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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                     For the fiscal year ended June 30, 2003

                                       OR

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

    For the transition period from _______________ to ______________________

                         Commission file number 0-27494

                            SILVERSTAR HOLDINGS, LTD.
             (Exact name of Registrant as specified in its charter)

              Bermuda                                     N/A
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

             Clarendon House, Church Street, Hamilton HM CX, Bermuda
--------------------------------------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

        Registrant's telephone number, including area code (441) 295-1422
                                                           --------------

Securities registered pursuant to Section 12(b) of the Act:

      Title of each class              Name of each exchange on which registered

             None                                           None
--------------------------------------------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
--------------------------------------------------------------------------------
                                ("Common Stock")

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes   X    No
     ---

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

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  of the  Registrant.  The  aggregate  market  value  shall be
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such common  equity,  as of a specified  date within 60
days prior to the date of filing.  (See  definition of affiliate in Rule 405, 17
CFR 230.405).

The  aggregate   market  value  of  the   Registrant's   Common  Stock  held  by
non-affiliates of the Registrant as of September 17, 2003, was $4,614,425.

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.

As of September 17, 2003, there were 7,552,347 shares of the Registrant's Common
Stock  outstanding and 926,025 shares of the  Registrant's  Class B Common Stock
outstanding


<PAGE>


                                    PART I.

ITEM 1.  DESCRIPTION OF BUSINESS

We are a holding company that seeks to acquire  businesses  fitting a predefined
investment strategy.

We  are  the  parent  company  of  Fantasy  Sports,  Inc.,  which  operates  the
Fantasycup.com,   fantasycup.org,   fantasycup.net,   fantasystockcar.com,   and
fantasynhra.com  websites and specializes in subscription based NASCAR,  college
football  and  basketball  and  other  fantasy  sports  games.  We  are  also  a
shareholder  in  Magnolia  Broadband  Wireless,   a  startup  company  which  is
developing mobile wireless broadband products.

HISTORY

We were founded in September 1995 to pursue  opportunities in South Africa as an
emerging market. At that time, our business plan was to acquire, own and operate
seasoned,  closely held companies in South Africa with annual sales in the range
of approximately $5 million to $50 million. In 1999, we shifted our focus to the
Internet,  technology and  e-commerce  sectors,  and away from South Africa,  by
acquiring a majority stake in  Leisureplanet.com,  an Internet  travel  services
company.  In connection with the shift in our business plan, we changed our name
to Leisureplanet  Holdings, Ltd. In 2000, we disposed of our operations in South
Africa,  closed  Leisureplanet.com  and acquired 100% of Fantasy Sports, Inc. In
2001, we acquired 100% of Student  Sports,  Inc, which we sold in 2003. This was
the only operating  subsidiary in our marketing services segment. As a result of
these changes and developments,  we have reestablished our investment  criteria.
Our strategy focuses on:

o    Acquiring  controlling  stakes in small,  high  quality,  sports  media and
     marketing  businesses with strong  management  teams that are positioned to
     use technology and Internet related platforms to fuel above average growth.

o    Our investments must show an ability to contribute,  in the short to medium
     term,   to  earnings  per  share  through   operating   profit  or  capital
     appreciation.

o    We aim to add value to our  investments  by operating in  partnership  with
     committed, incentivised, entrepreneurial management who show the vision and
     ability to grow their businesses into industry or niche leaders.

DESCRIPTION OF OUR SUBSIDIARIES AND INVESTMENTS

FANTASY SPORTS, INC.

Fantasy  Sports,  Inc.  owns and operates  one of  America's  oldest and largest
subscription  based NASCAR  fantasy  sports game.  In addition,  the company has
developed, and offers, subscription based college football, basketball, golf and
other  motor sport  fantasy  games.  All the  company's  games offer  weekly and
seasonal cash and merchandise prizes.

Currently,  the Company has over 30,000 participants paying for its Spring, Fall
and One Race NASCAR  challenges,  as well as the fantasy  college  football  and
basketball  challenges and our other games.  Subscription revenues for our games
account for approximately 78% of our total revenues.  Our NASCAR games currently
generate over 90% of our subscription revenues.  Participants pay between $99.95
to $169.95 to play in our seasonal  games,  and a $25 fee to  participate in our
One Race and  Tournament  challenges.  We offer two grand prizes of $25,000 each
for our NASCAR challenges and a $10,000 prize for the college football challenge
winner.  The winners of our One Race and Tournament  challenges receive $10,000.
In addition, weekly prizes and bonus points are widely distributed.


                                      -2-
<PAGE>

Fantasy  sports  participation  is rapidly  becoming a significant  component of
sports related leisure time activity. The NASCAR niche is particularly appealing
as growing public  interest in the sport,  as evidenced by increased  attendance
and TV ratings for all NASCAR events, particularly the Winston Cup Series races,
have made this one of America's most popular sports. This trend was strengthened
in 2001 with the first national  television network broadcast of the Winston Cup
Series. Fantasy Sports has been operating their NASCAR challenges since 1993 and
are the  dominant  company in this market.  Our  spokesperson,  Ned  Jarrett,  a
well-known NASCAR  personality,  lends credibility and wide public acceptance to
our games. Mr. Jarrett appears in our numerous television commercials as well as
on the cover of our  rulebook  and his  reputation  personifies  the quality and
integrity of our games. In addition,  our websites offer up to the minute racing
tips from Mark Garrow,  the  well-known  broadcaster,  which adds to the fun and
excitement of playing the game. Contestants can visit the site and trade drivers
up to the very last minute prior to a race,  thereby offering the highest degree
of interactive online participation.

Since 1997, Fantasy Sports has operated a full season college football challenge
game,  which  accounts  for  approximately  5% of our  subscription  revenues at
present.  During 2001, we developed and deployed a tournament  challenge college
basketball  game that generated  over 2,000 paying  customers in our last fiscal
year. We have developed a retail business that specializes in the sale of NASCAR
related  die-cast cars,  apparel and other  merchandise.  This retail  operation
commenced  business in May 2001 and currently  accounts for the remaining 22% of
our overall revenues.

We currently provide an in-house  corporate game for the Dana  Corporation,  and
are seeking further  corporate  sponsorships for our games in order to diversify
the revenue streams so that we are not solely reliant on  subscription  fees for
our games.

MAGNOLIA BROADBAND WIRELESS

On April 14, 2000, we entered into a Securities Purchase Agreement with Magnolia
Broadband,  Inc.  Magnolia  is a start up company  that is  developing  wireless
broadband  solutions  for  the  mobile   telecommunications   industry.   Mobile
telecommunications  has been and continues to be one of the fastest  growing and
most dynamic segments of the telecommunications  industry. According to a recent
Cahner's Instat Group report,  semiconductor  revenue for wireless handsets will
reach more than $50B by 2004,  driven by an  expected  sales  volume of over 1.2
billion handsets that year.

Magnolia  is  developing  technology  to become  one of the first  companies  to
integrate  smart  antenna  technologies  into RF chip  sets  utilized  in mobile
phones.  The  Company's  innovative  chip  sets  are  aimed at  helping  handset
manufacturers  satisfy both of their key  constituencies - consumers and network
operators.  Magnolia's technology aims to: double power efficiency, i.e. battery
life;  decrease  radiation at least twenty times (reducing  health risks);  and,
significantly reduce dropped calls. We believe the technology will be attractive
to network operators because,  if effective,  it will enable them to serve twice
as many  subscribers  with  the  same  infrastructure  and  offer  better,  more
consistent  reception  to users,  many of whom  choose a  carrier  based on this
critical criterion.

We invested  $2,500,000  in Magnolia and received  shares of preferred  stock in
Magnolia.  We also received board representation rights and registration rights.
In October 2001, we invested a further $450,000 of a total  $1,500,000  offering
of  Magnolia's  Series A  Preferred  Stock.  We  co-invested  along with  Selway
Partners,  LLC, and CIP  Capital,  LP. In April and May 2002  Magnolia  raised a
further  $7.5 million in an offering of Series B Preferred  Stock.  In June 2003
Magnolia  raised a  further  $6  million  dollars  in an  offering  of  Series C
Preferred Stock. We did not participate in either of these rounds.  Currently we
own approximately 5% of Magnolia on a fully diluted basis including the exercise
of all employee  stock  options.  Due to recurring  losses,  our  investment  in
Magnolia at June 30, 2003, which is now accounted for under the cost method, was
$831,066.


                                      -3-
<PAGE>


DISCONTINUED OPERATIONS

Student Sports, Inc.

On June 14, 2003, we entered into an Asset Purchase  Agreement with SS Founders,
Inc.,  pursuant to which we sold substantially all of the assets and liabilities
of Student Sports,  Inc.  Student Sports offers unique access to the high school
athletic  market  across  multimedia  platforms.  As a subsidiary  of Silverstar
Holdings,  the company's primary thrust was to offer marketing services to large
corporations  interested  in accessing  this market.  Additionally,  the company
worked towards building a "bottom-up"  revenue generation  strategy based on the
creation of a number of subscription  based programs where products and services
will be sold directly to the high school athletes, their parents and coaches. We
originally  acquired Student Sports in September 2001. The consideration for the
sale of Student  Sports was 325,686 shares of Silverstar  Holdings  common stock
that were  returned  to the Company as well as the  forgiveness  of a maximum of
913,745 contingent shares of Silverstar Holdings that could have been payable to
former Student Sports shareholders in April 2004.

EMPLOYEES

Silverstar Holdings through its US management subsidiaries employs two full time
salaried employees. Fantasy Sports, Inc. currently employs 12 full time salaried
employees and approximately 13 hourly employees.

Our success  will depend on our ability to attract and retain  highly  qualified
employees.  We provide performance based and equity based compensation  programs
to reward and motivate significant contributors among our employees. Competition
for  qualified  personnel in the industry is intense.  There can be no assurance
that our  current and  planned  staffing  will be adequate to support our future
operations or that management will be able to hire, train, retain, motivate, and
manage  required  personnel.  Although none of our employees is represented by a
labor union,  there can be no assurance that our employees will not join or form
a labor  union.  We have not  experienced  any work  stoppages  and consider our
relations with our employees to be good.

ITEM 2.  PROPERTIES

Our principal  executive offices are located at Clarendon House,  Church Street,
Hamilton,  HM CX,  Bermuda,  which space is made  available  to us pursuant to a
corporate  services  agreement entered into with a corporate services company in
Bermuda.

Fantasy  Sports,  Inc. has its principal  executive  offices at 2009  Industrial
Highway, York,  Pennsylvania,  17402. These offices also contain our call center
and warehouse space and cover approximately 8,000 square feet. The lease expires
on December 31, 2003 and costs us approximately $60,000 per year.

Our United States management subsidiary,  First South Africa Management Corp., a
Delaware  corporation  incorporated in 1995, has its principal executive offices
at 6100 Glades Road, Suite 305, Boca Raton,  Florida 33434. The lease expires in
February 2006 and costs us approximately $33,000 per year.

ITEM 3.  LEGAL PROCEEDINGS

None

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

Not Applicable.


                                      -4-
<PAGE>


PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is listed for quotation on the National  Market on the
Nasdaq  System under the symbol SSTR.  The following  table sets forth,  for the
periods indicated the high and low closing sales prices for our common stock, as
reported by Nasdaq.


                                                     High             Low
                                                     ----             ---
Common Stock Fiscal 2001
------------------------
1st Quarter........................................  $3.44            $0.94
2nd Quarter........................................  $1.17            $0.56
3rd Quarter........................................  $1.25            $0.63
4th Quarter........................................  $1.11            $0.63


Common Stock Fiscal 2002
------------------------
1st Quarter........................................  $1.00            $0.38
2nd Quarter........................................  $0.62            $0.33
3rd Quarter........................................  $0.80            $0.28
4th Quarter........................................  $0.52            $0.17


Common Stock Fiscal 2003
------------------------
1st Quarter........................................  $0.33            $0.10
2nd Quarter........................................  $0.27            $0.07
3rd Quarter........................................  $0.38            $0.06
4th Quarter........................................  $0.81            $0.10


The closing price of our common stock on September 20, 2003 was $0.63.

As of September 20, 2003, there were  approximately  1,700 holders of our common
stock,  inclusive  of  holders  whose  shares  were  held  by  brokerage  firms,
depositaries and other institutional firms in "street name" for their customers.

We have never  declared or paid any cash  dividends  on our common  stock or our
Class B common  stock.  We do not intend to declare or pay any  dividends on our
common stock or our Class B common stock in the foreseeable future. We currently
intend to retain  future  earnings,  if any,  to finance  the  expansion  of our
business.


                                      -5-
<PAGE>


ITEM 6.  SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

Selected Consolidated Financial Information

<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA                                               YEARS ENDED JUNE 30,
                                                    1999            2000            2001            2002             2003
<S>                                             <C>             <C>           <C>             <C>             <C>
Revenues                                        $         -     $         -   $   1,301,432   $   3,107,324   $   3,141,448
Total operating expenses                          2,504,838       2,491,128       4,362,413       5,295,375       4,456,082
Operating loss                                   (2,504,838)     (2,491,128)     (3,060,981)     (2,188,051)     (1,314,634)
Interest (expense)/income                        (2,403,997)     (1,363,360)        976,107         615,294         638,011
Income (Loss) from continuing operations
before
     income taxes                                (6,208,976)     (4,232,603)     (5,010,726)     (2,964,039)      1,069,049
Net Income (Loss) from continuing operations     (6,210,195)     (4,233,222)     (5,010,726)     (2,964,039)      1,069,049
(Loss)/gain from discontinued operations         (4,916,267)    (34,429,264)              -        (824,761)       (736,947)
Loss on disposition                                       -               -      (2,389,383)              -        (262,754)
Extraordinary Item - gain on extinguishments
of debt                                                   -               -       2,142,949               -               -
Net (loss)/income                               (11,126,462)    (38,662,486)     (5,257,160)     (3,788,800)         69,348
Income (Loss) per share  - from continuing
     Operations                               $       (0.95)  $       (0.54)  $       (0.57)  $       (0.34)            .12

<CAPTION>
BALANCE SHEET DATA                                                            AS OF JUNE 30,
                                                      1999             2000            2001           2002           2003
<S>                                           <C>             <C>             <C>             <C>                         <C>
Total assets                                  $ 102,615,018   $  94,266,439   $  15,931,857   $  11,722,781               $
                                                                                                                 12,354,162
Long term liabilities                            33,598,244      15,473,769               -               -         349,289
Net working capital (1)                          28,276,771      31,414,757       4,253,001       2,345,828         192,081
Stockholders' equity                              2,090,966       5,595,870      13,578,710      10,212,073      10,025,049
</TABLE>


(1)   Net working capital is the net of current assets and current liabilities.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

BACKGROUND AND HISTORY

Silverstar  Holdings  Limited was  incorporated in September 1995. The Company's
intention is to actively pursue  acquisitions  fitting a pre defined  investment
strategy:

o    Acquiring  controlling  stakes in small,  high  quality,  sports  media and
     marketing  businesses with strong  management  teams that are positioned to
     use technology and Internet related platforms to fuel above average growth.

o    Our investments must show an ability to contribute,  in the short to medium
     term,   to  earnings  per  share  through   operating   profit  or  capital
     appreciation.

o    We aim to add value to our  investments  by operating in  partnership  with
     committed,  entrepreneurial  management  who show the vision and ability to
     grow their businesses into industry or niche leaders.

The Company sold its last remaining  South African  operations in November 2000.
The Company still has  significant  assets that are denominated in South African
Rand. The assets include cash and notes receivable.  Should the Company hold the
notes until maturity the Company will continue to record income  statement gains
or losses to the extent  that the Rand's  value  fluctuates  relative  to the US
dollar.  At the present  time,  management  has no intention of disposing of the
notes receivable.

                                      -6-
<PAGE>

On  November  17,  2000,  the  Company  acquired  all of the assets and  certain
liabilities of Fantasy Sports (Fantasy) from GoRacing Interactive Services, Inc.
Founded in 1993,  Fantasy Sports  operates the  fantasycup.com,  fantasycup.org,
fantasycup.net, fantasystockcar.com and fantasynhra.com websites and specializes
in subscription based NASCAR, college football and other fantasy sports games as
well as the sale of die-cast racing cars.

