<PAGE>   1



                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                  For the quarterly period ended June 30, 1999

                                       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: 1-8456

                             THE CERPLEX GROUP, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter.)


                   Delaware                                   75-1539534
       (State or other jurisdiction of                     (I.R.S. Employer
       incorporation or organization.)                   Identification No.)


             111 PACIFICA AVENUE SUITE 300,IRVINE, CALIFORNIA 92618
-------------------------------------------------------------------------------
               (Address of principal executive office.) (Zip Code)

                                 (949) 754-5300
-------------------------------------------------------------------------------
               Registrant's telephone number, including area code.

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

                                 Yes [X] No [ ]

Indicated below is the number of shares outstanding of each class of the
registrant's Common Stock, as of August 11, 1999:

     TITLE OF EACH CLASS OF COMMON STOCK                   NUMBER OUTSTANDING
     -----------------------------------                   ------------------
        Common Stock, $0.03 par value                       7,367,518 shares


================================================================================




<PAGE>   2


                             THE CERPLEX GROUP, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                    PAGE
<S>           <C>                                                                <C>
PART I.        FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Condensed Consolidated Balance Sheets as of
                  June 30, 1999 and September 30, 1998                                 4

                  Condensed Consolidated  Statements of  Operations  for the
                  Three Months and the Nine months Ended June 30, 1999 and
                  June 28, 1998                                                        5


                  Condensed Consolidated Statements of Cash Flows for the
                  Nine months Ended June 30, 1999 and June 28, 1998                    6

                  Notes to Unaudited Condensed Consolidated Financial Statements       7

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                                 11

Item 3.           Quantitative and Qualitative Disclosures About Market Risk          18

PART II.       OTHER INFORMATION                                                      19

Signatures                                                                            22

Index to Exhibits                                                                     23
</TABLE>

                                       2

<PAGE>   3


                             THE CERPLEX GROUP, INC.

                                     PART I

                              FINANCIAL INFORMATION




                                       3


<PAGE>   4
                             THE CERPLEX GROUP, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              JUNE 30,      SEPTEMBER 30,
                                                                                1999             1998
                                                                          -------------     -------------

<S>                                                                         <C>           <C>
                                                  ASSETS

      Current assets:
          Cash and cash equivalents                                            $   6,998     $  14,196
          Accounts receivable, less allowance for doubtful accounts
            of $1,438 ($2,511 in September, 1998)                                 13,915        12,416
          Inventories                                                              8,277         6,626
          Other current assets                                                     1,819         4,628
                                                                               ---------     ---------
      Total current assets                                                        31,009        37,866

      Goodwill                                                                     9,722        37,202
      Property, plant and equipment, net                                          21,982        25,021
      Intangible and other assets                                                    401           452
                                                                               ---------     ---------
                                                                               $  63,114     $ 100,541
                                                                               =========     =========


                                   LIABILITIES AND STOCKHOLDERS' DEFICIT


      Current liabilities:
          Current portion of long-term debt                                    $   4,973     $  53,886
          Accounts payable                                                        10,540         9,903
          Accrued expenses                                                         3,879        14,165
          Accrued interest expense                                                   141         1,424
          Current portion of reserve for discontinued operations                      59           154
          Income taxes payable                                                       670         1,271
          Other current liabilities                                                8,666        12,478
                                                                               ---------     ---------
      Total current liabilities                                                   28,928        93,281

      Long-term debt                                                              34,131        25,782
      Reserve for discontinued operations                                             --         1,822
      Other long-term liabilities                                                  4,714         4,714

      Commitments and contingencies

      Redeemable convertible preferred stock, 216 shares issued (260 issued
        at September 1998)                                                        30,444        34,150

      Stockholders' deficit:
          Series B senior cumulative preferred stock, 58,643 shares issued        58,643            --
          Common stock 75,000 shares authorized, 7,850 shares issued
            (7,601 issued at September, 1998)                                      2,270         2,262
          Additional paid-in capital                                             121,272       116,400
          Treasury stock, at cost, 483 shares                                    (16,675)      (16,675)
          Accumulated deficit                                                   (200,613)     (161,232)
          Cumulative translation adjustment                                           --            37
                                                                               ---------     ---------
      Total stockholders' deficit                                                (35,103)      (59,208)
                                                                               ---------     ---------

                                                                               $  63,114     $ 100,541
                                                                               =========     =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       4

<PAGE>   5



                             THE CERPLEX GROUP, INC

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED         NINE  MONTHS ENDED
                                               ------------------------- -----------------------
                                                  JUNE 30,    JUNE 28,    JUNE 30,      JUNE 28,
                                                   1999        1998        1999          1998
                                                --------     --------     --------     --------
<S>                                           <C>          <C>          <C>           <C>
Net revenues                                    $ 23,914     $ 23,691     $ 77,427     $ 40,885
Cost of sales                                     22,547       21,967       75,039       38,129
                                                --------     --------     --------     --------
        Gross profit                               1,367        1,724        2,388        2,756

Selling, general and administrative expenses       5,811        7,099       16,837       17,770
Amortization of intangible assets                  1,450        2,125        5,758        2,175
Write-off of goodwill                             18,375           --       18,375           --
Reduction in accruals                             (2,006)          --       (2,006)          --
                                                --------     --------     --------     --------
        Operating loss                           (22,263)      (7,500)     (36,576)    (17,189)

Interest expense                                  (1,622)      (1,611)      (5,760)      (3,806)
Other income (expense), net                          208          170        3,500       (1,878)
                                                --------     --------     --------     --------
    Loss before provision for
       income taxes                              (23,677)      (8,941)     (38,836)     (22,873)
Provision (benefit) for income taxes                (646)          54         (631)          54
                                                --------     --------     --------     --------
               Net loss                         $(23,031)    $ (8,995)    $(38,205)    $(22,927)
                                                ========     ========     ========     ========

Dividends on redeemable convertible
  preferred stock                                   (377)        (576)      (1,174)      (2,210)
Net loss applicable to common                   --------     --------     --------     --------
  stockholders                                  $(23,408)    $ (9,571)    $(39,379)    $(25,137)
                                                ========     ========     ========     ========
Basic and diluted loss
     per common share                           $  (3.18)    $  (0.22)    $  (5.38)    $  (1.20)
                                                ========     ========     ========     ========

Weighted average number of common shares
outstanding                                        7,368       44,406        7,322       20,872
                                                ========     ========     ========     ========

</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       5
<PAGE>   6

                           THE CERPLEX GROUP, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                          NINE MONTHS ENDED
                                                     ----------------------------
                                                     JUNE 30, 1999   JUNE 28,1998
                                                    --------------  -------------

<S>                                                     <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                  $(38,205)    $(22,927)
   Adjustments to reconcile net loss to net cash
     used by operating activities
        Depreciation and amortization                        8,323        5,347
        Non-cash interest expense                            1,505
        Loss on disposition of assets                           32          224
        Write-off of goodwill                               18,375           --
        Reduction in accruals                               (2,006)          --
        Changes in assets and liabilities:
           Assets                                             (392)       8,805
           Liabilities                                       1,888          14
                                                          --------     --------
    Net cash used by
                 operating activities:                     (10,480)      (8,537)
                                                          --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Acquisition of property, plant and equipment            (1,218)      (1,107)
    Acquisition of Old Cerplex, net                             --       (7,783)
                                                          --------     --------
    Net cash used by investing activities                   (1,218)      (8,890)
                                                          --------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on debt                                            --      (10,308)
    Sale of redeemable convertible preferred shares             --       21,300
    Proceeds from promissory note                            4,600           --
    Payment on capital leases                                 (100)          --
    Changes in borrowings under line of credit                  --           --
    Issue of senior subordinated debentures                     --       15,000
    Issue of common stock for Cerplex merger                    --        7,783
    Purchase of treasury stock                                  --          (36)
                                                          --------     --------
    Net cash from financing activities                       4,500       33,739
                                                          --------     --------
Net change in cash and cash equivalents                     (7,198)      16,312
Cash and cash equivalents at beginning of period            14,196          323
                                                          --------     --------
Cash and cash equivalents at end of period                $  6,998     $ 16,635
                                                          ========     ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       6


<PAGE>   7
                             THE CERPLEX GROUP, INC.
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A. CURRENT FINANCIAL CONDITION

During the three and nine months ended June 30, 1999 and the year ended
September 30, 1998, the Company experienced recurring operating losses. As a
result of these losses, at June 30, 1999 the company had a deficit of $35.1
million in stockholders' equity. In addition, the Company has relied upon the
financial support of its largest shareholder, an investment fund managed by the
investment firm of Welsh, Carson, Anderson & Stowe ("WCAS") for additional
capital. Currently, WCAS is the Company's sole senior credit lender (see Note E
- WCAS Restructuring). At June 30, 1999 the Company had $25.0 million
outstanding under its senior secured long term debt facility with WCAS (see Note
H - Debt). Senior secured debt outstanding to WCAS is due in April 2001.
Additionally, as of June 30, 1999, the Company had $2.9 million outstanding
under a secured note payable to one of its customers. The $2.9 million
obligation matured on July 29, 1999. The Company received an extension from its
customer of the due date until September 1, 1999. Furthermore, the Company has
$10.5 million outstanding related to its 7 3/4% Convertible Subordinated
Debentures which mature on April 15, 2001.  The Company also had $0.4 million
principal amount outstanding under the 10% Series B Senior Subordinated Notes.
Though the Company intends to increase revenues and decrease expenses to improve
operations, the Company's losses are expected to continue for the foreseeable
future. The Company will require additional funding from its largest stockholder
or another third party. There can be no assurance that such additional funding
and financial support will be available on acceptable terms, or that such funds,
if available, would enable the Company to continue operating or that the Company
will be successful in increasing revenues. In addition, there can be no
assurance that the Company will be successful in arranging financing required
for the repayment of the $2.9 million obligation owed to its customer on
September 1, 1999.


