year          |   | $                                          | 518    |   | $ | 948 |   | $ | 977 |   |

*Unbilled      Accounts Receivable*

*Concentration      of Credit*
*Risk      *

*Inventories*

*Property      and Depreciation*

*Goodwill      and Other Intangible Assets*

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

*Impairment      of Long-Lived Assets*

*Shipping      and Handling Fees and Costs*

*Income      Taxes*
**—**

*Fair      Values of Financial Instruments*

*Revenue      Recognition*

*Accounting      for Stock-Based Compensation*

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

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

|                                                                                                                                                                     |   | **For                    the years ended December 31,** |   | **For                    the two months ended February 28,** |   | **For                    the years ended December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|--------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                                                                                                                     |   | **2004**                                                |   | **2005**                                                     |   | **2004**                                                |   | **2005** |   |
|                                                                                                                                                                     |   | **Predecessor**                                         |   | **Predecessor**                                              |   | **Successor**                                           |   | **Successor** |   |
|                                                                                                                                                                     |   |                                                    |   |                                                         |   |                                                    |   |   |   |
| Net                    income (loss) available to common stockholders - As                    Reported                                                                   |   | $                                                       | 1,526  |                                                         | $      | (1,167                                                  | )      | $ | (2,432 | ) | $ | 9,061 |   |
| Deduct:                    Total stock-based employee compensation expense determined under                    fair                    value based method for all awards |   |                                                    | -      |                                                         |   | -                                                       |   |   | (62 | ) |   | (337 | ) |
| Net                    income (loss) - Pro Forma                                                                                                                         |   | $                                                       | 1,526  |                                                         | $      | (1,167                                                  | )      | $ | (2,494 | ) | $ | 8,724 |   |
| Net                    income (loss) per share available to common shareholders                    (Basic):                                                              |   |                                                    |   |                                                         |   |                                                    |   |   |   |   |   |   |   |
| As                    Reported                                                                                                                                           |   |                                                    | N/A    |                                                         |   | N/A                                                     |   | $ | (0.32 | ) | $ | 1.19 |   |
| Pro                    Forma                                                                                                                                             |   |                                                    | N/A    |                                                         |   | N/A                                                     |   | $ | (0.33 | ) | $ | 1.14 |   |
|                                                                                                                                                                     |   |                                                    |   |                                                         |   |                                                    |   |   |   |   |   |   |   |
| Net                    income (loss) per share available to common shareholders                    (Diluted):                                                            |   |                                                    |   |                                                         |   |                                                    |   |   |   |   |   |   |   |
| As                    Reported                                                                                                                                           |   |                                                    | N/A    |                                                         |   | N/A                                                     |   | $ | (0.32 | ) | $ | 1.18 |   |
| Pro                    Forma                                                                                                                                             |   |                                                    | N/A    |                                                         |   | N/A                                                     |   | $ | (0.33 | ) | $ | 1.13 |   |

*Earnings      Per Share - *

*Segment      Reporting*

*Deferred      Rent Policy*

*Reclassifications      - *

*New      Accounting Pronouncements*

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **3.  ** | **Acquisitions** |
|--------------------|------------------|

| **(in                thousands)**                              |   |
|----------------------------------------------------------------|--------|
| Trade                accounts receivable                       |   | $ | 12,178 |   |
| Inventory                                                      |   |   | 1,406 |   |
| Other                current assets                            |   |   | 299 |   |
| Fixed                assets                                    |   |   | 3,773 |   |
| Restricted                cash                                 |   |   | 2,310 |   |
| Other                assets                                    |   |   | 39 |   |
| Intangible                assets                               |   |   | 5,900 |   |
| Trademark                                                      |   |   | 10,311 |   |
| Goodwill                                                       |   |   | 10,996 |   |
| Accounts                payable                                |   |   | (3,969 | ) |
| Accrued                liabilities                             |   |   | (2,085 | ) |
| Long                term debt and capital lease obligations    |   |   | (9,935 | ) |
|                                                           |   |   |   |   |
| Total                purchase price, net of $424 cash received |   | $ | 31,223 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **(in                thousands)**                              |   |
|----------------------------------------------------------------|--------|
| Trade                accounts receivable                       |   | $ | 3,165 |   |
| Inventory                                                      |   |   | 543 |   |
| Other                assets                                    |   |   | 79 |   |
| Fixed                assets                                    |   |   | 2,958 |   |
| Goodwill                                                       |   |   | 2,575 |   |
| Trademark                                                      |   |   | 141 |   |
| Other                intangible assets                         |   |   | 2,140 |   |
| Accounts                payable                                |   |   | (1,009 | ) |
| Accrued                liabilities                             |   |   | (658 | ) |
| Long                term debt and capital lease obligations    |   |   | (2,536 | ) |
| Total                purchase price, net of $454 cash received |   | $ | 7,398 |   |