On September  24,  2001,  a newly  created  subsidiary  of the Company,  Student
Sports,  Inc.,  acquired  all  the  assets  and  business  and  assumed  certain
liabilities  of  Student  Sports,  a  media  company,   producing  publications,
television programs and various marketing initiatives for the high school sports
market.  On June 10, 2003, the Company disposed of substantially  all the assets
and  liabilities of Student Sports,  which was the only operating  subsidiary in
the marketing services segment of the Company.

In accordance with accounting principles generally accepted in the United States
of America the operating  results and net assets  related to Student Sports have
been  included  in  discontinued   operations  in  the  company's   consolidated
statements  of  operations  and   consolidated   balance  sheets.   Discontinued
operations  for the  fiscal  years  ending  June 30,  2003 and  2002,  represent
operating results for eleven and nine months, respectively.  Net assets of $0.05
million and net liabilities of $0.06 million were assumed by the parent company.

The discontinued  operations  generated sales of $1.26 million and $1.12 million
for the years ended June 30, 2003,  and 2002 and net losses from  operations  of
$0.74 million and $0.82 million, respectively.

RESULTS OF OPERATIONS

FISCAL 2003 COMPARED TO FISCAL 2002

Revenues
Revenues  were $3.14  million in fiscal  2003.  Revenues  in the prior year were
$3.10  million.  The  increase is the result of an increase of revenues of $0.23
million in the sale of NASCAR related  die-cast  cars,  apparel and other items,
offset by a smaller decrease in games revenue.

Cost of Sales
Cost of sales were $2.01 million in fiscal 2003. Cost of sales in the prior year
were $1.88 million and are  attributable  to Fantasy.  The increase is primarily
caused by increased sale of die cast collectibles.

Selling, General and Administrative Expenses
Selling, general and administrative expenses for fiscal 2003 were $2.32 million,
a  decrease  of $0.96  million  over the same  period  in the prior  year.  This
decrease is due to sustained  efforts to reduce expenses to achieve  operational
profitability.

Amortization and Depreciation
Amortization  of  intangible  assets was $0.07  million in both  fiscal 2003 and
2002. Depreciation expense was $0.07 million in fiscal 2003 as compared to $0.08
million in fiscal 2002.

Foreign Currency Gains
Foreign  currency gains or losses are related to the financial  assets remaining
in the discontinued South African operations.  The Foreign currency gains during
fiscal 2003 were $1.76  million as  compared  to a loss of $1.35  million in the
prior year as a result of the appreciation of the South African Rand against the
US dollar.  These  foreign  currency  gains or losses are  non-cash  items until
converted into US dollars, when any unrealized gains or losses will be converted
to cash.

                                      -7-
<PAGE>

Interest Income
Interest  income of $0.65 million was recorded during fiscal 2003 as compared to
interest income of $0.63 million in fiscal 2002. The increase in interest income
in fiscal 2003 is primarily a result of the  appreciation  of the South  African
Rand against the dollar,  which affects interest earned on Notes Receivable from
the sale of the Lifestyle business.

Interest Expense
Interest  expense  during  fiscal 2003 was $0.12 as  compared to a  non-material
amount in the prior year. The increase in interest  expense is  attributable  to
interest charges  incurred on short-term  credit lines and lease facilities held
by the Company's subsidiaries.

Provision for Income Taxes
The Company is registered in Bermuda, where no tax laws are applicable. Three of
the Company's subsidiaries are subject to income taxes. Up to this date, none of
them has had taxable  income.  They have incurred  losses for tax purposes.  The
deferred tax asset  generated by the tax losses and  temporary  differences  has
been fully reserved.

Discontinued Operations
Student  Sports was sold in June 2003.  The results for this  business  for both
2002 and 2003 have been included under Discontinued  Operations in our financial
statements.

Net Income (Loss)
The Company has  recognized  income of $0.07 million during fiscal 2003 compared
to a loss of $3.79  million  during the prior year.  The current  year  includes
non-cash  foreign  currency  gains of  approximately  $1.76  million  due to the
appreciation  of the South  African Rand against the US dollar of  approximately
36% during the year,  offset by non-cash charges of approximately  $0.59 million
related to the sale of Student  Sports and the write down of intangible  assets.
The prior year loss included  non-cash  foreign currency losses of $1.35 million
due to the  devaluation  of the  South  African  Rand  against  the US dollar of
approximately 29% during the year. The discontinued  operations (Student Sports)
generated net losses from  operations of $0.74 million for fiscal 2003.  Without
these  items,  the net loss for fiscal  2003  would  have been $0.43  million as
compared to $1.61 million loss for fiscal 2002.

FISCAL 2002 COMPARED TO FISCAL 2001

Revenues
Revenues  were $3.11  million in fiscal 2002 as a result of  revenues  earned by
Fantasy  Sports,  which was acquired  during the second  quarter of fiscal 2001.
Revenues  in the prior  year were  $1.30  million  and were  related  to Fantasy
Sports.  The  increase  is the result of  recognizing  a full year of  Fantasy's
revenues in fiscal 2002.

Cost of Sales
Cost of sales were $1.88 million in fiscal 2002 as a result of Fantasy  Sports's
operations.  Cost  of  sales  in the  prior  year  were  $0.87  million  and are
attributable  to Fantasy.  The increase is due to a full year of operations  for
Fantasy  Sports  during  Fiscal  year  2002 and a bulk  sale of  Fantasy  Sports
inventory.

Selling, General and Administrative Expenses
Selling, general and administrative expenses for fiscal 2002 were $3.23 million,
an  increase  of $0.17  million  over the same  period in the prior  year.  This
increase is due to having a full year of Fantasy as compared  with six months in
the prior year, offset by a reduction in overall corporate expenses.

                                      -8-
<PAGE>

Amortization and Depreciation
Amortization of intangible assets decreased from $0.37 million in fiscal 2001 to
$0.07  million in the current  year as a result of the  adoption of Statement of
Financial  Accounting  Standards ("SFAS") No. 142 "Goodwill and Other Intangible
Assets,"  whereby  the  Company  no longer  amortizes  amounts  attributable  to
goodwill.  Depreciation  expense was $0.08 million in fiscal 2002 as compared to
$0.07 million in fiscal 2001.

Equity in Losses of Unconsolidated Affiliates
Equity in losses of unconsolidated  affiliates decreased to zero for fiscal 2002
compared to a loss of $1.92  million in fiscal 2001.  The decrease is due to the
Company  recognizing losses to the extent of their investment in the prior year.
The Company's investment in Magnolia, effective with the third quarter of fiscal
2002 is being accounted for under the cost method.  Therefore, no further income
or loss from Magnolia's operations will be recognized by the Company.

Foreign Currency Loss
Foreign  currency losses are related to the assets remaining in the discontinued
South African  operations.  The Foreign  currency losses during fiscal 2002 were
$1.35  million as compared to $1.04 million in the prior year as a result of the
deterioration  of the South  African Rand against the US dollar.  These  foreign
currency  losses are non-cash items until  converted  into US dollars,  when any
unrealized gains or losses will be converted to cash.

Interest Income
Interest  income of $0.63 million was recorded during fiscal 2002 as compared to
interest income of $1.55 million in fiscal 2001. During fiscal 2001, the Company
earned  interest  on the  proceeds  realized  on the  sale of  Lifestyle.  These
proceeds  were  utilized  to pay down  debt and  invested  in  interest  bearing
accounts.  The  decrease in interest  income in fiscal 2002 is a result of lower
invested cash balances,  as well as the  deterioration of the South African Rand
against the dollar,  which affects  interest earned on Notes Receivable from the
sale of the Lifestyle business.

Interest Expense
Interest  expense  during  fiscal 2002 was not material as compared to the $0.57
million in the prior year. The decrease in interest  expense is  attributable to
the  repayment of  approximately  $12 million of  increasing  rate  subordinated
convertible debentures during the third and fourth quarters of fiscal 2001.

Preference Dividend
The preference dividend related to the mandatory redeemable preference shares of
Lifestyle.  These preferred  shares were redeemed with the sale of Lifestyle and
there were no additional dividends after the second quarter of fiscal 2001.

Provision for Income Taxes
The Company is registered in Bermuda, where no tax laws are applicable. Three of
the Company's subsidiaries are subject to income taxes. Up to this date, none of
them has had taxable  income.  They have incurred  losses for tax purposes.  The
deferred tax asset  generated by the tax losses and  temporary  differences  has
been fully reserved.

Discontinued Operations
The  Lifestyle  business was sold in November  2000 and has not been included in
the  Company's  results  since that time.  The income  during the prior year was
earned before the disposition of the business.

                                      -9-
<PAGE>

Extraordinary Item - Gain on Extinguishment of Debt
During the last half of fiscal 2001, the Company negotiated  agreements with its
lenders to retire  $11.70  million  of  debentures  at face  value plus  accrued
interest. As a result, the Company recorded a gain on previously accrued sinking
fund  interest of $2.14 million in fiscal 2001.  Since the remaining  debentures
were paid off at their  maturity in October 2001, no such  transaction  occurred
during fiscal 2002.

Net Loss
The Company has  recognized  a loss of $3.79  million  during  fiscal  2002,  as
compared  to a loss of $5.26  million  during the prior year.  The current  year
includes   non-cash  foreign  currency  losses  of  $1.35  million  due  to  the
devaluation of the South African Rand against the US dollar of approximately 29%
during the year and losses from  discontinued  operations  of $0.83  million for
Student  Sports,  Inc.  which was sold during  fiscal 2003.  The prior year loss
included  $1.04 million of non-cash  foreign  currency  losses and $2.39 million
loss on the disposal of  discontinued  operations,  offset by the  extraordinary
gain on the  extinguishments of debt of $2.14 million.  Without these items, the
net loss for fiscal  2002 would have been  $2.44  million as  compared  to $3.97
million for fiscal 2001.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash  decreased  by $0.9  million  from $2.54  million at June 30, 2002 to $1.62
million at June 30, 2003.  The balance of the  remaining  cash is being held for
working capital  purposes.  The Company expects this balance to be sufficient to
fund its operations and the operations of its  subsidiaries  for the next twelve
months.  During the next twelve months,  it also anticipates the commencement of
repayment  of  notes  receivable  due to it from  the  sale of  First  Lifestyle
Holdings in South Africa.  However,  repayment is  contingent on the  borrower's
collection of junior debt.

Working  capital  decreased by $2.16 million from $2.35 million at June 30, 2002
to $0.19 million at June 30, 2003.  This is primarily due to the losses incurred
by the Company's operating subsidiaries.

At June 30, 2003, the Company had borrowings of $0.28 million,  which  consisted
of $0.22 million advances against lines of credit and $0.06 million of equipment
loans.

The  Company  has  guaranteed  certain  bank  facilities  of some of its  former
industrial subsidiaries in South Africa.  Currently,  these guarantees amount to
approximately  $0.7 million and are secured by like amounts of cash. The Company
has reduced  these  guarantees  from  approximately  $0.9 million as of June 30,
2002. These  guarantees are reducing by approximately  $0.013 million per month.
In the event that these  guarantees  are called,  the  Company  has  recourse to
certain  assets of these  subsidiaries,  which  should  substantially  cover the
Company's potential exposure. Additionally, as of June 30, 2003, the Company has
guaranteed  approximately  $0.17  million  of the debt of Fantasy  Sports.  Such
guarantee is secured by the Company's cash.

Management  believes that its present financial resources are sufficient to meet
its obligations for the ensuing twelve months.  In addition to unrestricted cash
of  approximately  $0.8 million at June 30, 2003,  the Company  expects to begin
collecting  on an  outstanding  note  receivable  due  from  the  sale of  First
Lifestyle Holdings in March 2004, which will provide additional  resources.  The
Company is also working to find an  alternative  guarantor  for the  approximate
$700,000  it has  guaranteed  for the  bank  lines  of a  former  South  African
subsidiary. Additionally, the Company believes it would be able to raise debt or
equity capital should the need arise.

 The Company intends to work on building its existing  portfolio of subsidiaries
in terms of revenues and profitability.  It may also acquire further synergistic
businesses  and may therefore  utilize a portion of its remaining  cash balances
and the  proceeds of its  disposal  of  Lifestyle  to fund this  strategy to the
extent that suitable acquisition  candidates can be identified.  The Company may
be required to incur  additional


                                      -10-
<PAGE>

indebtedness  or equity  financing  in  connection  with the  funding  of future
acquisitions.  There is no  assurance  that the  Company  will be able to secure
additional   indebtedness   or  raise   additional   equity  to  finance  future
acquisitions on terms acceptable to management, if at all.

OFF-BALANCE SHEET ARRANGEMENTS

In order to  facilitate  an  orderly  sale of one of its  former  South  African
subsidiaries,  in 1999 the Company  provided a guarantee for the bank facilities
of this subsidiary in South Africa.  At the time, this guarantee was provided on
an unsecured basis by our wholly owned subsidiary, First South African Holdings.
In November 2000,  upon the subsequent sale of the majority of our South African
assets and the  repatriation of the cash proceeds of this sale, we were required
to provide a bank guarantee to secure the  continuation of this credit facility.
As a result,  during  fiscal 2001 and 2002 we provided a bank  guarantee  in the
amount of R9 million ($US 900,000) to secure such  facility.  The bank guarantee
is in turn secured by the equivalent amount in US dollars.  In December 2002, we
negotiated  a  restructure  of this South  African  facility,  reducing the face
amount of our guarantee to R5.5 million ($US 730,000). Our former subsidiary, in
turn,  is reducing its bank line through the  repayment of R150,000 ($US 20,000)
per month in interest and  principal.  Our exposure as of June 30, 2003 has been
reduced to  approximately  R5.3 million ($US 700,000) and we anticipate it to be
reduced by approximately R100,000 ($13,000) per month over the next fiscal year.
At current  exchange  rates,  we have  approximately  $667,000  restricted  cash
securing  this  guarantee.  We are  comfortable  that  this  guarantee  will  be
significantly reduced over the next two years, during which time we believe that
alternative  arrangements  will be made so that this guarantee will no longer be
in force.

In 2001,  Fantasy  Sports Inc.  secured a revolving  line of credit for up to $1
million  from a bank.  Fantasy have drawn and repaid on this line of credit from
time to time. Any borrowings  under this facility are guaranteed by the Company-
on hand at UBS.  As of June 30,  2003,  Fantasy  had an  outstanding  balance of
approximately  $165,000  secured  by a like  amount of the  Company's  cash.  We
anticipate  that this line may fluctuate  over the course of the current  fiscal
year.  However,  based on past experience and current anticipated cash flows, we
believe that Fantasy will repay all amounts  outstanding  under this facility on
or before March 31, 2004.


GOODWILL IMPAIRMENT TEST

We acquired Fantasy Sports,  Inc. in November 2000. At the time our strategy was
to  aggressively  expand  the  business  by  increasing  our  marketing  in  the
auto-racing  segment and developing new games for other niche sports markets. To
this end, we hired new staff and increased our marketing and development budgets
as  well.  This  strategy  was not  successful,  primarily  due to the  economic
slowdown  and as a  result,  Fantasy  has  incurred  losses  since we made  this
acquisition.  During  the  seven  months  ended  June  30,  2001,  Fantasy  lost
$1,320,000  and had negative cash flow of $268,000.  For the twelve months ended
June 30, 2002, Fantasy lost $1,135,000 with negative cash flow of $566,000.  For
the twelve months ended June 30, 2003,  Fantasy lost $314,715 with negative cash
flow of $185,860.

Due to the accounting recognition of these losses, the carrying value of Fantasy
has diminished since  acquisition.  On June 30, 2003, we performed an impairment
test on the carrying value of Fantasy's  goodwill.  In accordance with SFAS 142,
we  compared  the fair value of Fantasy (as a  reporting  unit) to the  carrying
value of Fantasy including  goodwill.  The methodology we used to determine fair
value was to develop a ratio of revenue to market  capitalization  utilizing the
Company and a comparable  publicly  traded  company in the same  industry.  This
ratio was then applied to Fantasy's  revenue to determine  fair value.  The fair
value  exceeded  Fantasy's  carrying  value,  and  therefore,  no  impairment of
goodwill existed at June 30, 2003.