NOTE B. BASIS OF PRESENTATION

The accounting policies followed by the Company are set forth in Note B "Summary
of Significant Accounting Policies" of Notes to Consolidated Financial
Statements included in the 1998 Annual Report on Form 10-K for The Cerplex
Group, Inc.

In the opinion of management, the accompanying consolidated balance sheets and
related interim consolidated statements of operations and cash flows include all
adjustments (consisting only of normal recurring items) necessary for their fair
presentation. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses. Actual results could differ from those estimates.
Interim results are not necessarily indicative of results for a full year.

Certain information in footnote disclosures normally included in financial
statements has been condensed or omitted in accordance with the rules and
regulations of the Securities and Exchange Commission. The information included
in this Form 10-Q should be read in conjunction with Management's Discussion and
Analysis and consolidated financial statements and notes thereto included in
the 1998 Annual Report on Form 10-K for The Cerplex Group, Inc.

NOTE C. EARNINGS PER SHARE OF COMMON STOCK

Basic loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding after adding to loss from
operations cumulative dividends to holders of the Company's redeemable
convertible preferred stock.

Diluted earnings per share is computed by dividing net loss available to common
stockholders by the sum of the weighted average number of common shares
outstanding and dilutive stock options. For all periods presented, common stock
equivalents (stock options) were excluded from the diluted calculations as they
were considered to be anti-dilutive.

The Company's 7% Senior Cumulative Convertible Preferred Stock and 10% Series B
Senior Subordinated Debentures due December 31, 2004, were not common stock
equivalents at the time of issuance and are therefore not included in the
calculation of diluted loss per share.


                                        7


<PAGE>   8




NOTE D.  COMPREHENSIVE INCOME

    In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income", which establishes standards for
reporting and disclosure of comprehensive income and its components. SFAS No.
130 is effective for fiscal years beginning after December 15, 1997 and requires
classification of financial statements for earlier periods to be provided for
comparative purposes. As of June 30, 1999 and June 28, 1998, the Company did
not have any components of comprehensive income, therefore the Net Loss equals
the Comprehensive Loss.

NOTE E.  WCAS Restructuring

On June 25, 1999 the Company consented to an assignment to WCAS by Greyrock
Capital ("Greyrock") of Greyrock's rights and interests under the Greyrock Line
of Credit to WCAS in return for payment in full by WCAS of all outstanding
balances of principal and interest thereunder. WCAS repaid principal and
interest outstanding under the Greyrock Line of Credit totaling $45.4 million.
Concurrent with the assignment, WCAS advanced to the Company an additional $4.6
million for working capital purposes, resulting in $50.0 million of total
indebtedness outstanding under the WCAS Senior Secured Notes as of June 25,
1999. The terms of the WCAS Senior Secured Notes are the same as those under the
Greyrock Line of Credit except i) the interest rate was reduced to LIBOR plus 1
3/4%; ii) principal and interest are due on April 1, 2001; iii) collateral
consisting of the stock of the Company's subsidiaries in the UK and France that
had secured the Greyrock Line of Credit were released; iv) a negative pledge
agreement covering assets owned by the Company's subsidiaries in the UK and
France was terminated; and v) the Company's obligations are no longer subject to
minimum collateral borrowing base requirements previously established in the
Greyrock Line of Credit. On June 30, 1999 the Company issued approximately
58,643 shares of Series B Preferred Stock at a price of $1,000 per share. The
Series B Preferred Stock was issued as repayment of various obligations owed to
WCAS which included $25.0 million of principal outstanding under the WCAS Senior
Secured Notes, $16.5 million of principal of the 10% unsecured promissory notes
( "WCAS Notes"), approximately $15.6 million of principal of the 10% Series A
Senior Subordinated Debentures, and approximately $1.5 million of accrued
interest owed to WCAS under these obligations. The Series B Preferred Stock
consists of 7% cumulative, non-convertible preferred shares that are redeemable
by the Company at its option and redeemable at the option of the holders only
upon a change of control of the Company.

                                       8


<PAGE>   9

NOTE F. INVENTORIES

    Inventories consisted of the following:

<TABLE>
<CAPTION>
                                          JUNE 30,      SEPTEMBER 30,
                                            1999             1998
                                          ---------      ------------
                                              (IN THOUSANDS)

<S>                                       <C>            <C>
Spare and repair parts                    $  7,165          $ 5,569
Work in process                                679              113
Finished goods and purchased product           433              944
                                          --------          -------
        Total inventories                 $  8,277          $ 6,626
                                          --------          -------
</TABLE>


NOTE G.  CAPITALIZATION

On October 5, 1998, a majority of the outstanding capital stock of the Company
entitled to vote, voted at a Special Meeting of Stockholders to effect a
one-for-ten reverse stock split (the "One-for-Ten Reverse Split"), in which each
ten shares of the Company's Common Stock were converted into one share of the
Company's Common Stock. Stockholders who would have received fractional shares
of Common Stock as a result of the One-for-Ten Reverse Split, were paid, in lieu
of receiving fractional shares, cash in an amount equal to $0.104 per share.
Unless otherwise stated, figures as to the number of shares outstanding,
earnings per share, exercise price to convert the 7% Convertible Preferred Stock
and other per share figures included herein, reflect the One-for-Ten Reverse
Split. Immediately following the One-for-Ten Reverse Split, the outstanding
capital stock of the Company consisted of 215,500 shares of 7% Convertible
Preferred Stock, 44,000 shares of Series A Convertible Preferred Stock and
7,118,285 shares of Common Stock. Subsequent to the One-for-Ten Reverse Split,
on November 19, 1998, 249,233 shares of the Company's Common Stock were issued
as a result of the conversion of 44,000 shares of Preferred Stock of the Company
that had been issued to WCAS and other stockholders prior to the Merger. A
majority of such Preferred Stock was held by WCAS. As a majority holder of such
Preferred Stock, WCAS elected to cause all of the shares of such Preferred Stock
to be converted to the Common Stock of the Company. As of June 30, 1999, there
were 7,367,518 shares of the Company's Common Stock outstanding. On June 30,
1999, approximately 58,643 shares of Series B Preferred Stock were issued to
WCAS at a price of $1,000 per share. The shares are 7% cumulative,
non-convertible and are optionally redeemable by the Company and optionally
redeemable by the holders only upon a change of control of the Company. The
Series B Preferred Stock was issued to WCAS in exchange for the repayment of
$16.5 million of principal of the 10% WCAS Notes, approximately $15.6 million of
principal of the 10% Series A Senior Subordinated Debentures, $25.0 million of
principal of Senior Secured Debt purchased by WCAS from Greyrock Capital, and
$1.5 million of accrued interest owed to WCAS under these obligations (see Note
E - WCAS Restructuring).


NOTE H.  DEBT

In conjunction with the purchase on June 25, 1999 by WCAS of the $45.4 million
owed under the Greyrock Line of Credit and, concurrently, an additional $4.6
million loan from WCAS to the Company under the same terms, the Company owed
$50.0 million of Senior Secured Debt to WCAS. One June 30, 1999 $25.0 million of
principal was repaid through the issuance of Series B Preferred Stock (see Note
G - Capitalization). These transactions resulted in $25.0 million of principal
outstanding to WCAS as of June 30, 1999 ("WCAS Senior Secured Notes"). The WCAS
Senior Secured Notes, secured by substantially all of the assets of the Company,
accrue interest at LIBOR plus 1 3/4% payable at maturity. The WCAS Senior
Secured Notes mature on April 1, 2001. As of June 30, 1999 the Company had $10.5
million of indebtedness outstanding under the 7 3/4% Convertible Subordinated
Debenture. In addition, as of June 30, 1999, the Company had $2.9 million
outstanding under a secured note payable to one of its customers. The $2.9
million obligation matured on July 29, 1999. The Company received an extension
of the due date until September 1, 1999. Furthermore, as of June 30, 1999 the
Company had $0.4 million principal amount outstanding under the 10% Series B
Senior Subordinated Notes.