| **(in                thousands)**      |   |
|----------------------------------------|--------|
| Inventory                              |   | $ | 14 |   |
| Fixed                assets            |   |   | 120 |   |
| Goodwill                               |   |   | 842 |   |
| Trademark                              |   |   | 2 |   |
| Other                intangible assets |   |   | 121 |   |
| Accounts                payable        |   |   | (55 | ) |
| Accrued                liabilities     |   |   | (14 | ) |
| Total                purchase price    |   | $ | 1,030 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **(in                thousands)**                              |   |
|----------------------------------------------------------------|--------|
| Accounts                receivable                             |   | $ | 757 |   |
| Prepaid                expenses and other current assets       |   |   | 28 |   |
| Fixed                assets                                    |   |   | 462 |   |
| Goodwill                                                       |   |   | 853 |   |
| Trademark                                                      |   |   | 3 |   |
| Other                intangible assets                         |   |   | 139 |   |
| Accounts                payable                                |   |   | (147 | ) |
| Accrued                liabilities                             |   |   | (163 | ) |
| Notes                payable and capital leases                |   |   | (164 | ) |
| Total                purchase price, net of $317 cash received |   | $ | 1,768 |   |

| **(in                thousands)**                        |   |
|----------------------------------------------------------|--------|
| Trade                accounts receivable                 |   | $ | 3,465 |   |
| Prepaid                expenses and other current assets |   |   | 177 |   |
| Fixed                assets                              |   |   | 825 |   |
| Goodwill                                                 |   |   | 1,792 |   |
| Trademark                                                |   |   | 143 |   |
| Other                intangible assets                   |   |   | 2,169 |   |
| Accounts                payable                          |   |   | (983 | ) |
| Accrued                liabilities                       |   |   | (623 | ) |
| Capital                lease obligations                 |   |   | (480 | ) |
| Total                purchase price                      |   | $ | 6,485 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| Pro                  Forma, unaudited, in thousands, except per share amounts |   | **Fiscal                  year ended December 31,** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                          |   | **2004**                                            |   | **2005** |   | **2006** |   |
|                                                                          |   |                                                |   |   |   |   |   |
| Total                  revenue                                                |   | $                                                   | 80,113 |   | $ | 102,222 |   | $ | 97,616 |   |
| Net                  income from continuing operations                        |   |                                                | 2,230  |   |   | 6,797 |   |   | 8,044 |   |
| Basic                  and Diluted earnings per share                         |   | $                                                   | 0.29   |   | $ | 0.89 |   | $ | 1.03 |   |

| **4.  ** | **Restricted                Cash** |
|--------------------|------------------------------------|

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **5.  ** | **Intangibles** |
|--------------------|-----------------|

|                                                 |   | **December                  31, 2006**    |   |
|------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                 |   | **Successor**                             |   |
|                                                 |   |  **Acquired                  Value** |   |  **Accumulated                  Amortization** |   |  **Carrying                  Value** |   | **Weighted                  Average Amortization Period** |   |
| Customer                  relationships              |   | $                                         | 3,799  |   | $ | 384 |   | $ | 3,415 |   |   | 16 |   |
| Non-compete                  agreements              |   |                                      | 4,534  |   |   | 1,362 |   |   | 3,172 |   |   | 5 |   |
| Software                  licenses                   |   |                                      | 90     |   |   | 86 |   |   | 4 |   |   | 1 |   |
| Domain                  name                         |   |                                      | 3      |   |   | 3 |   |   | - |   |   | 1 |   |
| Employment                  agreements               |   |                                      | 703    |   |   | 146 |   |   | 557 |   |   | 4 |   |
| Trade                  know how                      |   |                                      | 1,341  |   |   | 135 |   |   | 1,206 |   |   | 8 |   |
| Subtotal                  definite lived intangibles |   |                                      | 10,470 |   |   | 2,116 |   |   | 8,354 |   |   | 9.3 |   |
| Trademark                                            |   |                                      | 10,609 |   |   | - |   |   | 10,609 |   |   | Indefinite |   |
| Total                                                |   | $                                         | 21,079 |   | $ | 2,116 |   | $ | 18,963 |   |   |   |   |
|                                                 |   |                                      |   |   |   |   |   |   |   |   |   |   |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

|                                                       |   | **December                  31, 2005**    |   |
|------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                       |   |  **Successor**                  |   |
|                                                       |   |  **Acquired                  Value** |   |  **Accumulated                  Amortization** |   |  **Carrying                  Value** |   |  **Weighted                  Average Amortization Period** |   |
|  Customer                  relationships              |   | $                                         | 3,188  |   | $ | 162 |   | $ | 3,026 |   |   | 16 |   |
|  Non-compete                  agreements              |   |                                      | 3,659  |   |   | 559 |   |   | 3,100 |   |   | 5 |   |
|  Software                  licenses                   |   |                                      | 79     |   |   | 67 |   |   | 12 |   |   | 1 |   |
|  Domain                  name                         |   |                                      | 3      |   |   | 3 |   |   | - |   |   | 1 |   |
|  Employment                  agreements               |   |                                      | 349    |   |   | 36 |   |   | 313 |   |   | 4 |   |
|  Trade                  know how                      |   |                                      | 615    |   |   | 32 |   |   | 58 |   |   | 8 |   |
|  Subtotal                  definite lived intangibles |   |                                      | 7,893  |   |   | 859 |   |   | 7,034 |   |   | 9.3 |   |
|  Trademark                                            |   |                                      | 10,452 |   |   | - |   |   | 10,452 |   |   | Indefinite |   |
|  Total                                                |   | $                                         | 18,345 |   | $ | 859 |   | $ | 17,486 |   |   |   |   |