                                      -11-
<PAGE>

We will continue to monitor the carrying values of Fantasy and will use the same
methodology on a consistent basis in the future.  Should our efforts to stem the
losses at Fantasy not succeed and losses and negative cash flow continue, we may
be faced with goodwill impairment losses for Fantasy in the future.

FUTURE COMMITMENTS

Through June 30, 2003,  Fantasy Sports Inc., the Company's  remaining  operating
subsidiary, had incurred net losses. The Company anticipates that this situation
will be rectified  through a  combination  of expense  reductions  and increased
revenues.   However,  there  are  no  assurances  that  these  changes  will  be
successful.  In the event that these plans are not  successful,  the Company may
need to continue to support the operations of its subsidiary.

The Company intends to bring its operating  subsidiary to  profitability  and to
preserve its cash balances to the best of its ability.  The Company  anticipates
continued  repayments from the notes  receivable from the sale of certain of its
South African subsidiaries.

CRITICAL ACCOUNTING POLICIES

The  following  is a  discussion  of the  accounting  policies  that the Company
believes are critical to its operations:

REVENUES
Revenues  generated  by Fantasy are  seasonal  from  mid-February  to the end of
November.  Fantasy  collects its revenue at the  beginning  and mid-point of the
season and recognizes  this deferred  revenue pro rata over the season.  Student
Sports recognized  subscription  revenue over the life of the subscription.  For
event-type  revenue,  revenue was recognized  over the course of the contract in
proportion to the expenses for the period compared to total expenses anticipated
for the specific  event.  Revenues  from  television  sports  shows  produced by
Student  Sports for  television  stations were  recognized  when the show aired.
Student Sports, while somewhat less affected by seasonal factors, generated less
revenue in the December quarter than during the rest of the year.

GOODWILL
The  Company  adopted  SFAS  142  during  fiscal  2002 and no  longer  amortizes
goodwill.  The Company tests  goodwill for  impairment in the fourth quarter for
Fantasy Sports,  Inc. The goodwill  impairment test for subsequent  acquisitions
will be performed on the one-year  anniversary  of the  acquisition  and in that
period  thereafter.  The Company performs the impairment test in accordance with
SFAS 142 "Goodwill and Other Intangible Assets." SFAS 142 requires that the fair
value  of the  reporting  unit be  compared  to the  carrying  value,  including
goodwill,  as the first step in the impairment test. The Company determines fair
value for  Fantasy by  developing  a ratio of  revenue to market  capitalization
utilizing  the Company and  comparable  publicly  traded  companies  in the same
industry and applying this ratio to revenue of the reporting unit.

INTANGIBLE ASSETS
Intangible  assets include  trademarks,  customer  lists and other  intellectual
property and non-competition agreements.  Intangible assets, excluding goodwill,
are stated on the basis of cost and are amortized on a straight-line  basis over
a period of three to ten years.  Intangible assets with indefinite lives are not
amortized but are evaluated for impairment annually unless circumstances dictate
otherwise.  Management  periodically  reviews  intangible  assets for impairment
based on an assessment of undiscounted  future cash flows, which are compared to
the carrying value of the intangible assets.  Should these cash flows not equate
to or exceed the carrying value of the intangible,  a discounted cash flow model
is used to determine the extent of any impairment charge required.

                                      -12-
<PAGE>

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company  does not  ordinarily  hold market risk  sensitive  instruments  for
trading  purposes.  The company does however recognize market risk from interest
rate and foreign currency exchange exposure.

INTEREST RATE RISK
At June 30, 2003, the Company's cash resources earn interest at variable  rates.
Accordingly,  the Company's return on these funds is affected by fluctuations in
interest  rates.  Any decrease in interest rates will have a negative  effect on
the Company's earnings.  There is no assurance that interest rates will increase
or decrease over the next fiscal year.

FOREIGN CURRENCY RISK
Certain of the Company's cash balances and the remaining  proceeds from the sale
of its South African  subsidiaries  are  denominated in South African Rand. This
exposes the Company to market risk with respect to  fluctuations in the relative
value of the South  African Rand against the US Dollar.  Due to the  prohibitive
cost of hedging these proceeds, the exposure has not been covered as yet. Should
more  favorable  conditions  arise,  a suitable  Rand hedge may be considered by
management.  For every 1%  increase or decline in the  Rand/US  Dollar  exchange
rate, at year-end exchange rates, the Company would gain or lose $1,325 on every
R1,000,000 retained in South Africa.  During fiscal 2003, the South African Rand
has appreciated against the US dollar by approximately 26% from the rate at June
30, 2002. At June 30, 2003, the Company had assets  denominated in South African
Rand of 49.58million.

The following is information concerning assets denominated in South African Rand
and the foreign currency gains and losses recognized during fiscal 2003:

                                                  Foreign Currency
                                              Gain/(Loss) for the Year
                    As of June 30, 2003          Ended June 30, 2003
                         In Rand                    In US Dollars
Cash                     1,282,727                      $47,486
Notes Receivable        48,270,325                    1,786,935
Other                       33,843                      (71,306)


                                      -13-
<PAGE>


                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2003, 2002 AND 2001

<PAGE>


                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                -----------------

                                                                PAGE
                                                                ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT               F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets                                               F-2

   Statements of Operations                                     F-3

   Statements of Stockholders' Equity and Comprehensive Loss    F-4

   Statements of Cash Flows                                     F-5 - F-6

   Notes to Consolidated Financial Statements                   F-7 - F-30


<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
Silverstar Holdings Limited
Boca Raton, Florida


We have  audited the  accompanying  consolidated  balance  sheets of  Silverstar
Holdings  Limited and  Subsidiaries  (the Company) as of June 30, 2003 and 2002,
and the related consolidated statements of operations,  stockholders' equity and
comprehensive  loss,  and cash flows for each of the three  years ended June 30,
2003. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

In our opinion, the accompanying  consolidated  financial statements referred to
above present  fairly,  in all material  respects,  the  consolidated  financial
position of Silverstar  Holdings  Limited and  Subsidiaries at June 30, 2003 and
2002, and the consolidated  results of their operations and their cash flows for
each of the three years  ended June 30,  2003,  in  conformity  with  accounting
principles generally accepted in the United States.


                            RACHLIN COHEN & HOLTZ LLP


Fort Lauderdale, Florida
August 19, 2003


                                      F-1
<PAGE>


                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2003 AND 2002
<TABLE>
<CAPTION>
                                ASSETS                                                        2003             2002
                                                                                          ------------     ------------
<S>                                                                                      <C>              <C>
Current Assets:
    Cash and cash
    equivalents
    (includes restricted cash of $835,951 and $953,955 in 2003 and 2002, respectively)    $  1,617,629     $  2,540,667
    Accounts receivable, net                                                                    17,816           25,594
    Inventories                                                                                168,113          121,630
    Current portion of long-term notes receivable                                              248,205          409,971
    Prepaid expenses and other current assets                                                  120,142           96,336
    Net assets of discontinued operations                                                            0          977,793
                                                                                          ------------     ------------
    Total Current Assets                                                                     2,171,905        4,171,991
Property, Plant and Equipment, net                                                             140,301          113,062
Investments in Non-Marketable Securities                                                       843,566          843,566
Long-Term Notes Receivable                                                                   6,213,686        3,859,138
Goodwill, net                                                                                2,947,824        2,947,824
Intangible Assets, net                                                                          30,750           97,750
Deferred Charges and Other Assets                                                                6,130            4,855
                                                                                          ------------     ------------
      Total Assets
                                                                                          $ 12,354,162     $ 12,038,186
                                                                                          ============     ============
                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Bank overdraft                                                                                                    $
                                                                                          $        567                -
    Lines of credit                                                                            218,851           50,000
    Current portion of long-term debt                                                           26,237
    Accounts payable                                                                           482,697          240,530
    Accrued expenses                                                                           415,399          341,531
    Deferred revenue                                                                           836,073          878,647
                                                                                          ------------     ------------
      Total Current Liabilities                                                              1,979,824        1,510,708
                                                                                          ------------     ------------
Long-Term Debt                                                                                  33,884                -
Obligation Related to Acquisition                                                              315,405          315,405
                                                                                          ------------     ------------
      Total Liabilities                                                                      2,329,113        1,826,113
                                                                                          ------------     ------------
Commitments, Contingencies and Other Matters                                                         -                -

Stockholders' Equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized;
     no shares issued and outstanding                                                                -                -
Common stock, Class A, $0.01 par value, 23,000,000 shares authorized; 7,503,924 and
     8,001,310 shares issued and outstanding, respectively                                      75,039           80,013
Common stock, Class B, $0.01 par value; 2,000,000 shares authorized; 946,589 and
     946,589 shares issued and outstanding, respectively                                         9,466            9,466
Common stock, FSAH Class B $0.001 par value; 10,000,000 shares authorized; 2,671,087
     and 2,671,087 shares issued and outstanding, respectively                                     600              600
Additional paid-in capital                                                                  63,512,472       63,763,870
Accumulated deficit                                                                        (53,572,528)     (53,641,876)
                                                                                          ------------     ------------
Total Stockholders' Equity                                                                  10,025,049       10,212,073
                                                                                          ------------     ------------
Total Liabilities and Stockholders' Equity                                                $ 12,354,162     $ 12,038,186
                                                                                          ============     ============
</TABLE>

                 See notes to consolidated financial statements

                                      F-2
<PAGE>

                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED JUNE 30, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                      2003            2002            2001
                                                                  -----------     -----------     -----------
<S>                                                               <C>             <C>             <C>
Revenues                                                          $ 3,141,448     $ 3,107,324     $ 1,301,432
                                                                  -----------     -----------     -----------
Operating Expenses:
    Cost of sales                                                   2,005,598       1,879,967         869,185
    Selling, general and administrative                             2,315,056       3,272,286       3,055,955
    Amortization of intangibles                                        67,000          67,000         369,318
    Depreciation                                                       68,428          76,122          67,955
                                                                  -----------     -----------     -----------
                                                                    4,456,082       5,295,375       4,362,413
                                                                  -----------     -----------     -----------
Operating Loss                                                     (1,314,634)     (2,188,051)     (3,060,981)
Interest in Losses of Unconsolidated Affiliates                             -               -      (1,919,026)
Other (Expense) Income                                                (17,443)        (45,934)        200,757
Preference Dividend                                                         -        (165,109)
Foreign Currency Gain ( Loss)                                       1,763,115      (1,345,348)     (1,042,474)
Interest Income                                                       650,329         627,019       1,548,882
Interest Expense                                                      (12,318)        (11,725)       (572,775)
                                                                  -----------     -----------     -----------
Income (Loss) from Continuing Operations Before Income Taxes        1,069,049      (2,964,039)     (5,010,726)
Provision for Income Taxes                                                  -               -               -
                                                                  -----------     -----------     -----------
Income (Loss) From Continuing Operations                            1,069,049      (2,964,039)     (5,010,726)

Discontinued Operations:
    Loss from operations, net of income taxes of
      $0, $0 and $0, respectively                                    (736,947)       (824,761)              -
    Loss on disposition, net of income taxes of $0, $0 and $0,
      Respectively                                                   (262,754)              -      (2,389,383)
                                                                  -----------     -----------     -----------
Income (Loss) Before Extraordinary Item                                69,348      (3,788,800)     (7,400,109)
Extraordinary Item - Gain on Extinguishment of Debt,
    net of Income Taxes of $0                                               -               -       2,142,949
                                                                  -----------     -----------     -----------
Net Income (Loss)                                                 $    69,348     $(3,788,800)    $(5,257,160)
                                                                  ===========     ===========     ===========

Income (Loss) Per Share - Basic and Diluted:
    Continuing Operations                                         $      0.12     $     (0.34)    $     (0.57)
    Discontinued Operations                                             (0.11)         (0.09)           (0.27)
                                                                  -----------     -----------     -----------
        Income (Loss) Before Extraordinary Item                           .01           (0.43)          (0.84)
    Extraordinary Item                                                      -               -            0.24
                                                                  -----------     -----------     -----------
    Net Income (Loss)                                             $       .01     $     (0.43)    $     (0.60)
                                                                  ===========     ===========     ===========

Weighted Average Common Stock Outstanding:
    Basic and diluted                                               8,704,620       8,750,937       8,849,663
                                                                  ===========     ===========     ===========
</TABLE>


                See notes to consolidated financial statements.

                                      F-3

<PAGE>
<TABLE>
<CAPTION>
                                                   Silverstar                   Silverstar
                                                  Holdings Ltd.                Holdings Ltd.
                                                    Class A                       Class B
                                                  Common Stock                  Common Stock
                                           ---------     ----------        -------    ----------
                                            Shares          Amount          Shares      Amount
                                           ---------     ----------        -------    ----------
<S>                                        <C>           <C>               <C>        <C>
 YEAR ENDED JUNE 30, 2001:
 BALANCE, JUNE 30, 2000                    8,368,676     $   83,687        946,589    $    9,466
                                           =========     ==========        =======    ==========

 Disposal of FSAH - translation loss               -              -              -             -
 Stock issued to employee                     10,000            100              -             -
 Issuance of warrants for services                 -              -              -             -
 Purchase and retirement of treasury
   stock                                  (1,200,366)       (12,004)             -             -
 Net loss                                          -              -              -             -
                                           ---------     ----------        -------    ----------
 Balance, June 30, 2001                    7,178,310     $   71,783        946,589    $    9,466
                                           =========     ==========        =======    ==========

 YEAR ENDED JUNE 30, 2002:

 Stock issued for acquisition                900,000          9,000              -             -
 Purchase and retirement of treasury         (77,000)          (770)             -             -
   stock

 Net Loss                                          -              -              -             -
                                           ---------     ----------        -------    ----------
 Balance, June 30, 2002                    8,001,310     $   80,013        946,589    $    9,466
                                           =========     ==========        =======    ==========

  YEAR ENDED JUNE 30, 2003:

  Purchase and retirement of  Treasury
    stock                                   (171,700)        (1,717)             -             -
  Stock redemtpion -(sale of
    subsidiary)                             (325,686)        (3,257)             -             -
  Net Income                                                                     -             -

 Balance, June 30, 2003                    7,503,924     $   75,039        946,589    $    9,466
                                           =========     ==========        =======    ==========

</TABLE>


<TABLE>
<CAPTION>
                                                            First SA Holdings
                                                     Class B               Additional
                                                   Common Stock              Paid-in
                                              Shares          Amount         Capital
<S>                                          <C>           <C>              <C>
 YEAR ENDED JUNE 30, 2001:
 BALANCE, JUNE 30, 2000                      2,671,087     $        600     $ 64,307,442
                                             =========     ============     ============

 Disposal of FSAH - translation loss                 -                -                -
 Stock issued to employee                            -                -            7,400
 Issuance of warrants for services                   -                -           34,326
 Purchase and retirement of treasury
   stock                                             -                -         (999,231)
 Net loss                                            -                -                -
                                             ---------     ------------     ------------
 Balance, June 30, 2001                      2,671,087     $        600     $ 63,349,937
                                             =========     ============     ============
 YEAR ENDED JUNE 30, 2002:

 Stock issued for acquisition                        -                -          475,200
 Purchase and retirement of treasury                 -                -          (61,267)
   stock

 Net Loss                                            -                -                -
                                             ---------     ------------     ------------
 Balance, June 30, 2002                      2,671,087     $        600     $ 63,763,870
                                             =========     ============     ============

  YEAR ENDED JUNE 30, 2003:

  Purchase and retirement of  Treasury
    stock                                            -                -          (23,418)
  Stock redemtpion -(sale of
    subsidiary)                               (227,710)               -                -
  Net Income                                         -                -           69,348


 Balance, June 30, 2003                      2,671,087     $        600     $ 63,512,472
                                             =========     ============     ============
</TABLE>