NOTE I.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

For the nine month period ended June 30, 1999, cash paid for interest and income
taxes was $1.9 million and $0 respectively.

Non-cash investing and financing activities for the nine month period ended June
30, 1999 included the conversion of the redeemable convertible preferred stock
into common stock of approximately $5.2 million, accretion of dividends on the
redeemable convertible preferred stock of approximately $1.2 million and
conversion of accrued interest into notes payable of approximately $1.5 million.

On June 30, 1999, the Company issued Series B Preferred Stock as repayment of
approximately $58.6 million of various obligations owed to WCAS (see Note E).

As of June 30, 1999, the Company revised the estimate for certain Old Cerplex
accruals in the amount of $3.7 million, which was considered an adjustment to
the fair value of the net assets acquired and accordingly was treated as a
reduction of goodwill, primarily due to new management estimates.


NOTE J.  Goodwill Impairment

Goodwill, which represents the excess of purchase price over fair value of net
assets acquired, is being amortized on a straight-line basis over the expected
periods to be benefited. Goodwill associated with the acquisition of Old Cerplex
was being amortized over five years. Long-lived assets and certain
identifiable intangibles to be held and used by the Company are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the assets. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Further, any such assets that are to be disposed of are reported at
the lower of carrying amount or fair value less cost to sell, except for assets
covered by the Accounting Principles Board ("APB") Opinion No. 30, "Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions."

In accordance with these policies, on April 30, 1998 following the merger of
Cerplex and Aurora Electronics, Inc. ("Merger"), the Company recorded an excess
of purchase price over net assets acquired totaling approximately $40.7 million
("Goodwill"). Management allocated Goodwill based on estimates of future cash
flows expected from the Company's operations at that time. Since that time, the
Company has closed and consolidated several of its operations, exited certain
lines of business and has revised its estimates for expected future cash flows
from the remaining continuing operations. During the quarter ended June 30,
1999, management, in accordance with the above policy, evaluated the
recoverability of Goodwill based on these revised estimates and the Goodwill
ascribed to closed and terminated operations. Based on this evaluation, the
Company has determined that an impairment charge of approximately $18.4 million
is necessary. The Company recorded this charge during the three months ended
June 30, 1999. The carrying value of Goodwill as of June 30, 1999 after the
impairment was approximately $9.7 million. This intangible asset will be
amortized over a remaining useful life of 15 years. The blended average life of
all operations originally acquired was five years. Subsequent to the write-off
of terminated operations, the remaining operations have a 15 year useful life.

NOTE K.  REDUCTION IN ACCRUALS

During the quarter ended June 30, 1999, Management reviewed the appropriateness
of certain accrued liability accounts. Management revised the estimate for
certain Old Cerplex accruals made at the time of the merger. This reduced
Goodwill prior to the impairment charge by approximately $3.7 million.
Additionally, estimates related to certain Aurora accruals were reduced by
approximately $1.2 million. Accruals related to inventory and accounts payable
were analyzed and reduced by approximately $0.8 million. The estimates were
reduced based on the receipt of new information, negotiations and settlements,
which primarily became available or occurred in the quarter ended June 30, 1999.


NOTE L.  Recent Developments

In May, 1996 the Company purchased the repair and assembly operations of Rank
Xerox in Neuville-en-Ferrain, France through Cerplex SAS. Under the sale and
purchase agreement, Rank Xerox guaranteed the Company a decreasing volume of
repair and assembly activity over a four year period ending May, 2000. Under
this arrangement, the Company sought customer activity other than that from
Rank Xerox to offset the declining base of business. As of September 30, 1998,
the Company had been successful in replacing the decreases in volume related to
Rank Xerox activity. However, as volume decreases accelerated during the first
half of fiscal 1999, it became apparent that the Company's development of new
business was not sufficient to replace the loss of business from Rank Xerox in
the short term. In response to the lower volume of business activity and the
corresponding need to seek funding for the implementation of a social plan that
is required in France for a significant reduction in force, management of the
Company's subsidiary in France was called to a meeting with the local
Commercial Court on July 20, 1999 to review a potential declaration by the
Commercial Court of a receivership procedure. After such review, the Commercial
Court started the receivership procedure and appointed a legal administrator.
During an initial observation period of six months, it is the responsibility of
the legal administrator to assess the options available to permit the recovery
of the Cerplex SAS activity. During this period he is empowered to monitor the
payments of amounts due to creditors. He also selects the plan for the
restoration of profitable trading for presentation to the Commercial Court for
approval. This plan could include proposals for the sale of assets, if
necessary, to fund Cerplex SAS operations and the implementation of a social
plan in connection with a  reduction in force which, if accepted by the
Commercial Court, would be completed under the responsibility of the legal
administrator.
                                       9
<PAGE>   10

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

OVERVIEW

The Company provides repair and logistics services, and spare parts sourcing and
service management for manufacturers of computer, communications and electronic
office equipment. In the computer marketplace, the Company primarily services
display terminals, printed circuit boards, laptops, networking equipment and
workstations. In the telecommunications marketplace, the Company primarily
services switching systems, payphones, video conferencing products,
multiplexers, mobile communications, transmission equipment, hubs and modems. In
the office automation marketplace, the Company services printers, scanners, fax
machines and high value products such as copiers, automatic teller machines
(ATMs) and other paper-handling equipment. The Company operates through its two
principal subsidiaries, Cerplex, Inc. and Aurora Electronics Group, Inc., and
their subsidiaries. Based in Irvine, California, the Company has locations
across the United States, in France and in the United Kingdom.

    The Company entered the computer and electronics industry in 1992, and has
expanded its operations through the acquisition of companies that supply,
refurbish and recycle electronic parts and equipment. The Company's most recent
acquisition was completed on April 30, 1998, when the Company, then known as
Aurora Electronics, Inc. acquired The Cerplex Group, Inc. ("Old Cerplex"). Prior
to the Merger with Old Cerplex which is discussed in more detail below, the
Company's business consisted primarily of two divisions, the Asset Recovery
Services Division (the "ARS Division") and the Parts Services Supply Division
(the "PSS Division"). The Merger was accounted for under the purchase method of
accounting and, as such, the operations of Old Cerplex are not included in the
Company's financial statements prior to April 30, 1998. The majority of the
Company's revenues subsequent to April 30, 1998 are attributable to the repair
operations of Old Cerplex acquired in the Merger. Due to this and the fact that
the Company's ARS and PSS Divisions experienced declining revenues from fiscal
1997 to fiscal 1998, the Company's historical results, especially as they relate
to the ARS and PSS Divisions, may not be indicative of future results.

    In April 1998, the Company completed the Merger with Old Cerplex, in which a
wholly-owned subsidiary of the Company merged into Old Cerplex and each share of
Old Cerplex's Common Stock was converted into 1.070167 shares of the Company's
Common Stock (or .1070167 shares after giving effect to the Company's recent
One-for-Ten Reverse Split). As a result of the Merger, Old Cerplex became a
wholly-owned subsidiary of the Company. The Company changed its name to The
Cerplex Group, Inc., and Old Cerplex changed its name to Cerplex, Inc. The
Company now conducts its operations through two wholly-owned subsidiaries,
Cerplex, Inc. and Aurora Electronics Group, Inc., and their subsidiaries.

    On June 25, 1999, the Company completed a restructuring of $58.6 million of
its debt. $45.4 million of bank debt was assigned to WCAS by Greyrock of
Greyrock's rights and interests under the Greyrock Line of Credit in return for
payment in full by WCAS of all outstanding balances of principal and interest
thereunder. Concurrent with the assignment, WCAS advanced to the Company an
additional $4.6 million for working capital purposes. In a subsequent
transaction, WCAS converted to equity, $25.0 million of the WCAS Senior Secured
Notes in an exchange of debt for shares of 7% Series B Preferred Stock. In
addition, WCAS exchanged $16.5 million of principal of 10% unsecured promissory
notes, approximately $15.6 million of principal of the 10% Series A Senior
Subordinated Debentures, and approximately $1.5 million of accrued interest owed
to WCAS under these obligations for shares of 7% Series B Preferred Stock. In
aggregate, approximately 58,643 shares of Series B Preferred Stock were issued
at a price of $1,000 per share. This restructuring had the effect of increasing
equity by $58.6 million as of June 30, 1999.

    The primary factors affecting the Company's repair business include, but are
not limited to, the pricing of the Company's services and the utilization of the
Company's resources that constitute fixed costs. Pricing in the Company's
industry is very competitive and price discounting could adversely affect the
Company's operating results. In addition, the Company has made a significant
investment in facilities, equipment and personnel. While the Company's
facilities have the capability of generating significantly more repair services
volume than current levels, the Company has, due to a variety of factors,
experienced decreasing revenues which have resulted in significant operating
losses. In particular, BT and Rank Xerox constituted Old Cerplex's and the
Company's largest customers in the last fiscal year. Revenues from these
customers have declined from fiscal 1997 through the third quarter of fiscal
1999 on a pro forma basis. It is anticipated that revenues from Rank Xerox will
continue to decline in the future, and there can be no assurance that revenues
from BT or other customers will not decline in the future. The failure of the
Company to develop additional business from new and existing customers could
have a material adverse effect on the Company's business.