| **For                  the year ended December 31,** |   |       |   |
|------------------------------------------------------|--------|------------|--------|
|                                                 |   | **Amount** |   |
| 2007                                                 |   | $          | 1,497  |   |
| 2008                                                 |   |       | 1,493  |   |
| 2009                                                 |   |       | 1,457  |   |
| 2010                                                 |   |       | 833    |   |
| 2011                                                 |   |       | 516    |   |
| Thereafter                                           |   |       | 2,558  |   |
|                                                 |   | $          | 8,354  |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

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

|                                    |   | **December                31,** |   |
|-----------------------------------------|--------|---------------------------------|--------|
|                                    |   | **2005**                        |   | **2006** |   |
|                                    |   | **Successor**                   |   | **Successor** |   |
| Raw                materials            |   | $                               | 1,260  |   | $ | 1,357 |   |
| Work-in-progress                        |   |                            | 372    |   |   | 789 |   |
| Reserve                for obsolescence |   |                            | (17    | ) |   | (11 | ) |
| Inventory,                net           |   | $                               | 1,615  |   | $ | 2,135 |   |

| **7.  ** | **Property                and Equipment** |
|--------------------|-------------------------------------------|

|                                                           |   | **2005**      |   | **2006**      |   |
|----------------------------------------------------------------|--------|---------------|--------|---------------|--------|
|                                                           |   | **Successor** |   | **Successor** |   |
| Equipment                under capitalized leases              |   | $             | 1,552  |          |   | 1,552 |   |
| Machinery                and equipment                         |   |          | 7,817  |          |   | 6,703 |   |
| Furniture                and fixtures                          |   |          | 180    |          |   | 615 |   |
| Automobiles                                                    |   |          | 205    |          |   | 68 |   |
| Leasehold                improvements                          |   |          | 2,430  |          |   | 2,184 |   |
| Total                                                          |   |          | 12,184 |          |   | 11,122 |   |
| Less:                accumulated depreciation and amortization |   |          | (5,202 | )             |   | (2,767 | ) |
| Net                book value                                  |   | $             | 6,982  |          | $      | 8,355 |   |

| **8.  ** | **Accrued                Expenses** |
|--------------------|-------------------------------------|

|                                                       |   | **2005**      |   | **2006**      |   |
|------------------------------------------------------------|--------|---------------|--------|---------------|--------|
|                                                       |   | **Successor** |   | **Successor** |   |
| Accrued                liabilities:                        |   |          |   |          |   |   |   |
| Compensation                and other benefit accruals     |   | $             | 4,680  |          | $      | 4,576 |   |
| State                and local sales taxes and other taxes |   |          | 166    |          |   | 526 |   |
| Other                accruals                              |   |          | 1,395  |          |   | 1,827 |   |
| Total                accrued liabilities                   |   | $             | 6,241  |          | $      | 6,929 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **9.  ** | **Income                Taxes** |
|--------------------|---------------------------------|

|                                                               |   | **December                  31,** |    |
|--------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                               |   | **2005**                          |    | **2006** |   |
|                                                               |   | **Successor**                     |    | **Successor** |   |
| Deferred                  tax assets:                              |   |                              |    |   |   |   |   |
| Net                  operating loss carryforwards                  |   | $                                 | 92,135  |   | $ | 88,512 |   |
| AMT                  credit carryforward                           |   |                              | -       |   |   | 80 |   |
| Allowance                  for doubtful accounts                   |   |                              | 115     |   |   | 348 |   |
| Depreciable                  assets                                |   |                              | 393     |   |   | 464 |   |
| Other                  intangible assets                           |   |                              | -       |   |   | 450 |   |
| Deferred                  vacation and bonus                       |   |                              | 751     |   |   | 376 |   |
| Deferred                  occupancy costs                          |   |                              | -       |   |   | 213 |   |
| Inventory                  uniform capitalization                  |   |                              | 214     |   |   | 248 |   |
| Stock-based                  compensation                          |   |                              | -       |   |   | 243 |   |
| Restructuring                                                      |   |                              | -       |   |   | - |   |
| Other                                                              |   |                              | 15      |   |   | 20 |   |
| Total                  deferred tax asset                          |   |                              | 93,623  |   |   | 90,954 |   |
|                                                               |   |                              |    |   |   |   |   |
| Deferred                  tax liabilities                          |   |                              |    |   |   |   |   |
| Deferred                  occupancy costs                          |   |                              | 113     |   |   | - |   |
| Restructuring                                                      |   |                              | 339     |   |   | - |   |
| Goodwill                  and trademarks                           |   |                              | -       |   |   | 1,229 |   |
| Total                  deferred tax liabilities                    |   |                              | 452     |   |   | 1,229 |   |
|                                                               |   |                              |    |   |   |   |   |
| Net                  deferred tax asset before valuation allowance |   |                              | 93,171  |   |   | 89,725 |   |
| Valuation                  allowance                               |   |                              | (93,171 | ) |   | (86,128 | ) |
|                                                               |   |                              |    |   |   |   |   |
| Net                  deferred tax asset                            |   | $                                 | -       |   | $ | 3,597 |   |
|                                                               |   |                              |    |   |   |   |   |
| Balance                  sheet classification:                     |   |                              |    |   |   |   |   |
| Current                  asset                                     |   | $                                 | -       |   | $ | 2,431 |   |
| Non-current                  asset                                 |   |                              | -       |   |   | 1,166 |   |
|                                                               |   |                              |    |   |   |   |   |
|                                                               |   |  $                           | -       |   | $ | 3,597 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