<TABLE>
<CAPTION>
                                                            Accumulated
                                                               Other
                                          Accumulated       Comprehensive
                                            Deficit         Income (Loss)     Total
                                          ------------     ------------     ------------
<S>                                       <C>              <C>              <C>
 YEAR ENDED JUNE 30, 2001:
 BALANCE, JUNE 30, 2000                   $(44,595,916)    $(14,209,409)    $  5,595,870
                                          ============     ============     ============
 Disposal of FSAH - translation loss                 -       14,209,409       14,209,409
 Stock issued to employee                            -                -            7,500
 Issuance of warrants for services                   -                -           34,326
 Purchase and retirement of treasury
   stock                                             -                -       (1,011,235)
 Net loss                                   (5,257,160)               -       (5,257,160)
                                          ------------     ------------     ------------
 Balance, June 30, 2001                   $(49,853,076)    $          -     $ 13,578,710
                                          ============     ============     ============

 YEAR ENDED JUNE 30, 2002:

 Stock issued for acquisition                        -                           484,200
 Purchase and retirement of treasury                 -                -          (62,037)
   stock

 Net Loss                                   (3,788,800)               -       (3,788,800)
                                          ------------     ------------     ------------
 Balance, June 30, 2002                   $(53,641,876)    $          -     $ 10,212,073
                                          ============     ============     ============

  YEAR ENDED JUNE 30, 2003:

  Purchase and retirement of  Treasury
    stock                                            -                -          (25,135)
  Stock redemtpion -(sale of
    subsidiary)                                                                 (231,237)
  Net Income                                    69,348

                                          ------------     ------------     ------------
 Balance, June 30, 2003                   $(53,572,528)               0     $ 10,025,049
                                          ============     ============     ============
</TABLE>


                                      F-4
<PAGE>

                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    YEARS ENDED JUNE 30, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                    2003            2002            2001
                                                                 ----------      ----------      ----------
<S>                                                             <C>             <C>              <C>
Cash Flows from Operating Activities:
    Net income( loss) from continuing operations                $ 1,069,049     $(2,964,039)     (5,010,726)
    Provision for doubtful accounts                                   3,365               -               -
    Dividend charge                                                       -               -         165,109
    Depreciation and amortization                                   135,428         143,132         437,273
    Deferred income taxes                                                 -               -               -
    Foreign currency (gains) losses                              (1,704,106)      1,212,220       1,092,145
    Non-cash interest income on notes receivable                   (603,984)       (465,590)       (515,950)
    Issuance of stock and warrants for services                           -               -          41,826
    Changes in operating assets and liabilities, net                193,261          (9,010)       (943,728)
    Decrease in other assets                                         (2,274)        171,583          32,351
    Creation of debenture redemption reserve fund                     4,248         266,748
    Loss on disposal of fixed assets                                    182               -               -
    Equity in losses of affiliates                                        -               -       1,919,026
                                                                 ----------      ----------      ----------

        Net Cash Used in Continuing Operations                     (909,079)     (1,907,456)     (2,515,926)
        Net Cash Used in Discontinued Operations                   (247,000)     (1,003,650)     (1,090,173)
                                                                 ----------      ----------      ----------
        Net Cash Used in Operating Activities                    (1,156,079)     (2,911,106)     (3,606,099)
                                                                 ----------      ----------      ----------

Cash Flows from Investing Activities:
    Proceeds on disposal of discontinued operations                       -               -      11,102,549
    Acquisition of intangibles                                            -               -         (49,332)
    Acquisition of property, plant and equipment                    (24,701)        (36,628)     (1,662,725)
    Proceeds on disposal of property, plant and equipment                 -               -          74,150
    Purchase price adjustments                                                      200,000               -
    Investment in affiliates                                                       (212,500)              -
    Decrease in long-term note receivable                           115,308         428,607         612,160
    Loan to affiliate                                                     -               -        (250,000)
    Repayment of loans by affiliates                                      -               -         161,500
    Acquisition of subsidiaries (net of cash of $0,
      $0, $0 and 863,337)                                                 -        (120,711)     (3,454,569)
    Other                                                                                             1,042
                                                                 ----------      ----------      ----------
        Net Cash  Provided by Investing Activities                   90,607         258,768       6,534,775
                                                                 ----------      ----------      ----------
</TABLE>

                                      F-5
<PAGE>


                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

                    YEARS ENDED JUNE 30, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                   2003             2002             2001
                                                               ------------     ------------     ------------
<S>                                                            <C>              <C>              <C>
Cash Flows from Financing Activities:
    Short term borrowings, net                                 $    168,851     $    (42,887)    $   (999,883)
    Repayment of long-term debt                                      (1,282)        (366,084)      (1,246,822)
    Redemption of debentures                                              -                -      (11,700,000)
    Redemption of preferred shares                                        -                -       (8,153,928)
    Treasury stock transactions                                     (25,135)         (62,037)      (1,011,232)
                                                               ------------     ------------     ------------
        Net Cash (Used in) Provided by Financing Activities         142,434         (471,008)     (23,111,865)

Effect of Exchange Rate Changes on Cash                                                            (4,005,865)
                                                               ------------     ------------     ------------

Net Decrease in Cash and Cash Equivalents                          (923,038)      (3,123,346)     (24,189,054)

Cash and Cash Equivalents, Beginning                              2,540,667        5,664,013       29,853,067
                                                               ------------     ------------     ------------

Cash and Cash Equivalents, Ending                              $  1,617,629     $  2,540,667     $  5,664,013
                                                               ============     ============     ============

Supplemental Disclosure of Cash Flow Information:
    Cash paid during the period for interest                   $     12,318     $      6,001     $    373,574
                                                               ============     ============     ============
    Cash paid during the period for income taxes               $          -     $          -     $          -
                                                               ============     ============     ============
</TABLE>

                See notes to consolidated financial statements.


                                      F-6
<PAGE>


                  SILVERSTAR HOLDINGS LIMITED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2003, 2002 AND 2001


NOTE 1.  ORGANIZATION AND PRINCIPAL ACTIVITIES OF THE GROUP

Silverstar  Holdings  Limited  (formerly   Leisureplanet   Holdings  Ltd.)  (the
"Company"),  was founded on  September  6, 1995.  The purpose of the Company has
changed from  acquiring  and operating  South African  Companies to investing in
companies that fit a predefined investment strategy.

On November 17, 2000, the Company  acquired  Fantasy Sports,  Inc.  ("Fantasy").
Fantasy specializes in Internet-based subscriptions for NASCAR, college football
and basketball and other fantasy sports games and sale of die-cast  racing cars.
On September 24, 2001,  the Company  acquired  Student  Sports,  Inc.  ("Student
Sports"),  a media  company  producing  publications,  television  programs  and
various  marketing  initiatives for the high school sports market. In June 2003,
the  company  sold  it's  Student  Sports  subsidiary  and  it is  reflected  as
discontinued   operations  in  the  accompanying   financial  statements.   (See
Discontinued operations below)

Additional investments have been made in other companies, which are in line with
the Company's new focus (see Note 7).

DISCONTINUED OPERATIONS
On June 10, 2003, the company sold  substantially  all assets and liabilities of
Student Sports, Inc effective as of May 15, 2003. The consideration for the sale
of Student  Sports was 325,686 shares of Silverstar  Holdings  common stock that
were returned to the Company as well as the  forgiveness of a maximum of 913,745
contingent shares of Silverstar  Holdings that could have been payable to former
Student Sports shareholders in April 2004. (see Note 13)

The original investment made in  Leisureplanet.com  ("LPI"), the Internet travel
related  services  company,  has  been  unsuccessful  due to a lack  of  further
investor funding.  Therefore,  on August 2, 2000, LPI was placed under voluntary
administration in the United Kingdom and subsequently liquidated (see Note 13).

In addition to LPI, First Lifestyle Holdings Limited ("Lifestyle"), the products
segment, was also discontinued in line with the shift in strategy of the holding
company. This segment was involved in the manufacture,  sale and distribution of
lifestyle enhancing  products,  which included both consumable food products and
semi-durable outdoor and indoor products (see Note 13).

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  consolidated  financial  statements  have been prepared in accordance  with
accounting  principles  generally  accepted in the United States and incorporate
the following significant accounting policies:

CONSOLIDATION
The consolidated  financial  statements  include the accounts of the Company and
all of its subsidiaries in which it has a majority voting interest.  Investments
in  affiliates  are  accounted  for under  either the  equity or cost  method of
accounting,  where  appropriate.  All  significant  inter-company  accounts  and
transactions have been eliminated in the consolidated financial statements.  The
entities included in these consolidated financial statements are as follows:


                                      F-7
<PAGE>


                Silverstar Holdings, Ltd. (Parent Company)
                Silverstar Holdings, Inc.
                First South African Management Corp.
                First South African Holdings, Ltd. (FSAH)
                Fantasy Sports, Inc.

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and  assumptions  that affect the  reported  amounts of assets and  liabilities,
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and all highly liquid investments with
original maturities of three months or less.

CONCENTRATIONS OF CREDIT AND MARKET RISKS
Financial  instruments that potentially subject the Company to concentrations of
credit and market  risk are  comprised  of cash and cash  equivalents  and notes
receivable.

             CASH
                The Company currently maintains a substantial amount of cash and
                cash  equivalents  with financial  institutions  in South Africa
                denominated  in South African Rand.  Changes in the value of the
                Rand compared to the U.S. dollar can have an unfavorable  impact
                on the  value of the cash and  cash  equivalents.  In  addition,
                these financial instruments are not subject to credit insurance.

                The  Company  maintains  deposit  balances  at  U.S.   financial
                institutions  that,  from  time to time,  may  exceed  federally
                insured  limits.  At June 30,  2003,  there were no  balances in
                excess of federally  insured limits.  The Company  maintains its
                cash with high quality financial institutions, which the Company
                believes limits risk.

             NOTES RECEIVABLE
                The  Company's  notes  receivable  are to be  settled  in  South
                African Rand by South African  companies.  The Company's ability
                to collect on these notes may be affected by economic conditions
                in South  Africa  and the value of the South  African  Rand,  as
                compared to the U.S. dollar. In addition,  the Company's ability
                to withdraw  these funds from South Africa after  collection  is
                restricted  and may be subject to approval by the South  African
                government.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The  carrying  value of cash  and  cash  equivalents,  accounts  receivable  and
accounts payable  approximate  fair value due to the short-term  nature of these
instruments.  The carrying value of long-term notes receivable approximates fair
values since interest rates are keyed to the South African prime lending rate.

INVENTORIES

Inventories  are valued at the lower of cost or market with cost  determined  on
the first-in, first-out method.


                                      F-8
<PAGE>


PROPERTY, PLANT AND EQUIPMENT
Property,  plant and  equipment  is recorded at cost.  Depreciation  is provided
using the  straight-line  method over the estimated  useful lives of the assets.
Equipment  is  depreciated  over  3 to  10  years.  Leasehold  improvements  are
amortized over the terms of the related leases.

SOFTWARE DEVELOPED FOR INTERNAL USE
As a result of the  acquisition  of Fantasy in  November  2000,  the Company has
adopted the provisions of AICPA Statement of Position (SOP) 98-1 "Accounting for
the Costs of Computer  Software  Developed and Obtained for Internal  Use".  SOP
98-1 requires the  capitalization of all internal and external costs incurred to
develop internal use software during the application  development stage. Fantasy
operates its fantasy  league  through the use of software the company  develops.
Fantasy develops software to run its fantasy games; however, such costs were not
significant during fiscal 2003, 2002 or 2001.

GOODWILL
The Company  tests  goodwill for  impairment  in the fourth  quarter for Fantasy
Sports,  Inc. The goodwill  impairment test for subsequent  acquisitions will be
performed  on the one year  anniversary  of the  acquisition  and in that period
thereafter. The Company performs the impairment test in accordance with SFAS 142
"Goodwill and Other Intangible Assets." SFAS 142 requires that the fair value of
the reporting unit be compared to the carrying value, including goodwill, as the
first step in the impairment test. The Company determines fair value for Fantasy
by developing a ratio of revenue to market capitalization  utilizing the Company
and comparable  publicly traded companies in the same industry and applying this
ratio to revenue of the reporting unit.

INTANGIBLE ASSETS
Intangible assets include trademarks,  customer lists, intellectual property and
non-competition agreements. Intangible assets, excluding goodwill, are stated on
the basis of cost and are  amortized on a  straight-line  basis over a period of
three to ten years.  Intangible  assets with indefinite  lives are not amortized
but  are  evaluated  for  impairment  annually  unless   circumstances   dictate
otherwise.  Management  periodically  reviews  intangible  assets for impairment
based on an assessment of undiscounted  future cash flows, which are compared to
the carrying value of the intangible assets.  Should these cash flows not equate
to or exceed the carrying value of the intangible,  a discounted cash flow model
is used to determine  the extent of any  impairment  charge  required.  Customer
lists are amortized over a period of three to ten years. The patents, trademarks
intellectual  property  and  non-compete   agreements  related  to  discontinued
operations were amortized over a period of three to twenty five years, up to the
time of their disposal (see Note 13).

FOREIGN CURRENCY TRANSLATION
The  functional  currency  of the  Company  is the  United  States  Dollar;  the
functional  currency of First South African  Holdings,  Ltd. (FSAH) is the South
African Rand.  Accordingly,  the following  rates of exchange have been used for
translation purposes:

Assets and  liabilities are translated into United States Dollars using exchange
rates at the balance sheet date. Common stock and additional paid-in capital are
translated  into  United  States  Dollars  using  historical  rates  at  date of
issuance.  Revenue,  if any,  and  expenses are  translated  into United  States
Dollars using the weighted  average  exchange rates for each year. The resultant
translation  adjustments are reported in the statement of operations  since FSAH
has sold all its operating subsidiaries.

REVENUES
Revenues  generated  by Fantasy are  seasonal  from  mid-February  to the end of
November.  Fantasy  collects its revenue at the  beginning  and mid-point of the
season and recognizes  this deferred  revenue pro rata over the season.  Student
Sports recognized  subscription  revenue over the life of the subscription.  For
event-type  revenue,  revenue was recognized  over the course of the contract in
proportion to the


                                      F-9
<PAGE>

expenses for the period compared to total expenses  anticipated for the specific
event.  Revenues from  television  sports shows  produced by Student  Sports for
television  stations were  recognized  when the show aired.  Student  Sports was
somewhat  less  affected by seasonal  factors,  generated  less  revenues in the
December quarter than during the rest of the year.  Revenues from Student Sports
is presented in Discontinued Operations.

ADVERTISING COSTS
Advertising  costs are  expensed as  incurred.  Advertising  costs  incurred for
continuing  operations  for the years  ended June 30,  2003,  2002 and 2001 were
$267,857,  $426,558 and $591,894,  respectively.  Advertising costs incurred for
discontinued operations during the years ended June 30, 2003, 2002 and 2001 were
$7,015, $25,869 and $0.

INCOME TAXES
The Company  accounts for its income taxes using SFAS No. 109,  "Accounting  for
Income Taxes",  which requires the  recognition of deferred tax  liabilities and
assets for expected future tax consequences of events that have been included in
the  financial  statements  or tax  returns.  Under this  method,  deferred  tax
liabilities  and assets  are  determined  based on the  difference  between  the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect for the year in which the differences are expected to reverse.

STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS No. 123"),  encourages  but does not require  companies to
record  stock-based  compensation  plans  using a fair value based  method.  The
Company has chosen to continue to account for stock-based compensation using the
intrinsic value based method  prescribed in Accounting  Principles Board Opinion
No. 25,  "Accounting for Stock Issued to Employees."  Accordingly,  compensation
cost for stock  options is measured as the excess,  if any, of the quoted market
price of the Company's  common stock at the date of the grant over the amount an
employee must pay to acquire the stock.

If the  Company  used the fair  value-based  method  of  accounting  to  measure
compensation expense for options granted at grant date as prescribed by SFAS No.
123, income/ (loss) per share from continuing operations would have been reduced
to the proforma amounts indicated below.