    On June 25, 1999 the Company consented to an assignment to WCAS by Greyrock
of Greyrock's rights and interests under the Greyrock Line of Credit to WCAS in
return for payment in full by WCAS of all outstanding balances of principal and
interest thereunder. WCAS repaid principal and interest outstanding under the
Greyrock Line of Credit totaling $45.4 million. Concurrent with the assignment,
WCAS advanced to the Company an additional $4.6 million for working capital
purposes, resulting in $50.0 million of total indebtedness outstanding under the
WCAS Senior Secured Notes as of June 25, 1999. The terms of the WCAS Senior
Secured Notes are the same as those under the Greyrock Line of Credit except i)
the interest rate was reduced to LIBOR plus 1 3/4%; ii) principal and interest
are due on April 1, 2001; iii) collateral consisting of the stock of the
Company's subsidiaries in the UK and France that had secured the Greyrock Line
of Credit were released; iv) a negative pledge agreement covering assets owned
by the Company's subsidiaries in the UK and France was terminated; and v) the
Company's obligations are no longer subject to minimum collateral borrowing base
requirements previously established in the Greyrock Line of Credit. On June 30,
1999 the Company issued approximately 58,643 shares of Series B Preferred Stock
at a price of $1,000 per share. The Series B Preferred Stock was issued as
repayment of various obligations owed to WCAS which included $25.0 million of
principal outstanding under the WCAS Senior Secured Notes, $16.5 million of
principal of the 10% unsecured promissory notes ( "WCAS Notes"), approximately
$15.6 million of principal of the 10% Series A Senior Subordinated Debentures,
and approximately $1.5 million of accrued interest owed to WCAS under these
obligations. The Series B Preferred Stock consist of 7% cumulative,
non-convertible preferred shares that are redeemable by the Company at its
option and redeemable at the option of the holders only upon a change of control
of the Company.

                                       11
<PAGE>   11

COMPARATIVE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND
JUNE 28, 1998

    Net revenues for the third quarter of fiscal 1999 were $23.9 million, as
compared to $23.7 million in net revenues for the corresponding quarter in the
prior fiscal year.

    Gross profit for the third quarter of fiscal 1999 was $1.4 million (5.7% of
net revenues), as compared to a gross profit of $1.7 million (7.3% of net
revenues) for the corresponding quarter in the prior fiscal year. The decrease
in gross profit was primarily due to increased material costs as a percent of
revenues in our parts division and increases in certain fixed costs as a
percent of revenues in our domestic repair operations.

    Selling, general and administrative expenses for the third quarter of fiscal
1999 were $5.8 million (24.3% of net revenues), as compared to $7.1 million
(30.0% of net revenues) for the corresponding quarter in the prior fiscal year.
The decrease as a percentage of revenues was due to cost cutting measures.
Amortization expense for the third quarter of fiscal 1999 was $1.5 million
compared to $2.1 million for the corresponding quarter in the prior fiscal year.
The decrease was due to the reduced amortization of goodwill resulting from the
impairment analysis.

    Net interest expense for the third quarter of fiscal 1999 was $1.6 million,
or 6.8% of revenues, essentially equal to the $1.6 million, or 6.8% of revenues,
for the corresponding quarter in the prior fiscal year.

    Net loss applicable to common stockholders for the third quarter of fiscal
1999 was $23.4 million as compared to net loss of $9.6 million for the
corresponding quarter in the prior fiscal year. The primary reason for the
increased loss was the write-off of goodwill.


COMPARATIVE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 1999 AND
JUNE 28, 1998

    Net revenues for the first three quarters of fiscal 1999 were $77.4 million,
as compared to $40.9 million in net revenues for the corresponding period in the
prior fiscal year. The Company's increase in revenues was due principally to the
acquisition of Old Cerplex offset by the subsequent closing of this segment of
the Asset Recovery Division as well as the closure of PowerSource operation and
an overall decline in the prices and volumes of computer repair parts.

    Gross profit for the first three quarters of fiscal 1999 was $2.4 million
(3.1% of net revenues), as compared to a gross profit of $2.8 million (6.7% of
net revenues) for the corresponding period in the prior fiscal year. Gross
profit was affected primarily by the acquisition of Old Cerplex. The decrease in
margin percentages is primarily due to the lower historical margins of the Old
Cerplex operations and the impact of declining revenues in the Southern
California operations which historically have had a higher margin.

    Selling, general and administrative expenses for the first three quarters of
fiscal 1999 were $16.8 million (21.7% of net revenues), as compared to $17.8
million (43.5% of net revenues) for the corresponding period in the prior fiscal
year. The decrease as a percentage of revenues was due to the increase in
revenues noted above. Amortization expense for the first three quarters of
fiscal 1999 was $5.8 million compared to $2.2 for the corresponding period in
the prior fiscal year. The increase was due to the amortization of goodwill in
connection with the merger of Aurora and Old Cerplex, offset by reduced
amortization resulting from the impairment analysis.

    Net interest expense for the first three quarters of fiscal 1999 was $5.8
million, or 7.4% of revenues, as compared to $3.8 million, or 9.3% of revenues,
for the corresponding period in the prior fiscal year. The increase in interest
expense is due to higher loan balances on the Company's revolving credit
facility and additional financing from the Company's major stockholder.

    Net loss applicable to common stockholders for the first three quarters was
$39.4 million as compared to net loss of $25.1 million for the corresponding
period in the prior fiscal year. The primary reason for the increased loss was
the write-off of goodwill.


                                       12
<PAGE>   12

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary requirements for capital are directly related to its
levels of accounts receivable, inventories, additions to its property plant and
equipment and required debt principal and interest payments. After completion of
the restructuring of the Company's Greyrock Line of Credit and debt owed to
WCAS, the Company no longer has a working capital deficit. However, certain
obligations owed to its customers and working capital growth represent ongoing
capital requirements.

The Company's most immediate liquidity concern is the ability to repay a
deferred consideration obligation to British Telecom ("BT") under a sale and
purchase agreement. This obligation, totaling approximately $2.9 million as of
June 30, 1999, was originally due on July 29, 1999. The Company has received
from BT an extension of the due date of such deferred consideration until
September 1, 1999. The Company is currently in discussions with BT regarding a
further extension of the due date until November 1, 1999 and is seeking
replacement financing from commercial banks in the UK. There is no assurance,
however, that the further extension from BT will be obtained, or if obtained,
that the extension will give the Company sufficient time to obtain replacement
financing to repay BT. If satisfactory extension and/or additional funds are not
obtained, the Company will continue to experience severe liquidity problems. If
BT is not repaid, BT has foreclosure rights under the sale and purchase
agreement that would allow BT to exercise its rights in connection with the
Company's land and building located in the UK that has been pledged to it as
collateral to support this deferred consideration obligation.

Additionally, the Company expects that its Cerplex SAS operations will
experience cash flow shortfalls in the future as it conducts operations while
implementing a reduction of workforce. The appointed administrator is given
responsibility for generating funds necessary to meet cash flow requirements.
There is no assurance; however, that bank financing or asset sales can be
arranged in amounts sufficient or within the time required to meet such needs.

In addition to the fact that the Company has limited access to additional
working capital, the Company has limited ability to obtain working capital from
the operations of its Cerplex SAS subsidiary. The ability to obtain working
capital from Cerplex SAS is limited due to the internal capital needs of Cerplex
SAS and due to restrictions placed on Cerplex SAS in connection with the
Company's acquisition of Cerplex SAS from Rank Xerox in 1996. Under the terms
of the acquisition, future payments are owed to Rank Xerox and the Company
therefore agreed to certain financial covenants over a four-year period that
limit the amount of dividends and other payments Cerplex SAS can make to the
Company, and impose certain other financial restrictions on the Company and
Cerplex SAS. Accordingly, of the Company's consolidated cash of $7.0 million at
June 30, 1999, the cash of Cerplex SAS of $1.9 million is generally not
available to the Company for financing operations outside of Cerplex SAS.

Management believes that the Company will continue to experience operating
losses and negative cash flow in fiscal 1999. Because the Company does not have
the ability to borrow additional amounts under bank lines of credit, management
anticipates that the only potential sources of additional working capital
available to the Company will be from WCAS or commercial bank financing, if
available. The Company has commenced discussions with a bank regarding future
working capital financing needs. There is no assurance, however, that the
Company will attain results that WCAS or a bank will regard as sufficient to
support the infusion of additional capital from WCAS or loans from banks.