|                                                  |   | **For                  the Years ended****December                  31,** |   | **For                  the Two Months ended February 28,** |   | **For                  the Years ended****December                  31,** |   |
|-------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|                                                  |   | **2004**                                                                  |   | **2005**                                                   |   | **2004**                                                                  |   | **2005** |   | **2006** |   |
|                                                  |   | **Predecessor**                                                           |   | **Predecessor**                                            |   | **Successor**                                                             |   | **Successor** |   | **Successor** |   |
|                                                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |
| Continuing                  Operations:               |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Current                                               |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Federal                                               |   | $                                                                         | 666    |                                                       | $      | -                                                                         |   | $ | - |   | $ | 107 |   | $ | 76 |   |
| State                                                 |   |                                                                      | 377    |                                                       |   | -                                                                         |   |   | - |   |   | 818 |   |   | 241 |   |
| Total                  current provision              |   | $                                                                         | 1,043  |                                                       | $      | -                                                                         |   | $ | - |   | $ | 925 |   | $ | 317 |   |
|                                                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Deferred,                  net of valuation allowance |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Federal                                               |   | $                                                                         | 519    |                                                       | $      | -                                                                         |   | $ | - |   | $ | - |   | $ | (3,699 | ) |
| State                                                 |   |                                                                      | 295    |                                                       |   | -                                                                         |   |   | - |   |   | - |   |   | 102 |   |
| Total                  deferred provision             |   | $                                                                         | 814    |                                                       | $      | -                                                                         |   | $ | - |   | $ | - |   | $ | (3,597 | ) |
|                                                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Total                  income tax provision           |   | $                                                                         | 1,857  |                                                       | $      | -                                                                         |   | $ | - |   | $ | 925 |   | $ | (3,280 | ) |
|                                                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Discontinued                  Operations:             |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |
| Federal                                               |   | $                                                                         | -      |                                                       | $      | -                                                                         |   | $ | 92 |   | $ | 93 |   | $ | 22 |   |
| State                                                 |   |                                                                      | -      |                                                       |   | -                                                                         |   |   | - |   |   | 705 |   |   | 138 |   |
| Total                  provision (benefit)            |   | $                                                                         | -      |                                                       | $      | -                                                                         |   | $ | 92 |   | $ | 798 |   | $ | 160 |   |
|                                                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |   |

|                                                       |   | **For                  the Years ended****December                  31,** |   | **For                  the Two Months ended February 28,** |   | **For                  the Years ended****December                  31,** |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|                                                       |   | **2004**                                                                  |   | **2005**                                                   |   | **2004**                                                                  |   | **2005** |   | **2006** |   |
|                                                       |   | **Predecessor**                                                           |   | **Predecessor**                                            |   | **Successor**                                                             |   | **Successor** |   | **Successor** |   |
|                                                       |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |
| Statutory                  rate                            |   |                                                                      | 35.0   | %                                                          |   | 35.0                                                                      | %      |   | 35.0 | % |   | 35.0 | % |   | 35.0 | % |
| Change                  in valuation allowance             |   |                                                                      | -      |                                                       |   | (35.0                                                                     | )      |   | (35.0 | ) |   | (35.0 | ) |   | (179.0 | ) |
| Prior                  year under-accrual                  |   |                                                                      |   |                                                       |   |                                                                      |   |   |   |   |   |   |   |   | 53.9 |   |
| State                  and local income taxes              |   |                                                                      | 19.9   | %                                                          |   | -                                                                         |   |   | - |   |   | 12.1 |   |   | 7.9 |   |
| Certain                  non-deductible expenses and other |   |                                                                      | -      |                                                       |   | -                                                                         |   |   | - |   |   | 1.6 |   |   | 3.0 |   |
| Effective                  tax rate                        |   |                                                                      | 54.9   | %                                                          |   | 0.0                                                                       | %      |   | 0.0 | % |   | 13.7 | % |   | (79.2 | %) |