<TABLE>
<CAPTION>
                                                               2003            2002            2001
                                                         -------------     -----------     -----------
<S>                                                      <C>               <C>             <C>
      Income (loss) continuing operations as reported    $   1,069,049     $(2,964,039)    $(5,010,726)
      Less: Compensation expense for options
           Awards determined by the fair-value-based
           Method                                              (15,472)       (868,002)       (838,648)
                                                         -------------     -----------     -----------
      Proforma net income/(loss) from continuing
      Operations                                         $   1,053,577     $(3,832,041)    $(5,849,374)
                                                         =============     ===========     ===========

      Basic:
           As reported                                           $0.12          $(0.39)         $(0.57)
           Pro forma                                             $0.12           (0.48)          (0.66)

      Assuming Full dilution:
           As reported                                           $0.10             N/A             N/A
           Pro forma                                             $0.10             N/A             N/A
</TABLE>


                                      F-10
<PAGE>


The weighted  average grant date fair value of options granted in 2003, 2002 and
2001 and the  significant  assumptions  used in determining  the underlying fair
value of each option grant on the date of the grant  utilizing the Black Scholes
option pricing model were as follows:


                                                   2003        2002        2001
      Weighted average grant-date fair value of
         options granted                           $0.14       $0.48      $0.54
      Assumptions:
         Risk free interest rate                   3.14%    3.99 to 4.4    4.96%
         Expected life                            5 Years     5 Years    5 Years
         Expected volatility                        127%        96%         88%
         Expected dividend yield                    0.0%        0.0%        0.0%


NET  LOSS PER SHARE
Basic  net loss per  share is  computed  by  dividing  net loss by the  weighted
average  number  of common  shares  outstanding.  Diluted  net loss per share is
computed by dividing net loss by the weighted  average  number of common  shares
outstanding  and dilutive  potential  common shares which  includes the dilutive
effect of stock  options,  warrants,  convertible  debentures  and  shares to be
issued in  connection  with the  acquisition  of  Student  Sports  (see Note 3).
Dilutive  potential  common  shares  for  all  periods  presented  are  computed
utilizing the treasury stock method.  The dilutive effect of shares to be issued
in  connection  with the  acquisition  of Student  Sports is computed  using the
average market price for the quarter. The diluted share base for the years ended
June 30, 2002, and 2001, excludes shares of 1,737,910,and 261,092, respectively.
These shares are excluded due to their  anti-dilutive  effect as a result of the
Company's loss from continuing operations during 2002 and 2001.

RECENTLY ISSUED ACCOUNTING STANDARDS


In June 2001, the FASB issued SFAS 141, "Business  Combinations," which requires
all business  combinations  initiated  after June 30, 2001 to be  accounted  for
under the purchase method.  SFAS 141 also sets forth guidelines for applying the
purchase  method  of  accounting  in the  determination  of  intangible  assets,
including  goodwill  acquired in a business  combination,  and expands financial
disclosures  concerning business  combinations  consummated after June 30, 2001.
The  application  of SFAS 141 did not  affect  any of the  Company's  previously
reported amounts included in goodwill or other intangible assets.

Effective  July 1, 2001,  the  Company  adopted  SFAS 142,  "Goodwill  and Other
Intangible Assets," which establishes new accounting and reporting  requirements
for  goodwill  and  other  intangible  assets.  Under  SFAS  142,  all  goodwill
amortization  ceased  effective July 1, 2001 (goodwill  amortization  for fiscal
2002 otherwise would have been $821,098) and recorded  goodwill  attributable to
Fantasy Sports, Inc. was tested for impairment. This impairment test is required
to be performed at adoption of SFAS 142 and at least annually thereafter.  On an
ongoing basis (absent any impairment indicators), the Company expects to perform
this  impairment  test during the fourth  quarter for  Fantasy  Sports.  For the
acquisition of Student  Sports,  Inc. and any subsequent  acquisitions  that are
considered reporting units under SFAS 142, the impairment test will be performed
on the one year anniversary of the acquisition and in that period thereafter.

Based on the initial  impairment  test on July 1, 2001, it was  determined  that
none of the goodwill recorded was impaired.  Impairment  adjustments  recognized
after  adoption,  if any,  generally  are required to be recognized as operating
expenses.  The  Company  performed  the  impairment  test on goodwill of Fantasy
Sports  as of June  30,  2003  and 2002 and  determined  that  goodwill  was not
impaired.



                                      F-11
<PAGE>


In connection with adopting SFAS 142, the useful lives and the classification of
identifiable  intangible  assets was reassessed and it was determined  that they
continue to be appropriate.  For the components of amortized  intangible  assets
and pro forma  results of  operations  for fiscal 2001 and 2000 giving effect to
the adoption of SFAS 142, see Note 9.

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  (SFAS)  No.  143,  "Accounting  for  Asset
Retirement Obligations".  SFAS 143 requires entities to record the fair value of
a  liability  for an asset  retirement  obligation  in the period in which it is
incurred.  The  statement  requires  that the amount  recorded as a liability be
capitalized by increasing the carrying amount of the related  long-lived  asset.
Subsequent  to initial  measurement,  the  liability is accreted to the ultimate
amount  anticipated to be paid, and is also adjusted for revisions to the timing
or amount of estimated cash flows.  The capitalized cost is depreciated over the
useful life of the related asset.  Upon  settlement of the liability,  an entity
either settles the  obligation for its recorded  amount or incurs a gain or loss
upon  settlement.  SFAS  143  will  be  effective  for the  Company's  financial
statements  beginning July 1, 2002,  with earlier  application  encouraged.  The
Company believes that the adoption of this statement will not have a significant
impact on the results of operations or financial position of the Company.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived  Assets." This statement provides a single  comprehensive
accounting   model  for  impairment  of  long-lived   assets  and   discontinued
operations.  SFAS 144 will become effective in the first quarter of fiscal 2003.
The Company believes that adoption of this statement will not have a significant
impact on the results of operations or financial position of the Company.

In May 2002, the FASB issued SFAS No. 145,  "Rescission of FASB  Statements Nos.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical  Corrections as
of April 2002."  Adoption of the  standard is  generally  required in the fiscal
year beginning after May 15, 2002, with certain  provisions  becoming  effective
for financial  statements  issued on or after May 15, 2002.  Under the standard,
transactions  currently classified by the Company as extraordinary items will no
longer be treated as such but instead  will be  reported as other  non-operating
income  or  expenses.  The  Company  adopted  SFAS  145 on July 1,  2002 and the
adoption of SFAS 145 did not have a material  impact on the Company's  financial
position or results of operations.

In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with
Exit or Disposal  Activities." This statement addresses financial accounting and
reporting for costs associated with exit or disposal  activities.  SFAS 146 will
become  effective in the third quarter of fiscal 2003. The Company believes that
the adoption of this statement will not have a significant impact on the results
of operations or financial position of the Company.

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting  and  Disclose   Requirements  for  Guarantees,   Including  Indirect
Guarantees of  Indebtedness  of Others." FIN 45 elaborates on the disclosures to
be made by a guarantor in its interim and annual financial  statements about its
obligations  under certain  guarantees it has issued.  The  Interpretation  also
clarifies  that a guarantor  is required to  recognize,  at the  inception  of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing the guarantee.  FIN 45 is effective for interim or annual periods ending
after  December 15, 2002.  The adoption of FIN 45 had no material  effect on the
financial statements.



                                      F-12
<PAGE>

On December 31, 2002, the FASB issued SFAS No. 148,  Accounting for  Stock-Based
Compensation  -  Transition  and  Disclosure  - An  Amendment  of SFAS 123.  The
standard  provides  additional  transition  guidance for companies that elect to
voluntarily  adopt  the  accounting  provisions  of  SFAS  123,  Accounting  for
Stock-Based  Compensation.  SFAS 148 does not change the  provisions of SFAS 123
that permits entities to continue to apply the intrinsic value method of APB 25,
Accounting for Stock Issued to Employees.  As Advanced Viral continues to follow
APB 25, its accounting for stock-based  compensation will not change as a result
of SFAS 148. SFAS 148 does require  certain new  disclosures  in both annual and
interim  financial  statements.  The required  annual  disclosures are effective
immediately  and have been  included  in the  Company's  consolidated  financial
statements. The new interim disclosure provisions will be effective in the first
quarter of fiscal 2004.

During April 2003, the FASB issued Statement of Financial  Accounting  Standards
No. 149 ("SFAS 149"),  "Amendment of Statement 133 on Derivative Instruments and
Hedging  Activities".  SFAS 149 amends and clarifies  accounting  for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities under Statement 133. SFAS 149 is effective
for  contracts  entering  into or  modified  after June 30, 2003 and for hedging
relationships  designated  after June 30, 2003.  The guidance  should be applied
prospectively.  The  adoption  of SFAS  149 will  not  have  any  impact  on our
operating  results  or  financial  position  as we do not  have  any  derivative
instruments that are affected by SFAS 149 at this time.

During May 2003, the FASB issued Statement of Financial Accounting Standards No.
150 ("SFAS 150"),  "Accounting for Certain  Instruments with  Characteristics of
both  Liabilities  and Equity".  SFAS 150 clarifies the  accounting  for certain
financial  instruments with  characteristics  of both liabilities and equity and
requires that those  instruments  be classified as  liabilities in statements of
financial  position.  Previously,  many  of  those  financial  instruments  were
classified as equity.  SFAS 150 is effective for financial  instruments  entered
into or modified  after May 31, 2003 and otherwise is effective at the beginning
of the first interim period  beginning after June 15, 2003. The adoption of SFAS
150 is not  expected  to have an impact on our  operating  results or  financial
position.

NOTE 3.  ACQUISITIONS

On  September  24,  2001,  the Company  acquired all the assets and business and
assumed  certain  liabilities  of  Student  Sports,  a media  company  producing
publications, television programs and various marketing initiatives for the high
school  sports  market.  Under the terms of the  agreement,  the Company  issued
900,000 Company common shares to the owners of Student Sports,  and undertook to
provide a further payment,  as defined,  of between 500,000 and 1,500,000 shares
of Company  common  stock on March 31,  2004.  On June 10, 2003 the Company sold
substantially all assets and liabilities of Student Sports, Inc. (See Note 13).

On  November  17,  2000,  the  Company  acquired  all of the assets and  certain
liabilities of Fantasy Sports ("Fantasy").  Fantasy operates the fantasycup.com,
fantasycup.org, fantasycup.net, fantasystockcar.com and fantasynhra.com websites
and specializes in subscription based NASCAR, college football and other fantasy
sports  games,  as well as the sale of die-cast  racing  cars.  The costs of the
acquisition  were  allocated  on the basis of the  estimated  fair  value of the
assets acquired and liabilities assumed as required under purchase accounting.

In connection with the acquisition of Fantasy,  the Company recorded intangibles
consisting  of  goodwill  and  customer  lists.  The  customer  lists  are being
amortized on a straight-line  basis over their expected useful lives of three to
ten years.

The  following  unaudited  pro forma  summary  presents  consolidated  financial
information  as if the  acquisition  of Fantasy had occurred  effective  July 1,
2000. The pro forma amounts include adjustments for amortization of intangibles.
The pro forma  information does not necessarily  reflect the actual results that
would  have  occurred  nor is it  necessarily  indicative  of future  results of
operations of the consolidated entities.


                                      F-13
<PAGE>


<TABLE>
<CAPTION>
                                                                                      Year ended
                                                                                    June 30, 2001
                                                                                     -----------
<S>                                                                                  <C>
         Revenue                                                                     $ 2,231,026
                                                                                     ===========
         Loss before extraordinary item                                              $(8,472,074)
         Extraordinary item - gain on extinguishment of debt                           2,142,949
                                                                                     -----------
            Net loss                                                                 $(6,329,125)
                                                                                     ===========

         Loss per share - basic and diluted:
            Loss before extraordinary item                                                $(0.96)
            Extraordinary item                                                              0.24
                                                                                     -----------
            Net loss                                                                      $(0.72)
                                                                                     ===========
</TABLE>


In  October  2001,  the  Company  received  $200,000  in cash and  approximately
$305,000  reduction in accounts payable  primarily related to the acquisition of
Fantasy Sports from the Seller. The cash amount,  which had been held in escrow,
relates  to  settlement  of a dispute  related  to the  acquisition  of  Fantasy
regarding certain  disclosures made by Action at the time of acquisition and has
been used to  reduce  goodwill.  Of the  $305,000,  $130,000  was used to reduce
inventory  to fair value and the  remaining  $175,000  relating to the  purchase
price was recorded as a reduction to goodwill.

NOTE 4.  ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
                                                                                           2003             2002
                                                                                         -------       -----------
<S>                                                                                      <C>           <C>
        Accounts receivable                                                              $17,816       $    25,594
        Less allowance for doubtful accounts                                                   -                 -
                                                                                         -------       -----------
                                                                                         $17,816       $    25,594
                                                                                         =======       ===========
</TABLE>

NOTE 5.  INVENTORIES

Inventories  consist of finished goods of $168,113 and $121,630 at June 30, 2003
and 2002,  respectively.  During fiscal 2002,  inventory  values were reduced by
approximately  $130,000 due to a settlement with the seller of Fantasy (see Note
3) and by a bulk sale of inventory of approximately $150,000.

NOTE 6.  PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                          2003              2002
                                                                                        --------          --------
<S>                                                                                    <C>               <C>
        Leasehold improvements                                                         $  24,736         $  15,853
        Plant and equipment                                                              336,229           262,327
        Motor vehicles                                                                    34,912                 -
                                                                                        --------          --------
                                                                                         395,877           278,180
        Less accumulated depreciation                                                    255,576           165,118
                                                                                        --------          --------
                                                                                        $140,301          $113,062
                                                                                        ========          ========
</TABLE>

Depreciation expense was $94,680, $91,657, and $67,955, for the years ended June
30, 2003, 2002, and 2001,  respectively.  Of this depreciation  expense,$26,252,
$15,525, and $0, respectively, was included in discontinued operations.


                                      F-14
<PAGE>


NOTE 7.   INVESTMENTS IN NON-MARKETABLE SECURITIES

A  summary  of the  investments  in  affiliates  on the  consolidated  financial
statements is presented below:

<TABLE>
<CAPTION>
                                                     Effective         As of and for the Year
                                                     Percentage                Ended
                                                     Ownership      June 30, 2003  June 30, 2002
                                                     ----------     -------------  -------------
<S>                                                  <C>            <C>            <C>
           Investments In and Receivables From
              Unconsolidated Affiliates:
                 Magnolia Broadband                  13 and 48          831,066       831,066
                 Other                                                   12,500        12,500
                                                                       --------      --------
                                                                       $843,566      $843,566
                                                                       ========      ========
           Share of losses of
           unconsolidated affiliates:
              Magnolia Broadband                     13 and 48
                                                                              -
                                                                       --------      --------
                                                                       $      -      $      -
                                                                       ========      ========
</TABLE>


MAGNOLIA BROADBAND, INC.
On April 14, 2000, the Company purchased  3,447,774 shares of Series A Preferred
stock in Magnolia Broadband ("Magnolia"),  with voting rights representing a 48%
interest in Magnolia, for a consideration of $2,500,000, $1,300,000 of which was
recorded as  goodwill.  The goodwill  relating to the  Company's  investment  in
Magnolia was being amortized over a three-year  period.  Effective July 1, 2001,
the Company adopted SFAS 142 (see Note 2) at which time the unamortized  balance
was $831,066.  Such goodwill is no longer being  amortized and at June 30, 2002,
such goodwill was not considered impaired.

On March 9, 2001, the Company loaned Magnolia $250,000. This loan is convertible
into the type of equity security  Magnolia sells in its next private  placement.
In connection with this loan,  Magnolia  issued the Company  warrants to acquire
250,000  shares of  Magnolia's  common  stock at an exercise  price of $1.00 per
share.  The warrants  expire on March 9, 2006.  The value of the warrants at the
date of issuance was not considered  significant.  At June 30, 2001, the Company
provided a full valuation allowance relating this $250,000 loan.

In October 2001, the Company loaned  Magnolia  $200,000,  which was  convertible
into newly  reclassified  Series A Preferred Stock. As part of the consideration
for the Notes, the Company will exchange its existing  convertible notes for new
Series A Preferred shares.  This note and the above note were converted into new
Series A Preferred Stock in March 2002 (see below).