The Company is highly leveraged and has significant debt repayment obligations
and preferred stock redemption obligations. As of June 30, 1999 the Company had
approximately $39.7 million principal amount of indebtedness outstanding, which
consisted of: i) $25.0 million indebtedness under the WCAS Senior Secured Notes;
ii) $10.5 million indebtedness under the Company's 7 3/4% Convertible
Subordinated Debentures; iii) $2.9 million indebtedness under a promissory note
to BT and iv) approximately $1.1 million of other indebtedness consisting
primarily of the 10% Series B Senior Subordinated Notes and equipment leases. In
addition, the Company also had as of June 30, 1999, $21.55 million outstanding
(excluding accrued dividends) of its redeemable 7% Convertible Preferred Stock.






                                       13
<PAGE>   13



    10% Series B Senior Subordinated Notes.

    As of June 30, 1999, there was approximately $0.4 million principal amount
outstanding of the Company's 10% Senior Subordinated Notes. Series B notes were
sold to certain public stockholders. The 10% Senior Subordinated Notes are
subordinate in right of payment to all bank debt and other senior indebtedness
of Cerplex but rank senior to all outstanding subordinated indebtedness. The 10%
Senior Subordinated Notes are general, unsecured obligations of the Company and
bear interest at 10% per annum, payable semi-annually in arrears in cash on June
30 and December 31 of each year, beginning on June 30, 1998. The 10% Senior
Subordinated Notes mature in three equal annual installments commencing on
December 31, 2002. The 10% Senior Subordinated Notes may be prepaid at any time
at the option of the Company in whole or in part, upon not less than 20 or more
than 60 days' notice at the unpaid principal amount thereof plus accrued and
unpaid interest.

    7 3/4% Convertible Subordinated Debentures.

    As of June 30, 1999, there was approximately $10.5 million principal amount
outstanding of the Company's 7 3/4% Convertible Subordinated Debentures (the
"Debentures"). The Debentures mature April 15, 2001 and are convertible into
Common Stock of the Company at a conversion price, subject to adjustment in
certain instances, of approximately $116.60 per share, and are redeemable at the
option of the Company at face value plus accrued interest thereon. The Company
is required to make a partial sinking fund payment of $1,826,000 in April 2000
on the Debentures. The Debentures bear interest at 7 3/4% payable on April 14
and October 14 of each year through maturity.


    Secured Note Payable to BT.


    In July, 1994, Old Cerplex purchased the operating assets of BT Repair
Services for cash and a promissory note in the original principal amount of 2.5
million pounds sterling (the "BT Note"). The BT Note is non-interest bearing and
is secured by a lien on land and buildings purchased from BT at that time. As of
June 30, 1999, approximately $2.9 million principal amount was outstanding under
the BT Note. The BT Note matured on July 29, 1999.

The Company has received from BT an extension of the due date of such deferred
consideration until September 1, 1999. The Company is currently in discussions
with BT regarding a further extension of the due date until November 1, 1999 and
is seeking replacement financing from commercial banks in the UK. There can be
no assurance that both parties will agree on the terms of the BT Note extension.


                                       14

<PAGE>   14
    Other Debt.

    As of June 30, 1999, there was $0.7 million principal amount of other debt
outstanding, consisting primarily of secured equipment financing and capital
lease obligations with interest rates ranging from 8.9% to 12.9%, due in monthly
installments through 1999.

    7% Senior Cumulative Convertible Preferred Stock.


    As of June 30, 1999, there was $21.55 million amount outstanding (excluding
accrued dividends) of the Company's 7% Convertible Preferred Stock (215,500
shares at $100 per share). Holders of the 7% Convertible Preferred Stock are
entitled to receive dividends of $7.00 per share per annum (or 7% of the face
amount), payable when and as declared by the Company's Board of Directors.
Unpaid dividends are cumulative and accrue. Accrued but unpaid dividends do not
bear interest. The 7% Convertible Preferred Stock must be redeemed by the
Company in equal installments on each of December 31, 2006 and 2007. In
addition, the 7% Convertible Preferred Stock is redeemable at the option of the
holders thereof upon a change of control of the Company, which includes the sale
of 50% or more of the voting power of all outstanding shares of the Company to a
party other than WCAS. In the event of a liquidation, dissolution or winding up
of the affairs of the Company, the holders of the 7% Convertible Preferred Stock
are entitled to receive a liquidation preference in the amount of $100 per share
of the 7% Convertible Preferred Stock, plus accrued and unpaid dividends
thereon, prior and in preference to any distribution to holders of any class of
capital stock of the Company junior to such 7% Convertible Preferred Stock. The
7% Convertible Preferred Stock is convertible in whole or in part at the option
of the holders thereof. Each share of 7% Convertible Preferred Stock is
convertible into 40 shares of the Company's Common Stock upon payment of the
conversion price of $2.50 (subject to anti-dilution adjustment under certain
circumstances).

WCAS Restructuring

On June 25, 1999 the Company consented to an assignment to WCAS by Greyrock of
Greyrock's rights and interests under the Greyrock Line of Credit in return for
payment in full by WCAS of all outstanding balances of principal and interest
thereunder. WCAS repaid principal and interest outstanding under the Greyrock
Line of Credit totaling $45.4 million. Concurrent with the assignment, WCAS
advanced to the Company an additional $4.6 million for working capital purposes,
resulting in $50.0 million of total indebtedness outstanding under the WCAS
Senior Secured Notes as of June 25, 1999. The terms of the WCAS Senior Secured
Notes are the same as those under the Greyrock Line of Credit except i) the
interest rate was reduced to LIBOR plus 1 3/4%; ii) principal and interest are
due on April 1, 2001; iii) collateral consisting of the stock of the Company's
subsidiaries in the UK and France that had secured the Greyrock Line of Credit
were released; iv) a negative pledge agreement covering assets owned by the
Company's subsidiaries in the UK and France was terminated; and v) the Company's
obligations are no longer subject to minimum collateral borrowing base
requirements previously established in the Greyrock Line of Credit. On June 30,
1999 the Company issued approximately 58,643 shares of Series B Preferred Stock
at a price of $1,000 per share. The Series B Preferred Stock was issued as
repayment of various obligations owed to WCAS which included $25.0 million of
principal outstanding under the WCAS Senior Secured Notes, $16.5 million of
principal of the 10% unsecured promissory notes ("WCAS Notes"), approximately
$15.6 million of principal of the 10% Series A Senior Subordinated Debentures,
and approximately $1.5 million of accrued interest owed to WCAS under these
obligations. The Series B Preferred Stock consist of 7% cumulative,
non-convertible preferred shares that are redeemable by the Company at its
option and redeemable at the option of holders only upon a change of control of
the Company.

    YEAR 2000 COMPLIANCE


    The Company faces Year 2000 risks as the result of computer programs,
microprocessors and embedded date reliant systems using two digits rather than
four to define the applicable year. If such programs or microprocessors are not
corrected, date data concerning the Year 2000 could cause many systems to fail,
lock up or generate erroneous results. A computer system is considered to be
"Year 2000 compliant" if the system's performance and functionality are
unaffected by the processing of dates prior to, during and after the Year 2000,
but only if all products (for example hardware, software and firmware) used with
the system properly exchange accurate date data with it.

    The Company has implemented a program intended to enable the Company to
become Year 2000 compliant. The Company used management information systems
(MIS) personnel knowledgeable regarding Year 2000 problems to determine the
extent of work necessary for the Company to become Year 2000 compliant and
attempt to remedy such problems. The Company purchased and is in the process of
installing certain software and hardware intended to upgrade its networked
personal computer system to be Year 2000 compliant. More significantly, the
Company obtained the source code for the Company's main operating systems
software that the Company modified to be Year 2000 compliant. In addition, the
Company has begun discussing Year 2000 issues with certain of its significant
suppliers and customers to evaluate their Year 2000 readiness, and  to determine
whether any Year 2000 issues will impede the ability of such suppliers to
continue to provide goods and services to the Company, and the ability of such
customers to continue to provide business to the Company. The Company believes
that its internal systems, equipment and processes are substantially Year 2000
compliant as of August 13, 1999, and intends to complete the analysis and
remediation of potential Year 2000 problems with its significant suppliers and
customers by August 31, 1999. The Company estimates that the total dollar amount
that the Company will spend to remediate its Year 2000 issues will not exceed
$100. Despite the Company's efforts to become Year 2000 compliant, there is no
assurance that the Year 2000 issue will not pose significant problems. There may
be delays in the Company's remediation efforts, a failure to fully identify all
Year 2000 problems in the systems, equipment or processes of the Company or its
vendors or customers, or unanticipated remediation expenses, all of which could
have material adverse consequences on the Company's financial position and
results of operations.