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **10.  ** | **Debt** |
|---------------------|----------|

| 2007  |   | $      | 596    |   |
|-------|--------|--------|--------|--------|
| 2008  |   |   | 9,096  |   |
| 2009  |   |   | 410    |   |
| Total |   | $      | 10,102 |   |

|                                      |   |   |   |
|-------------------------------------------|--------|--------|--------|
| **Current:**                              |   |   |   |
| Installment                notes          |   | $      | 596    |   |
| **Non-current:**                          |   |   |   |   |
| Revolving                credit agreement |   | $      | 8,630  |   |
| Installment                notes          |   |   | 876    |   |
|                                      |   |   | 9,506  |   |
|                                      |   |   |   |   |
| Total                                     |   | $      | 10,102 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **11.  ** | **Discontinued                Operations** |
|---------------------|--------------------------------------------|

|                                                          |   | **2004** |   |
|---------------------------------------------------------------|--------|----------|--------|
| Net                Sales                                      |   | $        | 38,101 |   |
| Cost                of Sales                                  |   |     | 34,505 |   |
| Gross                Profit                                   |   |     | 3,596  |   |
|                                                          |   |     |   |   |
| Selling,                General & Administrative Expenses |   |     | 1,215  |   |
| Restructuring                Charge (Recovery)                |   |     | (1,093 | ) |
| Impairment                Charge                              |   |     | 130    |   |
| Operating                Income                               |   |     | 3,344  |   |
|                                                          |   |     |   |   |
| Interest                Income                                |   |     | 153    |   |
| Other                Income                                   |   |     | 135    |   |
| Income                before Provision for Income Tax         |   |     | 3,632  |   |
|                                                          |   |     |   |   |
| Income                Tax Benefit (provision)                 |   |     | (92    | ) |
| Net                Income                                     |   | $        | 3,540  |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

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

| **(in                  thousands)**                 |   |                                |   |                                  |   |                                     |   |
|-----------------------------------------------------|--------|-------------------------------------|--------|---------------------------------------|--------|------------------------------------------|--------|
|  **Year                  Ending December 31,** |   | **Capital                  Leases** |   | **Operating                  Leases** |   | **Contingent                  Payments** |   |
| 2007                                                |   | $                                   | 630    |                                  | $      | 3,993                                    |   | $ | 1,733 |   |
| 2008                                                |   |                                | 312    |                                  |   | 4,073                                    |   |   | 11,182 |   |
| 2009                                                |   |                                | 60     |                                  |   | 4,182                                    |   |   | 1,167 |   |
| 2010                                                |   |                                | 16     |                                  |   | 4,332                                    |   |   | 302 |   |
| 2011                                                |   |                                | -      |                                  |   | 4,005                                    |   |   | - |   |
| Thereafter                                          |   |                                | -      |                                  |   | 6,725                                    |   |   | - |   |
| Total                  minimum lease payments       |   | $                                   | 1,018  |                                  | $      | 27,310                                   |   | $ | 14,384 |   |

*In      re: Bridge Information Systems, Inc., *
*Scott      P. Peltz, Chapter 11 Plan Administrator v. Merisel Americas, Inc. and MOCA,      *

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **13.  ** | **Stock** |
|---------------------|-----------|

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **14.  ** | **Employee                Stock Options and Benefit                Plans** |
|---------------------|----------------------------------------------------------------------------|

*Employee      Stock Options and Stock Awards*

|                                                                                                          |   | **2004**               |    | **2005**                                              |   | **2006**               |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|-------------------------------------------------------|--------|------------------------|--------|
|                                                                                                          |   |   **Shares** |    | **Weighted****Average****Exer.                Price** |   |   **Shares** |   | **Weighted****Average****Exer.                Price** |   |   **Shares** |   | **Weighted****Average****Exer.                Price** |   |
| Outstanding                at beginning of year                                                               |   |                   | 80,945  |                                                  |   | 18.04                  |   |   | 342,380 |   |   | 9.65 |   |   | 330,200 |   |   | 9.17 |   |
| Granted                                                                                                       |   |                   | 300,000 |                                                  |   | 5.56                   |   |   | - |   |   | N/A |   |   | - |   |   | N/A |   |
| Exercised                                                                                                     |   |                   | (7,500  | )                                                     |   | 2.00                   |   |   | - |   |   | N/A |   |   | - |   |   | N/A |   |
| Canceled                                                                                                      |   |                   | (31,065 | )                                                     |   | 20.59                  |   |   | (12,180 | ) |   | 22.74 |   |   | - |   |   | N/A |   |
| Outstanding                at end of year                                                                     |   |                   | 342,380 |                                                  |   | 6.71                   |   |   | 330,200 |   |   | 9.17 |   |   | 330,200 |   |   | 9.17 |   |
|  Options                exercisable at year end                                                          |   |                   | 42,380  |                                                  |   |                   |   |   | 180,200 |   |   |   |   |   | 255,200 |   |   |   |   |
| Weighted                average fair value at date of grant of options granted during the                year |   |                   | 8.33    |                                                  |   |                   |   |   | N/A |   |   |   |   |   | N/A |   |   |   |   |

