SECTION 3-SECURITIES AND TRADING MARKETS

Item 3.02: Unregistered Sales of Equity Securities.

          On July 1, 2008 (the “Effective Date”), SED International Holdings, Inc. (the “Company”) issued 125,000 shares of restricted common stock to a vendor, an accredited investor, for services. On the Effective Date, the Company also issued 22,857 shares of restricted common stock to each of its five non-employee directors in accordance with the Company’s board compensation plan. Each of the non-employee directors entered into a restricted stock agreement with respect to his respective shares of restricted common stock (the “Restricted Stock Agreement”). Generally, the shares issued to the non-employee directors will be subject to forfeiture prior to vesting and vest in equal amounts on the first and second anniversary dates of the Effective Date. The final form of the Restrict Stock Agreement is attached hereto as Exhibits 10.1.

          The issuance of these shares was exempt from registration pursuant to Sections 4(2) of the Securities Act of 1933, as amended (the “Act”). The stock certificates representing these shares were imprinted with a legend restricting transfer unless pursuant to an effective registration statement or an exemption from registration under the Act.

Item 9.01: Financial Statements and Exhibits.

          (d) Exhibits.

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SIGNATURES

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

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