    The Company believes that the most likely worst case scenario with respect
to Year 2000 problems would be that the Company or the third parties with whom
the Company does business would fail to successfully complete their Year 2000
remediation efforts, in which case the Company would encounter disruptions to
its business that could have a material adverse effect on its financial position
and results of operations. In addition to specific problems that the Company may
encounter with its own systems and those of the third parties with whom the
Company does business, the Company may be materially impacted by widespread
economic or financial market disruptions caused by Year 2000 problems. The
Company has established Year 2000 contingency plans in the event



                                       15
<PAGE>   15


that there is a failure of the Company's Year 2000 remediation efforts or the
Year 2000 remediation efforts of third parties with whom the Company does
business. The Company intends to consider contingency plans in the event that
its Year 2000 remediation efforts and those of such third parties appear to be
ineffective or unduly delayed.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 is effective for transactions
entered into after January 1, 2000. This statement requires that all derivative
instruments be recorded on the balance sheet at fair value. Changes in the fair
value of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and the type of hedge transaction. The ineffective portion
of all hedges will be recognized in earnings. The Company is in the process of
determining the impact that the adoption of SFAS No. 133 will have on its
results of operations and financial position. Application of the statement
requirements are not anticipated to have a material impact on the Company's
consolidated financial position, results of operations or loss per share as
currently reported.

In March 1998, the FASB Emerging Issues Task Force ("EITF") announced a
consensus on Issue No. 98-1, "Valuation of Debt Assumed in a Purchase Business
Combination." This EITF reached a consensus that the amount assigned to debt
assumed in a purchase business combination should be its fair value. Quoted
market prices, if available, are the best evidence of the fair value of the
debt. If quoted market prices are not available, management's best estimate of
fair value may be based on the quoted market price of debt with similar
characteristics or on valuation techniques. Therefore, if a present value
technique is used, the estimated future cash flows should not ignore relevant
provisions of the debt agreement (for example, the right of the issuer to
prepay). Application of the statement requirements are not anticipated to have a
material impact on the Company's consolidated financial position, results of
operations or loss per share as currently reported.

In May 1998, the FASB Emerging Issues Task Force ("EITF") announced issue No.
98-5, "Accounting for Convertible Securities with Beneficial Conversion Features
or Contingently adjustable Conversion Ratios." The EITF reached a tentative
conclusion that embedded beneficial conversion features present in convertible
securities should be separately valued at issuance. However, no consensus was
reached for this issue. Further discussion is expected at a future meeting.
Application of a consensus, once reached, is not anticipated to have a
material impact on the Company's consolidated financial position, results of
operations or loss per share as currently reported.

OUTLOOK AND UNCERTAINTIES

    The following is a "safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: the matters discussed in this Quarterly Report on
Form 10-Q contain statements that constitute forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
The words "expect," "estimate," "anticipate," "predict," "believe," and similar
expressions and variations thereof are intended to identify forward-looking
statements. Such statements appear in a number of places in this Quarterly
Report on Form 10-Q and include statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with respect
to, among other things: (i) trends affecting the Company's financial condition
or results of operations; (ii) the Company's financing plans; and (iii) the
Company's business growth strategies. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. These risks and uncertainties include, but are not limited to, the
following:

Losses and Accumulated Deficit. For the quarter ended June 30, 1999, the Company
reported a net loss of $23.4 million and an operating loss of $22.3 million. As
of June 30, 1999, the Company has a stockholders' deficit of $35.1 million. The
Company is expecting to experience losses for the foreseeable future, and will
require additional funding and financial support. Continued losses and/or the
failure to obtain such additional funding and financial support could materially
and adversely affect the business and financial condition of the Company and the
value of, and the market for, the Company's equity and debt securities.


                                       16
<PAGE>   16

    Integration with Old Cerplex; New Management. The Company's success will
depend, to a large extent, upon whether the Company effectively integrates its
business with the business of Old Cerplex following the Merger with Old Cerplex
in April 1998. The Company is subject to the risks normally involved in the
integration of each company's operating, administrative, finance, sales and
marketing organizations, as well as each company's communication technologies
and the coordination of sales efforts and streamlining of facilities and back
office operations. In addition, following the Merger, certain key executives
left the management team and others joined. As a result, the Company became
dependent upon a new management group, some members of which had not been
previously involved in managing the Company. While the Company's key executives
have business experience, they are still in the process of familiarizing
themselves with the specific operations of the Company. There can be no
assurance that the Company will be able to successfully integrate with Old
Cerplex in a manner that will result in the synergies intended as a result of
the Merger. These difficulties could have a material adverse impact on the
Company's financial condition and results of operations.

    Control by WCAS. WCAS owns approximately 85% of the Company's voting capital
stock, which consists of WCAS's ownership of shares of the Company's outstanding
Common Stock, and shares of the Company's 7% Convertible Preferred Stock (which
give the holders thereof the right to vote on all matters on which the holders
of Common Stock are entitled to vote, as if the 7% Convertible Preferred Stock
had been converted to Common Stock). As a result, WCAS is able to control all
matters requiring approval by the Company's stockholders, including the election
of directors. The Company's Board of Directors has the authority to issue
additional shares of preferred stock in one or more series and fix the rights,
preferences, privileges and restrictions granted to or imposed upon any such
shares of preferred stock. The issuance of such preferred stock may adversely
affect voting and dividend rights, rights upon liquidation and other rights of
holders of the Company's Common Stock and may result in immediate and
substantial dilution to the holders of the Common Stock. The issuance of such
preferred stock and the control by WCAS of the Company may also have the effect
of delaying, deferring or preventing a change in control of the Company.

    Dependence on Key Customers. For the quarter ended June 30, 1999, Rank Xerox
and BT accounted for approximately 19.1% and 12.8% of the Company's revenues,
respectively. These revenues were almost entirely attributable to the business
of Old Cerplex. There can be no assurance that such customers will not terminate
any or all of their arrangements with the Company, significantly change, reduce
or delay the amount of services ordered from the Company, or significantly
change the terms upon which the Company and these customers do business. Any
such termination, change, reduction, or delay could have a material adverse
effect on the Company's business. Xerox remains the largest customer of
Cerplex, SAS. Sales from Xerox are expected to decline over the next 12 months
as the contract expires in May 2000. In addition, unit volumes from BT have
been declining and are expected to continue to decline due to, among    other
things, product evolution. The future success of the Company's European
operations is dependent upon replacing these declining volumes with new revenue
from either these or new customers. There can be no assurance that the Company
will be able to replace these declining volumes with sales to either these or
new customers.

    Competition. The Company competes with the in-house repair and service
centers of OEMs and TPMs. There is no indication that these companies will
choose to outsource their repair and service needs. In certain instances, these
companies compete directly with the Company to provide services to third party
OEMs and TPMs. Moreover, the industry in which the Company operates is
fragmented, and the Company faces competition from a variety of small
independent suppliers. Competition for business from OEM, TPM and MVSO customers
is based on a number of factors, including breadth of services provided and
price. Certain of the Company's competitors have greater revenue or larger
capitalizations than the Company. There can be no assurance that the Company
will be able to compete effectively in its target markets.

    Reliance on International Sales. For the quarter ended June 30, 1999,
approximately 51% of the Company's sales were outside of North America. There
can be no assurance that the Company will continue to be able to successfully
market, sell, and deliver its products and services in these markets. Moreover,
it is anticipated that the Company's contract with Rank Xerox, which accounted
for approximately 19.1% of the Company's revenues for the quarter, will be
phased out by May 2000. In addition to the uncertainty as to the Company's
ability to maintain or expand its international presence, there are certain
risks inherent in doing business on an international level, such as unexpected
changes in regulatory requirements, export restrictions, tariffs and other trade
barriers, difficulties in staffing and managing foreign operations, longer
payment cycles, problems in collecting accounts receivable, political
instability, severance and other costs associated with work force reductions,
fluctuations in currency exchange rates, and potentially adverse tax
consequences, any of which could adversely impact the success of the Company's
international operations. There can be no assurance that one or more of such
factors will not have a material adverse effect on the Company's international
operations and, consequently, on the Company's business, operating results and
financial condition.



                                       17
<PAGE>   17
    Reliance on Short Term Purchase Orders and Contracts. The Company generally
distributes spare parts to, and receives its recyclable material from customers
pursuant to non-exclusive contracts that do not contain guaranteed or minimum
quantities and are subject to cancellation on short notice at the customer's
discretion. Similarly, the Company's repair contracts are typically subject to
termination on short notice at the customer's discretion, and purchase orders
under such contracts typically only cover services over a 90-day period.

    Dependence on the Electronics and Computer Industry. The Company's
businesses are dependent upon the growth, viability and financial stability of
its customers and potential customers in the electronics and the computer
industry. The electronics and computer industry have been characterized by rapid
technological change, compressed product life cycles and pricing and margin
pressures. The factors affecting segments of the electronics and computer
industry in general, and the Company's OEM customers in particular, could have
an adverse effect on the Company's business. There can be no assurance that
existing customers or future customers will not experience financial difficulty,
which could have a material adverse effect on the Company's business.

    Risks Associated with Intangible Assets. As of June 30, 1999, approximately
$9.7 million of the Company's total assets consisted of intangible assets. The
intangible assets consist primarily of goodwill resulting from the Merger with
Old Cerplex. The goodwill must be amortized over a number of years and deducted
from the Company's earnings, even though the goodwill may not generate earnings
to offset such deduction. There can be no assurance that the value of the
Company's intangible assets will ever be realized by the Company, particularly
in any sale or liquidation of the Company. However, management continues to
monitor goodwill in accordance with the provisions of Statement of Financial
Accounting Standard No. 121 "Accounting for the Impairment of Long Lived Assets
and Long Lived Assets to be Disposed of." Any significant decrease in the value
of such intangible assets or increase in the rate of amortization thereof would
adversely affect the Company's financial condition and results of operations.