|                                   |   | **2004** |   |
|----------------------------------------|--------|----------|--------|
| Expected                life           |   |     | 5.0    |   |
| Expected                volatility     |   |     | 90.86  | % |
| Risk-free                interest rate |   |     | 3.70   | % |
| Dividend                Yield     |   |     | 0.00   | % |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

|                                                   |   | **Shares** |    | **Weighted                  Average Grant-Date Fair Value** |   |
|--------------------------------------------------------|--------|------------|---------|-------------------------------------------------------------|--------|
| Nonvested                  shares at December 31, 2005 |   |       | 75,000  |                                                        | $      | 4.61 |   |
| Granted                                                |   |       | 245,643 |                                                        | $      | 4.19 |   |
| Vested                                                 |   |       | (69,153 | )                                                           | $      | 4.25 |   |
| Cancelled                                              |   |       | -       |                                                        |   | - |   |
| Nonvested                  shares at December 31, 2006 |   |       | 251,490 |                                                        | $      | 4.29 |   |

*Benefit      Plan*

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

*Stock      repurchase program*

| **15.  ** | **Earnings                Per Share** |
|---------------------|---------------------------------------|

|                                               |   | **For                the Years Ended December 31,** |     |
|----------------------------------------------------|--------|-----------------------------------------------------|----------|
|                                               |   | **Successor**                                       |     |
| Weighted                average shares outstanding |   |                                                | **2004** |   |   | **2005** |   |   | **2006** |   |
| Basic                                              |   |                                                | 7,620    |   |   | 7,640 |   |   | 7,744 |   |
| Diluted                                            |   |                                                | 7,620    |   |   | 7,670 |   |   | 7,816 |   |

|                                                              |   | **2004** |   | **2005** |   | **2006** |   |
|-------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Income                (loss) from operations                      |   | $        | (1,690 | )        | $      | 5,819    |   | $ | 6,307 |   |
| Preferred                stock dividends                          |   |     | 1,639  |     |   | 1,774    |   |   | 1,920 |   |
| Income                (loss) to common stockholders               |   |     | (3,329 | )        |   | 4,045    |   |   | 4,387 |   |
| Income                from discontinued operations                |   |     | 3,540  |     |   | -        |   |   | 748 |   |
| Gain                (loss) on sale of software licensing business |   |     | (2,643 | )        |   | 5,016    |   |   | - |   |
| Net                income (loss) available to common stockholders |   | $        | (2,432 | )        | $      | 9,061    |   | $ | 5,135 |   |

| **16.  ** | **Related                Party Transactions** |
|---------------------|-----------------------------------------------|

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

| **17.  ** | **Quarterly                Financial Data (Unaudited)** |
|---------------------|---------------------------------------------------------|