On March 21,  2002,  Magnolia  entered  into an  agreement  whereby it raised $6
million  from  three  institutional  investors.  The  agreement  called  for  an
immediate infusion of $3 million,  with an additional $3 million committed,  but
contingent on Magnolia  reaching defined  technical  milestones.  As a result of
this  agreement,  the Company  exchanged its existing shares in Magnolia for new
Series A Preferred shares and has converted the October 2001 loan into these new
Series A  Preferred  shares as well.  The  Company's  ownership  percentage  was
reduced to  approximately  13% and further  reduced  when the second  tranche of
financing was realized.  In July 2003,  Magnolia closed on a $6 million Series C
financing  round,  half of which was  funded  on  closing  with the  other  half
dependant on the achievement of certain technical milestones. On a fully diluted
basis, the Company's  percentage in Magnolia will be reduced to approximately 5%
should  Magnolia  receive full funding,  as well as the exercise of  outstanding
Magnolia  employee  stock  options.  Effective  at the time  that the  Company's
ownership percentage was reduced below 20%, the Company was accounting for their
investment in Magnolia  under the cost method.  While Magnolia is confident that
it can meet the defined technical  milestones to obtain the additional  funding,
there is no assurance that this will occur.  Furthermore,  there is no assurance
that the


                                      F-15
<PAGE>

full amount will be sufficient for Magnolia to fund its future  operations until
it achieves revenues and profitability.

NOTE 8.  LONG-TERM NOTES RECEIVABLE

In connection with the sale of Lifestyle,  which was completed in November 2000,
as well as the earlier sale of two other  subsidiaries,  the Company received as
partial consideration three notes denominated in South African Rand. These notes
are subject to foreign  currency risk and a portion of one is subject to certain
performance  requirements  of the obligee.  Two notes require  monthly  payments
ranging from R50,000 to R189,000  through June 30, 2004.  The third note was for
R52 million of which R20 million  (plus  accrued  interest of $862,083) has been
treated as contingent consideration to be recorded when collected. The remaining
R32  million is payable to the extent  the  borrower  collects  on junior  debt.
Collections of junior debt will be first charged  against  accrued  interest and
the excess applied to the receivable balance not to exceed tranches of R500,000.
Management does not expect to begin receiving  payments on these notes until the
third  quarter of fiscal 2004.  These notes bear  interest at rates based on the
lower of the South African Bankers  Acceptance rate or 12% (at June 30, 2003 the
rate was 12.0%).  Notes  receivable  include accrued  interest of  approximately
$1,381,726.

<TABLE>
<CAPTION>
                                                                                               June 30,
                                                                                        2003               2002
                                                                                     ----------         ----------
<S>                                                                                  <C>                <C>
          Balance                                                                    $6,461,891         $4,269,109
          Less current portion                                                          248,205            409,971
                                                                                     ----------         ----------
          Long-term portion                                                          $6,213,686         $3,859,138
                                                                                     ==========         ==========
</TABLE>

NOTE 9.  INTANGIBLE ASSETS

The components of amortized intangible assets as OF JUNE 30, 2003 AND 2002 is as
follows:

<TABLE>
<CAPTION>
                                                                                    Gross Carrying      Accumulated
                                                                                        Amount          Amortization
<S>                                                                                    <C>               <C>
        Balance at June 30, 2003:
        Customer lists                                                                  $215,000          $184,250
                                                                                        ========          ========

        Balance at June 30, 2002
        Customer lists                                                                  $215,000          $117,250
                                                                                        ========          ========
</TABLE>

Amortization  expense for intangible assets was $112,938  $106,375,  and $0, for
the  years  ended  June  30,  2003,  2002,  and  2001,  respectively.   Of  this
amortization expense,  $45,938,  $15,525, and $0, respectively,  was included in
discontinued operations.

 Estimated  amortization  expense  for the five  succeeding  fiscal  years is as
follows:

             2004                                            $18,750
             2005                                              2,000
             2006                                              2,000
             2007                                              2,000
             2008                                              2,000


SFAS 142 was adopted July 1, 2001 for fiscal 2002. The following table shows the
Company's fiscal 2003, 2002 and 2001 results,  adjusted to exclude  amortization
related to goodwill and equity method goodwill:


                                      F-16
<PAGE>

<TABLE>
<CAPTION>
                                                                            Year Ended June 30,
                                                                  2003             2002             2001
                                                               -----------    --------------     -------------
<S>                                                            <C>            <C>                <C>
      Income (Loss) before extraordinary items-as Reported     $    69,348    $   (3,788,800)    $  (7,400,109)
      Add back:                                                                            -                 -
         Goodwill amortization                                           -                 -           244,765
         Equity method goodwill amortization                             -                 -           433,326
         Goodwill amortization - discontinued operations                 -                 -            56,245
      Deduct:
         Increase in loss on disposition                                 -                 -                 -
                                                               -----------    --------------     -------------
      Income (Loss) before extraordinary items - as adjusted   $    69,348    $   (3,788,800)    $   6,665,773
                                                               ===========    ==============     =============

      Net income (loss) - as reported                          $    69,348    $   (3,788,800)    $  (5,257,160)

      Add back:
         Goodwill amortization                                           -                 -           244,765
         Equity method goodwill amortization                             -                 -           433,326
         Goodwill amortization - discontinued operations                 -                 -            56,245
      Deduct:
         Increase in loss on disposition                                 -                 -                 -
                                                               -----------    --------------     -------------
      Net loss - as adjusted                                   $    69,348    $   (3,788,800)    $  (4,522,824)
                                                               ===========    ==============     =============

      Income (Loss) per share - basic and diluted:
      Inc.(Loss) before extraordinary items - as reported      $      0.01    $        (0.43)    $       (0.84)
      Add back:
         Goodwill amortization                                           -                 -              0.03
         Equity method goodwill amortization                             -                 -              0.05
         Goodwill amortization - discontinued operations                 -                 -              0.01
      Deduct:
         Increase in loss on disposition                                 -                 -                 -
                                                               -----------    --------------     -------------
      Inc(Loss)before extra ordinary items- as adjusted        $       .01    $        (0.43)    $       (0.75)
                                                               ===========    ==============     =============

      Net Income( loss) - as reported                          $       .01    $        (0.43)    $       (0.60)
      Add back:
         Goodwill amortization                                           -                 -              0.03
         Equity method goodwill amortization                             -                 -              0.05
         Goodwill amortization - discontinued operations                 -                 -              0.01
      Deduct:
         Increase in loss on dispositions                                -                 -                 -
                                                               -----------    --------------     -------------
      Net  income (loss) - as adjusted                         $       .01    $        (0.43)    $       (0.51)
                                                               ===========    ==============     =============
</TABLE>


                                      F-17
<PAGE>

The changes in goodwill balance during fiscal 2002 are as follows:

<TABLE>
<CAPTION>
                                                                                     Internet
                                                                                      Fantasy
                                                                       Marketing      Sports
                                                                       Services        Games           Total
                                                                       --------      ----------     -----------
<S>                                                                    <C>           <C>            <C>
      Balance at June 30, 2002, net                                    $      -      $3,323,049     $ 3,323,049
      Additions to goodwill:
           Acquisition of Student Sports, Inc.                          336,038               -         336,038
           Acquisition of Area Code Baseball                            100,000               -         100,000
      Reductions in goodwill:
          Student Sports reported as Discontinued Operations           (336,038)              -        (336,038)
          Area Code Baseball reported as Discontinued Operations       (100,000)              -        (100,000)
           Settlement of purchase price issues
               Related to Fantasy Sports (see Note 3)                                  (375,225)       (375,225)
                                                                       --------      ----------     -----------
      Balance at June 30, 2003                                         $             $2,947,824     $ 2,947,824
                                                                       ========      ==========     ===========
</TABLE>


NOTE 10. ACCRUED LIABILITIES

<TABLE>
<CAPTION>
                                                                                                    June 30,
                                                                                             2003               2002
                                                                                           --------          ---------
<S>                                                                                        <C>                <C>
Accrued prize winner cash and merchandise awards                                           $195,498           $185,337
Payroll and related payroll expenses                                                         52,220             85,830
Other                                                                                       167,681             70,364
                                                                                           --------          ---------
                                                                                           $415,399          $,341,531
                                                                                           ========          =========
</TABLE>

NOTE 11. DEBT

LINES OF CREDIT
In June 2002,  Fantasy  Sports  obtained a secured  line of credit  facility for
borrowings up to $1.0 million, which is fully secured against cash balances held
in the  Company's  account.  This  facility is due on demand and has an interest
rate of 3.0%.  The  balance  outstanding  under  this line of credit at June 30,
2003 was $168,151.

The  company  has a secured  line of  credit  utilized  by  Fantasy  Sports  for
borrowings up to $50,000, which is fully secured by inventory currently owned or
hereafter  acquired.  This  facility is payable on demand and bears  interest at
prime plus 1/2 %. The balance  outstanding under this line of credit at June 30,
2003 was $50,000.

LONG TERM DEBT

<TABLE>
<CAPTION>
                                                                                         2003         2002
                                                                                       -------       ------
<S>                                                                                 <C>              <C>
        Vehicle loans                                                               $   21,598            -
        Capital lease obligations                                                       38,523            -
                                                                                       -------       ------
                                                                                        60,121            -
        Less current portion                                                            26,237            -
                                                                                       -------       ------
        Long-term debt, net                                                            $33,884       $    -
                                                                                       =======       ======
</TABLE>

Scheduled  debt  maturities for the next five fiscal years are $26,237 in fiscal
2004, $23,251 in fiscal 2005, $5,983 in fiscal 2006 and $4,650 in fiscal 2007.

INCREASING RATE SUBORDINATED CONVERTIBLE DEBENTURES
15,000 increasing rate subordinated  convertible  debentures of $1,000 each were
issued on October 31, 1997.  These  debentures bore interest at 5% per annum for
the year ending October 31, 2001.



                                      F-18
<PAGE>

The debentures  were  convertible  into shares of common stock, at the option of
the  debenture  holder,  at any time prior to  maturity  at a price of $9.50 per
share.  The debentures may be redeemed at the option of the Company from October
31, 1998, if the Company's common stock trades at more than $14.25 per share for
30 consecutive  market days.  Should the debentures not be converted into shares
of common stock prior to October 31, 2001,  the maturity  date,  the  redemption
value of the debentures will be 122.5% of the principal amount.

During fiscal 2000, 3,000 increasing rate subordinated convertible debentures of
$1,000 each were  converted  to shares of common  stock at $9.50 per share.  The
unamortized  debt issue costs  related to these  debentures  was offset  against
additional paid-in capital. There were no debentures converted into common stock
in fiscal 2001.

Debt issue costs of $669,294  relating to these  debentures were being amortized
over the term of the debenture  issue. The charge to interest expense for fiscal
year 2002 was  immaterial.  The charge to interest  expense for fiscal year 2001
was $107,310.

As of June 30, 2001, the Company had redeemed all but $300,000 of the increasing
rate convertible  debentures (see below). The remaining debentures were redeemed
at maturity in October 2001

DEBENTURE REDEMPTION RESERVE FUND
Under the terms of the increasing rate subordinated  convertible  debentures,  a
redemption  reserve  fund was created to accrue for the premium  required on the
redemption of those  debentures on October 31, 2001.  This debenture  redemption
reserve fund was created on the straight-line basis over the remaining period of
the debenture  tenure.  The charge to interest  expense for fiscal year 2002 and
2001 for the debenture redemption reserve was $4,248 and $275,107, respectively.

In connection with redemption of the increasing  rate  subordinated  convertible
debentures  in fiscal 2001,  the Company  recognized  an  extraordinary  gain of
$2,142,949  (net of  $119,323  debenture  issuance  costs and $24,000 of accrued
interest  write-off) of previously  accrued amounts in the debenture  redemption
reserve fund (see Note 14). The balance of the debenture redemption reserve fund
at June 30, 2001 was $61,836. This was paid at maturity in October 2001.

NOTE 12. INCOME TAXES

The components of the Company's provision for income taxes were as follows:

<TABLE>
<CAPTION>
                                                                                      2003       2002      2001
                                                                                   --------     -----      -----
<S>                                                                               <C>         <C>         <C>
          Current:
             Federal                                                              $       -    $    -     $    -
             State                                                                        -         -          -
                                                                                   --------     -----      -----
                                                                                          -         -          -
                                                                                   --------     -----      -----
          Deferred:
             Federal                                                                      -         -          -
             State                                                                        -         -          -
                                                                                   --------     -----      -----
                                                                                          -         -          -
                                                                                   --------     -----      -----
                                                                                   $      -     $   -      $   -
                                                                                   ========     =====      =====
</TABLE>


                                      F-19
<PAGE>

A reconciliation  of income tax computed at the statutory federal rate to income
tax expense (benefit) is as follows:

<TABLE>
<CAPTION>
                                                           2003             2002           2001
                                                       -----------     -----------     -----------
<S>                                                    <C>             <C>             <C>
      Tax benefit at the statutory rate of 34%         $    23,578     $(1,288,192)    $(1,703,647)
      Tax effect on income (loss) of non-US
         Operations                                       (120,201)        612,297       1,031,590
      State income taxes, net of federal income tax         (8,526)        (59,638)        (59,299)
      Travel and entertainment                               7,407           4,376           2,276
      Valuation allowance                                   97,742         731,157         729,080
                                                       -----------     -----------     -----------
                                                       $         -     $         -     $         -
                                                       ===========     ===========     ===========
</TABLE>

At  June  30,  2003,  the  Company  has  available  a U.S.  net  operating  loss
carryforward of approximately $2,714,000 which expires through 2023.

In addition to the net operating loss carryforward, the Company had deferred tax
assets which relate primarily to amortization of goodwill  recorded at different
rates for tax and book  purposes,  deferred  revenue  that is deferred  for book
purposes but is recognized  when  received for tax  purposes,  and accrued prize
winnings  which is accrued for book  purposes but  deductible  when paid for tax
purposes.  As of June  30,  2003  and  2002,  a  valuation  allowance  has  been
established against the deferred tax asset since the Company believes it is more
likely than not that the amounts will not be realized.

The components of the deferred tax assets  (liabilities) were as follows at June
30, 2003 and 2002:

<TABLE>
<CAPTION>
           Current:                                                       2003                  2002
                                                                      ----------            ----------
<S>                                                                   <C>                   <C>
              Net operating loss                                      $1,265,986            $1,034,750
              Accrued prize winnings                                      66,377                61,434
              Accrued pit points                                           5,920                 7,104
              Deferred revenue                                           309,360               377,429
                                                                      ----------            ----------
                                                                       1,647,643             1,480,717
                                                                      ----------            ----------
           Long-term:
              Amortization of goodwill                                  (111,032)              (31,191)
              Depreciation                                                21,368                10,713
                                                                      ----------            ----------
                                                                         (89,664)              (20,478)
                                                                      ----------            ----------
                                                                       1,557,979             1,460,239
           Total valuation allowance                                  (1,557,979)           (1,460,239)
                                                                      ----------            ----------
           Deferred tax asset                                         $        -            $        -
                                                                      ==========            ==========
</TABLE>


The Silverstar Holdings Limited is a Bermuda registered  corporation where there
are no income tax laws applicable.

FSAH, a South African registered corporation,  incurred no income tax charges in
fiscal year 2003 and 2002.

First South Africa  Management  Corp.  Fantasy Sports,  Inc. and Student Sports,
Inc.,  are  U.S.  registered  corporations  and did not  incur  any  income  tax
provision for 2003, 2002 and 2001.


                                      F-20
<PAGE>

NOTE 13. DISCONTINUED OPERATIONS

STUDENT SPORTS, INC.
On June 10, 2003 the Company sold  substantially  all the assets and liabilities
as of May 15, 2003 of Student Sports,  a media company  producing  publications,
television programs and various marketing initiatives for the high school sports
market.  The  consideration for the sale of Student Sports was 325,686 shares of
Silverstar  Holdings  common stock that were  returned to the Company as well as
the forgiveness of a maximum of 913,745 contingent shares of Silverstar Holdings
that could have been  payable to former  Student  Sports  shareholders  in April
2004.

In accordance with accounting principles generally accepted in the United States
of America, the operating results and net assets related to Student Sports, Inc.
have been included in  discontinued  operations  in the  company's  consolidated
statements of operations and consolidated balance sheets.