    Limited Trading Market and Possible Volatility of Stock Price. The volume of
trading of the Company's Common Stock has been very limited and there can be no
assurance of an active trading market for the Common Stock in the future. In
addition, the trading price of the Company's Common Stock has been, and in the
future could be, subject to significant fluctuations in response to variations
in quarterly operating results of the Company, the depth and liquidity of the
market for the Company's Common Stock, investor perception of the Company and
the industry within which it competes, the gain or loss of significant
contracts, changes in management or new products or services offered by the
Company or any competitors, general trends in the industry and other events or
factors. In addition, the stock market has experienced extreme price and volume
fluctuations, which have particularly affected the market price for many
companies in similar industries and which have often been unrelated to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of the Company's Common Stock.

    Shares Available for Future Sale. No prediction can be made as to the
effect, if any, that future sales of shares, or the availability of shares for
future sale by WCAS, will have on the market price of the Company's Common Stock
prevailing from time to time. Sales of substantial amounts of Common Stock
(including shares issued upon the exercise of stock options and the conversion
of preferred stock), or the perception that such sales could occur, may
adversely affect prevailing market prices for the Company's Common Stock.

Item 3. QUANTITATIVE and QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company is subject to market risks with respect to its variable note
debt and its cash flows, receivables and payables denominated in foreign
currencies.

        Of the Company's $39.8 million principal amount of indebtedness at June
30, 1999, $25 million principal amount of such debt (which represents total
principal indebtedness under the WCAS Senior Secured Notes) bears interest at a
rate that fluctuate based on changes in the LIBOR rate. A 1% change in the
underlying LIBOR rate would result in a $250 change in the annual amount of
interest payable on such debt.

        The Company's overseas subsidiaries operate in England and France. Both
the trade receivables and the trade payables for these units are denominated in
the local currency. The net balances as of June 30, 1999 were $1.7 million. The
Company does not hedge these balances. See Note O to the Consolidated Financial
Statements --"Foreign Operations and Major Customers" in the Company's annual
report on form 10K.


                                       18
<PAGE>   18



                           THE CERPLEX GROUP, INC.

                                   PART II

                              OTHER INFORMATION









                                      19
<PAGE>   19







                             THE CERPLEX GROUP, INC.

ITEM 1.       LEGAL PROCEEDINGS

              Inapplicable.

ITEM 2.       CHANGES IN SECURITIES

              Inapplicable.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

              Inapplicable.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              Inapplicable.


ITEM 5.       OTHER INFORMATION

              The Company's subsidiary, Cerplex, Ltd., has a deferred payment
obligation of approximately $2.9 million owed to one of its customers, which
payment obligation became due in July 1999. Cerplex, Ltd. is currently in
default on such payment obligation and is presently seeking to arrange a
financial guarantee of the deferred payment obligation which will be
satisfactory to its customer and thereby cure the event of default.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

              (a) Exhibits

    EXHIBIT
     NUMBER                         DESCRIPTION OF EXHIBITS
     ------                         -----------------------
      3.1.1       The Restated Certificate of Incorporation of the Company, as
                  amended (incorporated by reference from Exhibit 3.1



                                       20
<PAGE>   20

     EXHIBIT
     NUMBER                         DESCRIPTION OF EXHIBITS
     ------                         -----------------------

                  to the Company's Transition Report on Form 10-K for the
                  transition period from December 31, 1991 to September 30,
                  1992).

      3.1.2       The Certificate of Amendment to the Restated Certificate of
                  Incorporation of the Company, filed on April 28, 1998
                  (incorporated by reference from Exhibit 4.1.1 of the Company's
                  Post-Effective Amendment No. 2 to the Company's Registration
                  Statement on Form S-3, filed on May 13, 1998 (Registration No.
                  333-47973)).

      3.1.3       The Certificate of Amendment to the Restated Certificate of
                  Incorporation of the Company, filed on April 30, 1998
                  (incorporated by reference from Exhibit 4.1.2 of the Company's
                  Post-Effective Amendment No. 2 to the Company's Registration
                  Statement on Form S-3, filed on May 13, 1998 (Registration No.
                  333-47973)).

      3.1.4       Certificate of Amendment to Certificate of Incorporation of
                  the Company filed on October 6, 1998 (incorporated by
                  reference from Exhibit 3.1.4 of the Company's Annual Report on
                  Form 10-K for the fiscal year ended September 30, 1998 and
                  filed on January 12, 1999).

      3.2.1       Bylaws of the Company, as amended (incorporated by reference
                  from Exhibit 4.2 of the Company's Registration Statement on
                  Form S-8 (Registration No. 33-79426)).

      3.2.2       Resolutions adopted by the Board of Directors on April 30,
                  1998, amending the Bylaws of the Company (incorporated by
                  reference from Exhibit 4.2.1 of the Company's Post-Effective
                  Amendment No. 2 to the Company's Registration Statement on
                  Form S-3, filed on May 13, 1998 (Registration No. 333-47973)).

      4.1         Certificate of Designations, Preferences and Rights of
                  Convertible Preferred Stock filed on November 19, 1998
                  eliminating the Series B, C and D Convertible Preferred Stock
                  (incorporated by reference from Exhibit 4.18 of the Company's
                  Annual Report on Form 10-K for the fiscal year ended September
                  30, 1998 and filed on January 12, 1999).

      4.2         Certificate of Elimination of Convertible Preferred Stock
                  filed on December 15, 1998 (incorporated by reference from
                  Exhibit 4.19 of the Company's Annual Report on Form 10-K for
                  the fiscal year ended September 30, 1998 and filed on January
                  12, 1999).

     *4.3         Certificate of Designations, Preferences and Rights of Series
                  B Senior Cumulative Preferred Stock filed on June 30, 1999
                  designating a series of 60,000 shares.

     10.1         10% Senior Subordinated Note for $5,000,000, due September 30,
                  1999, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee (incorporated by reference from Exhibit
                  10.3 of the Company's Annual Report on Form 10-K for the
                  fiscal year ended September 30, 1998 and filed on January 12,
                  1999).

     10.2         10% Senior Subordinated Note for $2,500,000, due December 9,
                  1999, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee (incorporated by reference from Exhibit
                  10.4 of the Company's Annual Report on Form 10-K for the
                  fiscal year ended September 30, 1998 and filed on January 12,
                  1999).

     10.3         10% Senior Subordinated Note for $1,000,000, due February 26,
                  2000, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee.

     10.4         10% Senior Subordinated Note for $1,000,000, due February 26,
                  2000, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee.

     10.5         10% Senior Subordinated Note for $2,000,000, due March 25,
                  2000, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee.

     10.6         10% Senior Subordinated Note for $2,000,000, due April 21,
                  2000, between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee.

     10.7         Lease of the Company's primary headquarters facility located
                  at 111 Pacifica Avenue, Suite 300, Irvine, CA 92618.

   * 10.8         Consent and Amendment to the Loan and Security Agreement
                  dated June 25, 1999 between the Company, Aurora Electronics
                  Group, Inc., Cerplex, Inc. and Cerplex Mass., Inc. as payors
                  and Welsh, Carson, Anderson & Stowe VII, L.P.  as successor
                  in interest to Greyrock Business Credit, a division of
                  NationsCredit Commercial Corporation as payee.

    *10.9         Assignment of Loan dated June 25, 1999 between Greyrock
                  Capital, a division of NationsCredit Commercial
                  Corporation as assignor and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as assignee.

   *10.10         Acknowledgement, Consent and Release by the Company, Aurora
                  Electronics Group, Inc., Cerplex, Inc. and Cerplex Mass., Inc.

   *10.11         Release by Welsh, Carson, Anderson & Stowe VII, L.P.

   *10.12         Release of Continuing Guaranty by Greyrock Capital, a
                  division of NationsCredit Commercial Corporation.

   *10.13         Consent by Silicon Valley Bank to the assignment documents
                  (incorporated by reference from Exhibit 10.8 and filed with
                  this Form 10-Q).

   *10.14         Form of the Secured Promissory Note in the amount of
                  $25,000,000 originally issued on April 30, 1998 amended and
                  restated on June 25, 1999 between the Company, Aurora
                  Electronics Group, Inc., Cerplex Mass., Inc. and Cerplex, Inc.
                  as payors and Welsh, Carson, Anderson & Stowe VII, L.P.,
                  affiliates of Welsh, Carson, Anderson & Stowe VII, L.P. and
                  individual investors as payee.

   *10.15         Amended and Restated Secured Promissory Note in the amount of
                  $9,024,896.72 issued on June 25, 1999 1999 between the
                  Company, Aurora Electronics Group, Inc., Cerplex Mass., Inc.
                  and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                  Stowe VII, L.P. as payee.