|                                                          |   | **2005**                    |   |
|---------------------------------------------------------------|--------|-----------------------------|--------|
|                                                          |   | **(Successor)**             |   |
|                                                          |   | **March                31** |   | **June                30** |   | **September                30** |   | **December                31** |   |
| Total                net revenues                        |   | $                           | 5,823  |   | $ | 15,372 |   | $ | 19,970 |   | $ | 21,844 |   |
| Gross                profit                              |   |                        | 3,117  |   |   | 8,428 |   |   | 9,847 |   |   | 12,369 |   |
| Total                operating expenses                  |   |                        | 2,791  |   |   | 6,288 |   |   | 7,945 |   |   | 9,729 |   |
| Income                tax provision                           |   |                        | 9      |   |   | 27 |   |   | 27 |   |   | 862 |   |
| Income                from continuing operations         |   |                        | 440    |   |   | 2,036 |   |   | 1,755 |   |   | 1,588 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | 2,152  |   |   | - |   |   | 3,491 |   |   | (627 | ) |
| Net                income                                     |   | $                           | 2,592  |   | $ | 2,036 |   | $ | 5,246 |   | $ | 961 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share (basic):                    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations              |   | $                           | 0.00   |   | $ | 0.21 |   | $ | 0.17 |   | $ | 0.15 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | 0.28   |   |   | - |   |   | 0.46 |   |   | (0.08 | ) |
| Net                income                                     |   | $                           | 0.28   |   | $ | 0.21 |   | $ | 0.63 |   | $ | 0.07 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share (diluted):                  |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations              |   | $                           | 0.00   |   | $ | 0.21 |   | $ | 0.17 |   | $ | 0.15 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | 0.28   |   |   | - |   |   | 0.46 |   |   | (0.09 | ) |
| Net                income                                     |   | $                           | 0.28   |   | $ | 0.21 |   | $ | 0.63 |   | $ | 0.06 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | **2006**                    |
| **(Successor)**                                               |   |                        |
| **March                31**                                   |   |                        |   |   |   | **June                30** |   |   | **September                30** |   |   | **December                31** |   |
| Total                net revenues                        |   | $                           | 21,137 |   | $ | 17,968 |   | $ | 20,677 |   | $ | 24,841 |   |
| Gross                profit                              |   |                        | 10,763 |   |   | 8,621 |   |   | 10,567 |   |   | 12,344 |   |
| Total                operating expenses                  |   |                        | 9,300  |   |   | 8,999 |   |   | 9,098 |   |   | 10,555 |   |
| Restructuring                charge                           |   |                        | 724    |   |   | - |   |   | - |   |   | - |   |
| Income                tax provision                           |   |                        | 96     |   |   | (78 | ) |   | 194 |   |   | (3,492 | ) |
| Income                from continuing operations         |   |                        | 468    |   |   | (351 | ) |   | 1,189 |   |   | 5,008 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | -      |   |   | 1,003 |   |   | (19 | ) |   | (236 | ) |
| Net                income                                     |   | $                           | 468    |   | $ | 652 |   | $ | 1,170 |   | $ | 4,772 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share (basic):                    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations              |   | $                           | 0.00   |   | $ | (0.11 | ) | $ | 0.09 |   | $ | 0.58 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | 0.00   |   |   | 0.13 |   |   | 0.00 |   |   | (0.03 | ) |
| Net                income                                     |   | $                           | 0.00   |   | $ | 0.02 |   | $ | 0.09 |   | $ | 0.55 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share (diluted):                  |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations              |   | $                           | 0.00   |   | $ | (0.11 | ) | $ | 0.09 |   | $ | 0.58 |   |
| Gain                (loss) on sale of discontinued operations |   |                        | 0.00   |   |   | 0.13 |   |   | 0.00 |   |   | (0.03 | ) |
| Net                income                                     |   | $                           | 0.00   |   | $ | 0.02 |   | $ | 0.09 |   | $ | 0.55 |   |

----

**MERISEL,      INC. AND SUBSIDIARIES**

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

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

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

**Item      9A. Controls and Procedures**

**Item      9B.** **Other      Information.**

----

**PART      III**

**Item      10. Directors, Executive Officers and Corporate      Governance**

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

**Code      of Business Conduct**

**Item      11. Executive Compensation **

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

**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 the stockholders |          | 330,200(2)                                                                                                                                    |   | $9.17                                                                                                                    |   | 64,432(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 and Director      Independence.**

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

----

**PART      IV **

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

**1.**
**Financial        Statements included in Item 8: **

| ·   | Report                of Independent Registered Public Accounting                Firm. |
|--------------------|----------------------------------------------------------------------------------------|
| ·   | Independent                Auditors’ Reports |
|--------------------|----------------------------------------------------|
| ·   | Consolidated                Balance Sheets at December 31, 2005 and                2006. |
|--------------------|------------------------------------------------------------------------------------------|
| ·   | Consolidated                Statements of Operations for each of the three years in the period                ended                December 31, 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Predecessor                Consolidated Statements of Operations for the year ended December                31, 2004                and for the two months ended February 28,                2005. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Consolidated                Statements of Changes in Stockholders’ Equity for each of the three years                in the period ended December 31, 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Predecessor                Consolidated Statements of Changes in Stockholders’ Equity for each of the                year ended December 31, 2004 and for the two months ended February                28,                2005. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Consolidated                Statements of Cash Flows for each of the three years in the period                ended                December 31, 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Predecessor                Consolidated Statements of Cash Flows for the year ended December                31, 2004                and for the two months ended February 28,                1005. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Notes                to Consolidated Financial Statements. |
|--------------------|------------------------------------------------------------|

**2.**
**Financial        Statement Schedules included in Item 8:**

**3.**
**Exhibits:**

----

**SIGNATURES**

|                                   |                                                                                          |                                  |
|----------------------------------------|-----------------------------------------------------------------------------------------------|---------------------------------------|
|                                   | **MERISEL,              INC.**                                                                |
|                              |                                                                                     |                             |
| Date: April              17, 2007 | By:                                                                                 | /s/ Donald.              R. Uzzi |
|                                   | Donald R. Uzzi                                                                                |
|                                   | Title:              Chairman of the Board, Chief Executive Officer and              President |

**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)  | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |
| /s/Jon                H. PetersonJon                H. Peterson                           | Chief                Financial Officer(Principal                Accounting Officer)                                            | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |
| /s/Ronald                P. BadieRonald                P. Badie                      | Director                                                                                                                       | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |
| /s/Albert                J. Fitzgibbons IIIAlbert                J. Fitzgibbons III  | Director                                                                                                                       | April                17, 20076 |
|                                                                                      |                                                                                                                           |                           |
| /s/Bradley                J. HoeckerBradley                J. Hoecker                | Director                                                                                                                       | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |
| /s/Edward                A. GrantEdward                A. Grant                           | Director                                                                                                                       | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |
| /s/Lawrence                J. SchoenbergLawrence                J. Schoenberg             | Director                                                                                                                  | April                17, 2007  |
|                                                                                      |                                                                                                                           |                           |