The following  summarizes the operating results of Student Sports,  discontinued
operations:

<TABLE>
<CAPTION>
                                                                     Eleven Months     Nine Months
                                                                         Ended            Ended
                                                                        May 15,          June 30,
                                                                         2003             2002
                                                                      ----------       ----------
<S>                                                                   <C>              <C>
             Revenue                                                  $1,285,065       $1,121,101
                                                                      ==========       ==========
             Operating loss                                           $( 736,947)      $( 824,761)
                                                                      ==========       ==========
             Loss on disposal                                         $ (262,754)      $        -
                                                                      ==========       ==========
</TABLE>



Net assets  related to Student Sports  discontinued  operations of $ 977,793 are
reported on the June 30, 2002 consolidated  balance sheet.  These assets consist
of the following:

<TABLE>
<CAPTION>
                                                                        June 30,
                                                                          2002
                                                                       ---------
<S>                                                                     <C>
            Cash                                                        $109,809
                                                                         241,814
           Receivables
            Prepaid assets                                                54,493
            Property Plant and equipment, net                            103,117
            Intangible assets, net                                     1,401,663
                                                                       ---------
                Total assets                                           1,910,896
                                                                       ---------

           Line of credit                                                $53,955
           Current portion of long-term debt                              22,682
           Accounts payable                                              134,042
           Accrued expenses                                               53,656
           Deferred revenue                                              141,397
           Long - term debt                                               35,776
           Obligation related to acquisition                             491,595
                                                                       ---------
               Total liabilities                                         933,103
                                                                       ---------
               Net assets                                              $ 977,793
                                                                       =========
</TABLE>


                                      F-21
<PAGE>


FIRST LIFESTYLE HOLDINGS LIMITED ("LIFESTYLE")
During 2000, the Company  changed its focus away from investing in South African
based industries. Although Lifestyle had performed well over the past few years,
it no longer fit the Company's investment strategy. On June 21, 2000 the Company
received an offer from  Lifestyle  management to buy Lifestyle from the Company.
The Company  accepted  the offer on September  26, 2000 at a general  meeting of
Lifestyle stockholders, which has been approved by the South African competition
authorities.

On August 14, 2000, the Company sold an effective 13.7% interest in Lifestyle to
the  existing  Lifestyle  management  as part  of the  plan  to  dispose  of the
Lifestyle  segment.  This sale was done on the same terms and  conditions as the
offer  made by  management  to the  remaining  stockholders  as  contained  in a
circular to Lifestyle stockholders dated September 4, 2000.

Regulatory approval was obtained from the South African Monopolies Commission on
October  12,  2000.  Proceeds  from the sale were  received on November 6, 2000.
Excluded  from  the  proceeds  below  are  R20  million  of a R52  million  note
(denominated in South African Rand) from Salwin Investments (Pty.) Ltd. (a South
African  company  formed for the  acquisition  of  Lifestyle).  The note accrues
interest and contains  provisions for the payment of interest and/or  principal,
based on the performance or sale of the Lifestyle assets (see Note 8).

The following  summarizes  the operating  results of the Lifestyle  discontinued
operations:

<TABLE>
<CAPTION>
                                                                  Four Months Ended
                                                                  October 31, 2001
                                                                     -----------
<S>                                                                  <C>
             Revenue                                                 $28,235,519
                                                                     ===========
             Operating income                                        $ 1,646,745
                                                                     ===========
             Net income, net of minority interest
                of $798,671 and $3,479,293                           $   823,373
                                                                     ===========
             Provision for loss on disposal                          $(2,389,383)
                                                                     ===========
</TABLE>


Lifestyle was sold  effective  November 6, 2000, the date that the proceeds from
the sale were made available to the Company.  Therefore,  the results  presented
above for the period ended June 30, 2001 are for a four-month period.

NOTE 14. EXTRAORDINARY ITEM

During  the  year  ended  June 30,  2001,  the  Company  purchased  and  retired
$11,700,000  face  value  of  the  increasing  rate   subordinated   convertible
debentures for face value plus accrued but not accreted interest. As a result of
these retirements, the Company recognized an extraordinary gain of $2,142,949 of
previously accrued but unpaid accreted interest (see Note 11).


                                      F-22
<PAGE>

NOTE 15.  CASH FLOWS

Changes in operating assets and liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                                      2003           2002            2001
                                                                                  -----------     -----------     -----------
<S>                                                                               <C>            <C>              <C>
      Increase in accounts receivable                                                   5,413         (25,594)              -
      Decrease (Increase) in inventories                                              (46,483)        256,091        (361,818)
      Increase in prepaid expenses and current assets                                 (20,010)         56,812        (569,714)
      Increase in overdraft                                                               567
      (Decrease) increase in accounts payable                                         222,480        (180,786)        340,073
      (Decrease) increase in accrued expenses                                          31,294        (115,533)       (352,269)
      Decrease in other taxes payable                                                       -               -               -
      Decrease in income taxes payable                                                      -               -               -
                                                                                  -----------     -----------     -----------
                                                                                  $   193,261     $    (9,010)    $  (943,728)
                                                                                  ===========     ===========     ===========

      Dividends paid is reconciled as follows:
        Movement in opening and closing balances                                  $         -     $         -     $  (179,840)
        Liability assumed upon disposition                                                  -               -         344,949
        Dividend charge                                                                     -               -        (165,109)
                                                                                  -----------     -----------     -----------
        Dividends paid                                                            $         -     $         -     $         -
                                                                                  ===========     ===========     ===========

      Net cash provided used in discontinued Operations
      consists of the following:
            Net loss of discontinued operations                                   $  (999,700)    $  (824,761)    $(2,389,383)
            Impairment of intangible assets                                           322,000               -               -
            Depreciation and amortization                                              72,190          54,900         950,388
            Bad debts expense                                                           3,700          16,429
            Minority share of (losses) gains                                                -         844,273
            Changes in operating accounts                                             113,481        (174,377)       (824,326)
             Loss on Disposal of Fixed Assets                                           6,502
            Acquisition of property plant and equipment                               (21,207)        (64,149)
            Short - term borrowings -net                                               96,045          53,955
            Repayment of long term debt                                               (14,812)         (7,013)
            Proceeds from equipment loans                                                              51,175
           Cash (included in)  from net assets  from                                                 (109,809)
           discontinued operations
            Interest in losses of affiliates                                                -                          13,579
            Net loss on sale of assets                                                174,801                -         21,278
            Movement in deferred income taxes                                               -                         294,018
            Shares to be issued                                                             -               -               -
                                                                                  -----------     -----------     -----------
                                                                                  ($  247,000)    ($1,003,650)    $(1,090,173)
                                                                                  -----------     -----------     -----------

      Non-cash investing and financing activities:
         Gain on extinguishment of accrued but unpaid
      accreted interest                                                           $         -     $         -     $ 2,142,949
                                                                                  ===========     ===========     ===========
         Retirement of treasury shares                                               $,25,135     $    62,037     $ 1,011,232
                                                                                  ===========     ===========     ===========
         Financing of vehicle purchase                                               $,22,800     $         -     $         -
                                                                                  ===========     ===========     ===========
</TABLE>

                                      F-23
<PAGE>

NOTE 16.  BUSINESS SEGMENT INFORMATION

During fiscal years 2003 and 2002 had two  reportable  segments,  which included
strategic  business units that offered  different  products and services.  These
business  units were managed  separately as Student  Sports  provided  marketing
services and Fantasy Sports provides  entertainment services .As the company has
changed it's focus,  the Company sold  Student  Sports and is being  reported as
discontinued operations.  As a result, as of June 30, 2003, the company operates
in only one segment, consisting of fantasy sports games.

NOTE 17. STOCK OPTION PLAN

The Board of Directors  has adopted the  Company's  1995 Stock Option Plan.  The
Stock  Option Plan  provides  for the grant of (i) options  that are intended to
qualify as  incentive  stock  options  ("Incentive  Stock  Options")  within the
meaning of Section 422 of the Internal  Revenue Code to key  employees  and (ii)
options  not so  intended  to  qualify  ("Nonqualified  Stock  Options")  to key
employees (including directors and officers who are employees of the Company and
to directors).

The Stock Option Plan is administered by the Compensation Committee of the Board
of Directors.  The committee shall determine the terms of the options exercised,
including the exercise price, the number of shares subject to the option and the
terms and conditions of exercise. No options granted under the Stock Option Plan
are  transferable  by the optionee other than by the will or the laws of descent
and distribution.

The exercise price of Incentive  Stock Options granted under the plan must be at
least  equal to the fair  market  value of such  shares on the date of the grant
(110% of fair market  value in the case of an optionee  who owns or is deemed to
own more than 10% of the voting rights of the  outstanding  capital stock of the
Company or any of its  subsidiaries).  The maximum term for each Incentive Stock
Option  granted is ten years (five years in the case of an optionee  who owns or
is deemed to own more than 10% of the voting rights of the  outstanding  capital
stock of the Company or any of its  subsidiaries).  Options shall be exercisable
at such times and in such  installments  as the  committee  shall provide in the
terms of each individual  option. The maximum number of shares for which options
may be granted to any individual in any fiscal year is 210,000.

The Stock Option Plan also  contains an automatic  option grant  program for the
employee and non-employee Directors.  Each person who is an employee director of
the Company  following an annual meeting of shareholders  will  automatically be
granted an option for an additional  5,000 shares of common stock;  non-employee
directors  will  receive an option  for an  additional  10,000  shares of common
stock. Each grant will have an exercise price per share equal to the fair market
value of the  common  stock on the grant date and will have a term of five years
measured from the grant date,  subject to earlier  termination  if an optionee's
service as a board member is terminated for cause.

The  Company,  through June 30, 2003,  has granted  options to purchase  921,666
shares  of common  stock  under the Plan,  of which  110,000  options  have been
exercised and 30,000 options expired unexercised.


                                      F-24
<PAGE>

The options issued under the plan still  outstanding  are reflected in the table
below.

<TABLE>
<CAPTION>
                                                                                      Shares            Weighted
                                                                                    Subject to          Average
                                                                                      Options        Exercise Price
                                                                                    Outstanding        Per Option
<S>                       <C> <C>                                                   <C>                  <C>
          Balance at June 30, 2000                                                  1,520,000            4.54

          Granted - non-plan options                                                  250,000             .75
          Granted - plan options                                                       45,000             .75
          Expired - non-plan options                                                  (71,669)           3.29
                                                                                    ---------
          Balance at June 30, 2001                                                  1,743,331            3.62


          Granted - non-plan options                                                   50,000            0.80
          Granted - plan options                                                       85,002            0.42
          Expired - plan options                                                      (65,000)           4.71
                                                                                    ---------
          Balance at June 30, 2002                                                  1,813,333            3.35

          Granted - plan options                                                       45,000            0.16
          Expired - plan options                                                      (30,000)           6.00
          Expired - non-plan options                                                  (40,000)           4.81
          Terminated - non-plan options                                               (80,000)           2.30
                                                                                    ---------
          Balance at June 30, 2003                                                  1,463,333            3.39
                                                                                    ---------
</TABLE>


Significant  option  groups  outstanding  at June 30, 2003 and related  weighted
average exercise price and weighted average remaining life are as follows:

                 Options Outstanding and Exercisable
           ------------------------------------------------
                                               Weighted
                 Range of                       Average
                 Exercise                      Exercise
                  Prices         Shares          Price

             Less than $1.00       130,000        $0.32
              $1.00 to $2.19       330,000         1.13
              $3.75 to $4.88       763,333         4.37
              $5.00 to $6.00       240,000         5.02

The  Company has also  issued  options to an employee to acquire  4.45 shares of
Fantasy common stock for $47,191 per share.  These options vest  immediately and
have a life of three years.  The fair value of this option  utilizing  the Black
Scholes option pricing model amounted to $6,451 per share.  The assumptions used
in this model were as follows:  risk-free  interest rate 4.96%;  expected life 3
years;  expected  volatility  0.0%; and expected  dividend  yield of 0.0%.  This
option has a remaining life of 0.3 years.

NOTE 18. WARRANTS OUTSTANDING

In consideration for the capital raising activities  undertaken during 2000, the
Company  issued  warrants  to  purchase  150,000  shares of  common  stock at an
exercise price of $0.01 per share.



                                      F-25
<PAGE>

In accordance with the terms of an agreement  entered into with  Infospace,  the
Company  undertook to issue  warrants over 720,000 shares of common stock valued
at $5.00 per share.  Infospace was to provide services to the  Leisureplanet.com
subsidiary   in   exchange   for  the   Company   increasing   its   holding  in
Leisureplanet.com equal to the value placed on the warrants. These warrants have
an  exercise  price of $0.01 per share.  As of June 30,  2000,  480,000 of these
warrants  have  vested  and  240,000  were  issued.   Since  the  operations  of
Leisureplanet.com  were closed and the  Infospace  services  ceased,  no further
options have been issued.

Also during  fiscal  2001,  Fantasy  issued  warrants to acquire  4.68 shares of
Fantasy  common  stock  with an  exercise  price  of  $47,191  per  share to TWI
Interactive, Inc, (see Note 21).

Warrants outstanding at June 30, 2002 were as follows:

<TABLE>
<CAPTION>
         SILVERSTAR HOLDINGS, LTD.
                                             Number of    Exercise      Expiration
                      Warrant                Warrants      Price           Date             Entitlement
                      -------                --------      -----           ----             -----------
<S>                                          <C>          <C>        <C>              <C>
         Debenture Warrants                  110,000      $6.00      July 31, 2007    One share of common stock

         Capital Raising Warrants            150,000      $6.00      July 31, 2007    One share of common stock

         Infospace Warrants                  240,000      $0.01      June 30, 2004    One share of common stock

<CAPTION>
         FANTASY SPORTS, INC.
                                            Number of    Exercise     Expiration
                      Warrant                Warrants     Price          Date                  Entitlement
                      -------                --------      -----           ----             -----------
<S>                                          <C>         <C>        <C>              <C>
         TWI Interactive, Inc.                 4.68      $47,191     June 1, 2005   One share of common stock
</TABLE>

NOTE 19. FANTASY ESCROW AGREEMENT

In November 2000, in connection  with the  acquisition  of Fantasy,  the Company
entered into an Escrow Agreement with the Seller. The Company deposited $250,000
with the escrow agent to secure various  obligations of the Seller on the terms,
and subject to the conditions, set forth in the Asset Purchase Agreement. Escrow
funds may be  released  from time to time  within  twelve  months  and after the
Company has given  written  notice of claim and such claim has been  approved by
the Seller. As of June 30, 2002,  $200,000 was repaid to the Company from escrow
funds.

NOTE 20. FIRST SOUTH AFRICAN HOLDINGS ESCROW AGREEMENT

The FSAH Escrow  Agreement  was executed  prior to the closing of the  Company's
offering and provided for the concurrent issuance and delivery of 729,979 shares
of Class B common stock to the FSAH escrow agent.  The FSAH Escrow  Agreement is
intended to provide  security for the holders of FSAH Class B common stock,  who
are  residents in South Africa and are  prohibited in terms of South African law
from holding shares in a foreign  company.  The FSAH Escrow  Agreement  provides
that the parties to this agreement that are holders of FSAH Class B common stock
will not sell such shares of stock, but may tender the shares to the FSAH escrow
agent against payment  therefore by the escrow agent,  which payment may consist
of the  proceeds  obtained  from the sale of an equal  number  of Class B common
stock of the Company,  provided  that the proceeds of the sale will be delivered


                                      F-26
<PAGE>

to the holder of the Class B common  stock in  exchange  for the shares in FSAH.
These  shares  will be  tendered  to the  Company  and they will be  immediately
converted to FSAH Class A common stock.

Since the  consummation  of the Company's  offering in January 1996, the Company
has entered into FSAC Escrow  Agreements  with the FSAH escrow  agent,  FSAH and
certain  principal  stockholders  of  the  Company's  subsidiaries,  which  were
acquired  since  January  1996.  The  terms of the  FSAC  Escrow  Agreement  are
substantially similar to the terms of the FSAH Escrow Agreement, except that the
FSAH Escrow  Agreement  provided for the issue of shares of Class B common stock
to the FSAH escrow agent while the FSAC Escrow Agreements  provide for the issue
of shares of common  stock to the FSAH  escrow  agent  which  correspond  to the
issuance of FSAH Class B common stock by FSAH.