   *10.16         Demand Promissory Note in the amount of $11,000,000 originally
                  issued on April 30, 1998 amended and restated on June 25, 1999
                  between the Company, Aurora Electronics Group, Inc. and
                  Cerplex, Inc. as payors and Welsh, Carson, Anderson & Stowe
                  VII, L.P. as payee.

   *10.17         Demand Promissory Note in the amount of $4,975,103.28
                  originally issued on April 30, 1998 amended and restated on
                  June 25, 1999 between the Company, Aurora Electronics Group,
                  Inc. and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                  Stowe VII, L.P. as payee.

   *27            Financial Data Schedule - Article 5 of Regulation S-X.

------------

*       Filed herewith.

           (b)    Reports on Form 8-K

                  None



                                       21
<PAGE>   21


                             THE CERPLEX GROUP, INC.

                                   SIGNATURES

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

Date: August 16, 1999

                                        THE CERPLEX GROUP, INC.

                                        /s/  Richard Alston
                                        ----------------------------------------
                                        Richard Alston
                                        President and Chief Operating Officer

                                         /s/  Debbi Anders
                                        ----------------------------------------
                                        Debbi Anders
                                        Vice President of Finance
                                         (Principal Financial Officer)

                                       /s/  Anthony E. Palumbo
                                        ----------------------------------------
                                        Anthony E. Palumbo
                                        Corporate Controller
                                        (Controller)



                                       22


<PAGE>   22


                             THE CERPLEX GROUP, INC.

                                INDEX TO EXHIBITS

     EXHIBIT
      NUMBER                          DESCRIPTION OF EXHIBITS
      ------                          -----------------------

      3.1.1         The Restated Certificate of Incorporation of the Company, as
                    amended (incorporated by reference from Exhibit 3.1 to the
                    Company's Transition Report on Form 10-K for the transition
                    period from December 31, 1991 to September 30, 1992).

      3.1.2         The Certificate of Amendment to the Restated Certificate of
                    Incorporation of the Company, filed on April 28, 1998
                    (incorporated by reference from Exhibit 4.1.1 of the
                    Company's Post-Effective Amendment No. 2 to the Company's
                    Registration Statement on Form S-3, filed on May 13, 1998
                    (Registration No. 333-47973)).

      3.1.3         The Certificate of Amendment to the Restated Certificate of
                    Incorporation of the Company, filed on April 30, 1998
                    (incorporated by reference from Exhibit 4.1.2 of the
                    Company's Post-Effective Amendment No. 2 to the Company's
                    Registration Statement on Form S-3, filed on May 13, 1998
                    (Registration No. 333-47973)).

      3.1.4         Certificate of Amendment to Certificate of Incorporation of
                    the Company filed on October 6, 1998 (incorporated by
                    reference from Exhibit 3.1.4 of the Company's Annual Report
                    on Form 10-K for the fiscal year ended September 30, 1998
                    and filed on January 12, 1999).

      3.2.1         Bylaws of the Company, as amended (incorporated by reference
                    from Exhibit 4.2 of the Company's Registration Statement on
                    Form S-8 (Registration No. 33-79426)).

      3.2.2         Resolutions adopted by the Board of Directors on April 30,
                    1998, amending the Bylaws of the Company (incorporated by
                    reference from Exhibit 4.2.1 of the Company's Post-Effective
                    Amendment No. 2 to the Company's Registration Statement on
                    Form S-3, filed on May 13, 1998 (Registration No.
                    333-47973)).

      4.1           Certificate of Designations, Preferences and Rights of
                    Convertible Preferred Stock filed on November 19, 1998
                    eliminating the Series B, C and D Convertible Preferred
                    Stock (incorporated by reference from Exhibit 4.18 of the
                    Company's Annual Report on Form 10-K for the fiscal year
                    ended September 30, 1998 and filed on January 12, 1999).

      4.2           Certificate of Elimination of Convertible Preferred Stock
                    filed on December 15, 1998 (incorporated by reference from
                    Exhibit 4.19 of the Company's Annual Report on Form 10-K for
                    the fiscal year ended September 30, 1998 and filed on
                    January 12, 1999).

     *4.3           Certificate of Designations, Preferences and Rights of
                    Series B Senior Cumulative Preferred Stock filed on
                    June 30, 1999 designating a series of 60,000 shares.

     10.1           10% Senior Subordinated Note for $5,000,000, due September
                    30, 1999, between the Company, Aurora Electronics Group,
                    Inc. and Cerplex, Inc. as payors and Welsh, Carson, Anderson
                    & Stowe VII, L.P. as payee (incorporated by reference from
                    Exhibit 10.3 of the Company's Annual Report on Form 10-K for
                    the fiscal year ended September 30, 1998 and filed on
                    January 12, 1999).

     10.2           10% Senior Subordinated Note for $2,500,000, due December 9,
                    1999, between the Company, Aurora Electronics Group, Inc.
                    and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                    Stowe VII, L.P. as payee (incorporated by reference from
                    Exhibit 10.4 of the Company's Annual Report on Form 10-K for
                    the fiscal year ended September 30, 1998 and filed on
                    January 12, 1999).

     10.3           10% Senior Subordinated Note for $2,000,000, due January 26,
                    2000, between the Company, Aurora Electronics Group, Inc.
                    and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                    Stowe VII, L.P. as payee.

     10.4           10% Senior Subordinated Note for $1,000,000, due
                    February 26, 2000, between the Company, Aurora Electronics
                    Group, Inc. and Cerplex, Inc. as payors and Welsh, Carson,
                    Anderson & Stowe VII, L.P. as payee.

     10.5           10% Senior Subordinated Note for $2,000,000, due March 25,
                    2000, between the Company, Aurora Electronics Group, Inc.
                    and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                    Stowe VII, L.P. as payee.

     10.6           10% Senior Subordinated Note for $2,000,000, due April 21,
                    2000, between the Company, Aurora Electronics Group, Inc.
                    and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                    Stowe VII, L.P. as payee.

     10.7           Lease of the Company's primary headquarters facility
                    located at 111 Pacifica Avenue, Suite 300, Irvine, CA 92618

   * 10.8           Consent and Amendment to the Loan and Security Agreement
                    dated June 25, 1999 between the Company, Aurora Electronics
                    Group, Inc., Cerplex, Inc. and Cerplex Mass., Inc. as
                    payors and Welsh, Carson, Anderson & Stowe VII, L.P.  as
                    successor in interest to Greyrock Business Credit, a
                    division of NationsCredit Commercial Corporation as payee.

    *10.9           Assignment of Loan dated June 25, 1999 between Greyrock
                    Capital, a division of NationsCredit Commercial
                    Corporation as assignor and Welsh, Carson, Anderson & Stowe
                    VII, L.P. as assignee.

   *10.10           Acknowledgement, Consent and Release by the Company, Aurora
                    Electronics Group, Inc., Cerplex, Inc. and Cerplex Mass.,
                    Inc.

   *10.11           Release by Welsh, Carson, Anderson & Stowe VII, L.P.

   *10.12           Release of Continuing Guaranty by Greyrock Capital, a
                    division of NationsCredit Commercial Corporation.

   *10.13           Consent by Silicon Valley Bank to the assignment documents
                    (incorporated by reference from Exhibit 10.8 and filed with
                    this Form 10-Q).

   *10.14           Form of the Secured Promissory Note in the amount of
                    $25,000,000 originally issued on April 30, 1998 amended and
                    restated on June 25, 1999 between the Company, Aurora
                    Electronics Group, Inc., Cerplex Mass., Inc. and Cerplex,
                    Inc. as payors and Welsh, Carson, Anderson & Stowe VII,
                    L.P., affiliates of Welsh, Carson, Anderson & Stowe VII,
                    L.P. and individual investors as payee.

   *10.15           Amended and Restated Secured Promissory Note in the amount
                    of $9,024,896.72 issued on June 25, 1999 1999 between the
                    Company, Aurora Electronics Group, Inc., Cerplex Mass., Inc.
                    and Cerplex, Inc. as payors and Welsh, Carson, Anderson &
                    Stowe VII, L.P. as payee.

   *10.16           Demand Promissory Note in the amount of $11,000,000
                    originally issued on April 30, 1998 amended and restated on
                    June 25, 1999 between the Company, Aurora Electronics Group,
                    Inc. and Cerplex, Inc. as payors and Welsh, Carson, Anderson
                    & Stowe VII, L.P. as payee.

   *10.17           Demand Promissory Note in the amount of $4,975,103.28
                    originally issued on April 30, 1998 amended and restated on
                    June 25, 1999 between the Company, Aurora Electronics Group,
                    Inc. and Cerplex, Inc. as payors and Welsh, Carson, Anderson
                    & Stowe VII, L.P. as payee.

     27             Financial Data Schedule - Article 5 of Regulation S-X.

------------

*        Filed herewith.



                                       23