----

**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., MCEV, LLC, Color Edge Visual, Inc. (“CEV”), Photobition New                York, Inc. (“PBNY”) and the direct or indirect shareholders or 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. **                                             |
| 2.2         | 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. **                                             |
| 2.3         | 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. **                                             |
| 2.4         | 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. **                                             |
| 2.5         | 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. **                                             |
| 2.6         | Asset                Purchase Agreement dated as of July 6, 2005 by and among Merisel,                Inc.,                MCRU, LLC, Crush Creative, Inc. (“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. **                                            |
| 2.7         | Amendment                and Waiver to Asset Purchase Agreement, dated as of August 8, 2005                by and                among Merisel, Inc., MCRU, LLC, Crush Creative, Inc. 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. **                                            |
| 2.8         | Asset                Purchase Agreement dated as of October 4, 2006 by and among Merisel,                Inc.,                Merisel FD, Fuel Digital, LLC and the shareholders of Fuel signatories                thereto.                                                                                                                                                                                                                                                                            |   | Filed                as Exhibit 2.1 to the Company's Current Report on Form 8-K filed                with the                SEC on October 6, 2006. **                                  |
| 3.1         | Restated                Certificate of Incorporation of Merisel, Inc., as amended.                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Filed                as Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year                ended December 31, 2005. **                                            |
| 3.2         | Bylaws                of Merisel, Inc., as amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Filed                as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year                ended December 31, 2005. **                                            |
| 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,                LLC.                                                                                                                                                                                                                                                                                        |   | 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., LLC 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., and SYNNEX Information Technologies, Inc.                                                                                                                                                                                                                                                                                                                                      |   | 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                R.                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      | 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      | 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      | 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, MCEV,                LLC,                Merisel, Inc., Merisel Americas, Inc., and Amalgamated                Bank.                                                                                                                                                                                                                                                                                                  |   | 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, MCEV, LLC,                Merisel, Inc., Merisel Americas, Inc., and MC24, LLC, 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, Merisel,                Inc.,                Merisel Americas, Inc., and Amalgamated Bank.                                                                                                                                                                                                                                                                                                                            |   | 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.,                Merisel Americas Inc., MCEI, LLC, MCEV, LLC, and each of their                Subsidiaries from time to time parties 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 10.1 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, Inc. the 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. **                                           |
| *10.41      | Amendment                to Employment Agreement dated November 22, 2004 between Merisel,                Inc. and                Donald R. Uzzi.                                                                                                                                                                                                                                                                                                                                                        |   | Filed                as Exhibit 10.1 to the Company’s current report on Form 8-K filed with the                SEC on March 9, 2006.                                               |
| *10.42      | Form                of Indemnity Agreement entered into between Merisel, Inc. and each                of its                Directors and certain Officers.                                                                                                                                                                                                                                                                                                                                             |   | Filed                as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the                SEC on March 9, 2006.                                               |
| 10.43       | Amendment                No. 2 to Asset Purchase Agreement and Amendment to Confidentiality                and                Non-Competition Agreement (MCEI).                                                                                                                                                                                                                                                                                                                                         |   | Filed                as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the                SEC on May 1, 2006. **                                              |
| 10.44       | Amendment                No. 2 to Asset Purchase Agreement and Amendment to Confidentiality                and                Non-Competition Agreement (MCEV).                                                                                                                                                                                                                                                                                                                                         |   | Filed                as Exhibit 10.2 to the Company's Current Report on Form 8-K filed                with the                SEC on May 1, 2006. **                                     |
| *10.45      | 1997                Merisel Inc. Stock Award and Incentive Plan Form of Restricted Stock                Agreement for Executives and Key Employees.                                                                                                                                                                                                                                                                                                                                                     |   | Filed                as Exhibit                10.1** **to                the Company’s Current Report on Form 8-K filed with the SEC on December                19, 2006. ** |
| 10.46       | 1997                Merisel Inc. Stock Award and Incentive Plan Form of Restricted Stock                Agreement for** **Directors.                                                                                                                                                                                                                                                                                                                                                               |   | Filed                as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the                SEC on December 19, 2006.**                                         |
| *10.47      | Employment                Agreement dated May 1, 2006 between Jon                H. Peterson and Merisel, Inc.                                                                                                                                                                                                                                                                                                                                                                                          |   | Filed                herewith.                                                                                                                                                           |
| 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, LLPIndependent                Registered Accounting Firm                                                                                                                                                                                                                                                                                                                                                                                                         |   | Filed                herewith.                                                                                                                                                 |
| 23.1        | Copy                of the Consent of Weinick, Sanders &                Leventhal, independent registered accounting firm (now defunct) dated                July                6, 2005                                                                                                                                                                                                                                                                                                            |   | 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.                                                                                                                                                           |