Since 2000, no further  shares of common stock have been issued in terms of FSAC
or FSAH escrow agreements, nor will there be any further issuances.

NOTE 21. COMMITMENTS, CONTINGENCIES AND OTHER  MATTERS

PROFITABILITY AND LIQUIDITY
As reflected in the accompanying consolidated financial statements,  the Company
has incurred  significant  operating losses and experienced  negative  operating
cash flows in recent  years.  With a view towards  achieving  profitability  and
improving  liquidity,   management  has  adopted,  and  is  in  the  process  of
implementing, the following strategies:

         o        seek corporate  sponsorships  for the internet  fantasy sports
                  gaming segment to diversify its revenue streams while focusing
                  on its core motor sports niche;

         o        reduce  overhead of the operating  subsidiary  and continue to
                  look for areas in which further cost savings can be obtained.

         o        diversify  the price points and structure of its fantasy games
                  and add  additional  premium  content to attract new customers
                  and generate  additional revenues from the existing subscriber
                  base.

Management  believes that its present financial resources are sufficient to meet
its obligations for the ensuing twelve months.  In addition to unrestricted cash
of  approximately  $0.8 million at June 30, 2003,  the Company  expects to begin
collecting  on an  outstanding  note  receivable  due  from  the  sale of  First
Lifestyle Holdings in March 2004, which will provide additional  resources.  The
Company is also working to find an  alternative  guarantor  for the  approximate
$700,000  it has  guaranteed  for the  bank  lines  of a  former  South  African
subsidiary. Additionally, the Company believes it would be able to raise debt or
equity capital should the need arise.

Management  believes that the actions  presently being taken by the Company will
achieve profitability and improve liquidity.  However, there can be no assurance
that  management's  plans  will  be  successful  or  that  the  Company  will be
profitable in the future.

LEASES
The Company leases office facilities and various equipment under  non-cancelable
operating  leases expiring  through January 2006.  Office facility and equipment
rent  expense  included in  continuing  operations  for the years ended June 30,
2003,  2002  and  2001  was  approximately   $137,000,   $133,000  and  $88,000,
respectively.

                                      F-27
<PAGE>

Approximate  future  minimum  lease  payments  under  non-cancelable  office and
equipment lease agreements are as follows:

Year ending June 30:
      2004                      $ 85,103
      2005                        54,638
      2006                        33,403
      2007                        13,107
      2008                        13,107
      2009                         1,092
                                ========
                                $200,450
                                ========

LITIGATION First South Africa Holdings (FSAH), our South African subsidiary, has
received  notice of a claim  for  approximately  $250,000  from a holder of FSAH
Class B shares.  The claimant  contends a breach of their FSAH escrow  agreement
issued in  connection  with the sale of their  business in 1997. We believe this
claim is without  merit and FSAH will  vigorously  defend this  matter.  In July
2003,  FSAH settled  this matter by paying an amount of R150,000  (approximately
$20,000) in exchange for the receipt of 19,000 FSAH Class B Shares.

The Company, from time to time, is involved in various litigation arising in the
ordinary  course  of  business.   Based  on  currently  available   information,
management  believes  that the  resolution  of  pending  claims  will not have a
material  adverse  effect  on the  Companies'  operating  results  or  financial
position.

EMPLOYMENT AGREEMENTS

SILVERSTAR HOLDINGS LTD.
On April 12, 2000,  the  Company's  Board of  Directors  approved an Amended and
Restated  Employment  Agreement  (the  "Employment  Agreement")  with the  Chief
Executive Officer (CEO), who will serve as President and Chief Financial Officer
of the Company beginning as of February 1, 2000 and continuing through and until
January 31, 2005.  As  compensation  for his  services,  the CEO will receive an
annual base salary of $300,000 (with five percent  increases each year),  and an
annual  bonus of five  percent  of net  realized  capital  gains  upon the sale,
liquidation or distribution by the Company of any Portfolio  Company (as defined
in the Employment  Agreement).  A Portfolio  Company does not include any of the
South African entities currently owned by the Company.  In the event of a Change
in  Control  (as  defined  in the  Employment  Agreement),  the CEO may  also be
entitled to a payment of five percent of any net unrealized capital gains on any
Portfolio  Company,  which gains may, at the option of the  Company,  be paid in
cash, stock of the Portfolio Company or any combination of the foregoing.

On December 18,  2000,  the Company  entered into an agreement  with an employee
that  provides for a base salary,  250,000 stock options that vest over a period
of time and 10,000 shares of the Company's  common stock issued upon  acceptance
of  the  employment  agreement.  The  agreement  also  allows  the  employee  to
participate in a management  bonus pool. Such pool will be comprised of up to 5%
of realized  capital  gains from the Company's  investments  made after April 1,
2000. In September  2002,  this employee  contract was  terminated  with 125,000
stock  options  vested.  All other future  compensation  under the agreement was
cancelled at that time.

FANTASY SPORTS, INC.
On November 30, 2000, Fantasy entered into Employment Agreement (the "Employment
Agreement")  with an  individual  to serve as the  Chief  Executive  Officer  of
Fantasy  beginning  as of  November  30, 2000 and  continuing  through and until
November 30, 2003. As  compensation  for his  services,  the CEO will receive an
annual base salary. In addition, the CEO received a three-year option to acquire
5% of Fantasy's  outstanding shares as of November 16, 2000, at a price equal to
that paid by Silverstar  Holdings upon  acquisition of the assets of Fantasy.  A
similarly priced  performance-based  three-year option to acquire a further 2.5%
of the  outstanding  shares of Fantasy as of November 16, 2000 was issued to the


                                      F-28
<PAGE>

CEO. This performance-based option will vest on the earlier of Fantasy achieving
an  aggregate  EBITDA  of $4  million  for  calendar  years  2001 and 2002 or an
aggregate EBITDA of $9 million for calendar years 2001, 2002 and 2003.


GUARANTEES

In order to  facilitate  an  orderly  sale of one of its  former  South  African
subsidiaries,  in 1999 the Company  provided a guarantee for the bank facilities
of this subsidiary in South Africa.  At the time, this guarantee was provided on
an unsecured basis by our wholly owned subsidiary, First South African Holdings.
In November 2000,  upon the subsequent sale of the majority of our South African
assets and the  repatriation of the cash proceeds of this sale, we were required
to provide a bank guarantee to secure the  continuation of this credit facility.
As a result,  during  fiscal 2001 and 2002 we provided a bank  guarantee  in the
amount of R9 million ($US 900,000) to secure such  facility.  The bank guarantee
is in turn secured by the equivalent amount in US dollars.  In December 2002, we
negotiated  a  restructure  of this South  African  facility,  reducing the face
amount of our guarantee to R5.5 million ($US 730,000). Our former subsidiary, in
turn,  is reducing its bank line through the  repayment of R150,000 ($US 20,000)
per month in interest and  principal.  Our exposure as of June 30, 2003 has been
reduced to  approximately  R5.3 million ($US 700,000) and we anticipate it to be
reduced by approximately R100,000 ($13,000) per month over the next fiscal year.
At current  exchange  rates,  we have  approximately  $667,000  restricted  cash
securing  this  guarantee.  We are  comfortable  that  this  guarantee  will  be
significantly reduced over the next two years, during which time we believe that
alternative  arrangements  will be made so that this guarantee will no longer be
in force.

OTHER
South  African  Secondary  Tax on  Companies  at 12.5  percent is payable on all
dividends  declared out of  distributable  reserves of South African  companies.
There were no dividends of this nature declared in 2003, 2002 or 2001.

During  2003,  the Company  entered into  various  contracts  with web based and
non-web based  companies  whereby these companies will direct their customers to
the  Fantasycup.com  website.  For those customers that register for the fantasy
league through the website, the Company will pay commissions ranging from 12% to
50% of net revenues  depending on the terms of each  individual  agreement.  The
term of  these  agreements  are for one  year and are  renewed  annually  unless
terminated by either party.

In June 2001, the Company entered into an agreement with TWI  Interactive,  Inc.
(TWI), the online arm of International Management Group (IMG). The agreement was
designed to assist Fantasy in establishing  itself as the premier,  independent,
subscription-based  fantasy sports game producer. TWI and affiliates of IMG will
provide  exclusive  representation  and services  across a broad spectrum of its
sports  marketing  activities.  Under the agreement,  the Company will pay TWI a
monthly fee of $12,000 and  commissions of 20% to 50% of net revenues  generated
as a result of the services provided by TWI. The agreement also provides for TWI
to receive a four-year warrant to acquire 4.68 shares of Fantasy common stock at
$47,191 per share.  There was no charge to operations in 2001 for the fair value
of the warrants since the amount was not considered material. This agreement was
terminated in June 2002, but the warrants remain outstanding and expire June 21,
2005 (see Note 18).



                                      F-29
<PAGE>

NOTE 22. QUARTERLY INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         Quarters Ended
                                                  -----------------------------------------------------------
                                                   September 30,   December 31,     March 31,      June 30,
                                                        2002           2002           2003           2003         Total
                                                        ----           ----           ----           ----
<S>                                                <C>            <C>            <C>            <C>            <C>
        Revenues                                   $ 1,021,314    $   651,526    $   653,023    $   815,585    $ 3,141,448
        Income (Loss) from continuing operations       (39,722)       627,183        137,530        344,058      1,069,049
        Net income( loss)                             (205,637)       187,272         78,806          8,907         69,348
        Net income (loss) per share - basic              (0.02)           0.2            0.1            0.0            0.1
        and diluted
        Weighted average common stock
           outstanding - basic and diluted           8,940,617      8,807,180      8,776,199      8,807,154      8,704,620


                                                                         Quarters Ended
                                                  -----------------------------------------------------------
                                                   September 30,   December 31,     March 31,      June 30,
                                                        2001           2003           2002           2002         Total
                                                        ----           ----           ----           ----

        Revenues                                   $   997,024    $   683,661    $   634,958    $   791,681    $ 3,103,324
         Income (Loss) from continuing                (823,368)    (1,738,786)      (514,529)       112,644     (2,964,039)
        operations
        Net income (loss)                             (823,368)    (1,928,935)      (780,592)      (255,905)    (3,788,800)
        Net Income (loss) per share - basic              (0.10)         (0.22)         (0.09)         (0.03)         (0.43)
        and diluted
        Weighted average common stock
           outstanding - basic and diluted           8,136,095      8,969,889      8,949,855      8,947,899      8,750,937
</TABLE>




                                      F-30



<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.


                                   PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS AND EXECUTIVE OFFICERS

Our  directors  and our  executive  officers and the  executive  officers of our
subsidiaries, their ages and present position are as follows:

                 NAME            AGE                POSITIONS
     ---------------------------------------------------------------------------

     Michael Levy............    57     Chairman of the Board

     Clive Kabatznik.........    46     Vice Chairman of the Board,
                                        Chief Executive Officer,
                                        President and Chief Financial Officer

     Cornelius J. Roodt......    44     Director

     Joseph Weil.............    48     Director

     Stanley Castleton.......    56     Director

     Greg Liegey.............    40     Chief Executive Officer,
                                        Fantasy Sports, Inc.

MICHAEL  LEVY is our  cofounder  and has  served  as  Chairman  of our  Board of
Directors since our inception. Since 1987, Mr. Levy has been the Chief Executive
Officer and Chairman of the Board of Arpac L.P., a Chicago-based manufacturer of
plastic packaging machinery.

CLIVE  KABATZNIK is our cofounder and has served as a director and our President
since  inception and as our Vice  Chairman,  Chief  Executive  Officer and Chief
Financial  Officer since October 1995. Mr.  Kabatznik has served as President of
Colonial Capital, Inc. a Miami-based investment banking company that specializes
in advising middle market companies in areas concerning  mergers,  acquisitions,
private and public agency funding and debt placements.

CORNELIUS  J.  ROODT has  served as a member  of our  Board of  Directors  since
December 1996 and was appointed Managing Director and Chief Financial Officer of
one of our subsidiaries, First South African Holdings (Pty.) Ltd., in July 1996.
Mr. Roodt was responsible for overseeing all of the South African  operations of
First  South  African  Holdings  (Pty.) Ltd.  Mr.  Roodt led the buyout of First
Lifestyle Holdings and he is currently Chief Executive of the successor company,
First Lifestyle Holdings, (Pty) Ltd. He is no longer an executive officer of any
of our  subsidiaries.  From February  1994 to June 1996,  Mr. Roodt was a senior
partner at Price Waterhouse  Corporate Finance,  South Africa. From January 1991
to January 1994, he was an audit partner at Price Waterhouse, South Africa.

STANLEY  CASTLETON  is,  and for the past five years has been the  President  of
DDRM,  Inc.,  the  managing  general  partner  and asset  manager  of the Hilton
Anaheim, and he is currently also the Managing Member of DDRM Greatplace LLCD, a
real estate development company.



                                      -14-
<PAGE>

JOSEPH WEIL has served as the  President and Chief  Executive  Officer of Joseph
Weil & Sons,  Inc. since 1985.  Joseph Weil & Sons is an  independent  wholesale
distributor  of paper  products,  packaging  supplies  and  equipment,  sanitary
products,  janitorial  supplies and equipment,  as well as food service products
and  office  equipment.  He also  serves  as an active  member of many  business
associations  including  Afflink  Worldwide  Trade  Group,  which he  serves  as
Chairman  of the  Board of  Directors.  Since  1996,  he has also  served  as an
Executive Board Member of the Greater Illinois chapter of the National  Multiple
Sclerosis Society.

GREGORY  LIEGEY has been the Chief  Executive  Officer of Fantasy  Sports,  Inc.
since we acquired  that company in November  2000. He was the founder of Fantasy
Sports and since its inception in 1993, he has acted as Chief  Executive of that
company.  From 1988 to 1993, he was a manager of sales and marketing  accounting
at Pfaltzgraff.  From 1985 to 1988, he was a senior auditor at Arthur  Andersen.
Mr. Liegey holds a degree in accounting from Shippensburg University.

All of our directors hold office until their respective  successors are elected,
or until death,  resignation or removal.  Officers hold office until the meeting
of the Board of Directors  following  each Annual  Meeting of  Stockholders  and
until their successors have been chosen and qualified.

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has an audit committee and a compensation committee.  The
audit  committee is composed of Stanley  Castleton and  Cornelius J. Roodt.  The
audit  committee  is  responsible  for  recommending  annually  to the  Board of
Directors  the  independent   auditors  to  be  retained,   reviewing  with  the
independent  auditors  the  scope  and  results  of  the  audit  engagement  and
establishing and monitoring our financial policies and control procedures.

The  compensation  committee  is  currently  composed of Michael Levy and Joseph
Weil.  The  compensation  committee has power and authority  with respect to all
matters  pertaining to compensation and the administration of employee benefits,
deferred compensation and our stock option plans.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Section  16(a) of the  Securities  Exchange Act of 1934  requires our  executive
officers and directors,  and persons who  beneficially  own more than 10% of our
common  stock,  to file initial  reports of ownership  and reports of changes of
ownership  with the  Securities  and Exchange  Commission  and furnish copies of
those  reports  to us.  Based  solely on a review of the  copies of the  reports
furnished  to us to  date,  or  written  representations  that no  reports  were
required,  we believe that all reports required to be filed by such persons with
respect to our fiscal year ended June 30, 2002 were timely made.


ITEM 11.      EXECUTIVE COMPENSATION

The following summary  compensation table sets forth the aggregate  compensation
we paid or accrued to our Chief Executive  Officer during the fiscal years ended
June 30, 2001,  June 30, 2002 and June 30, 2003.  Apart from our Chief Executive
Officer, whose annual salary is $315,000,  none of our executive officers of any
of our  subsidiaries  received  compensation  in excess of  $100,000  during the
fiscal year ended June 30, 2003.


                                      -15-
<PAGE>

<TABLE>
<CAPTION>

                                                 SUMMARY COMPENSATION TABLE

                                            ANNUAL COMPENSATION                               LONG TERM COMPENSATION
                                      ------------------------------                   -----------------------------------
                             FISCAL
NAME AND                     YEAR                                       OTHER ANNUAL       RESTRICTED       SECURITIES
PRINCIPAL POSITION           ENDED         SALARY         BONUS         COMPENSATION         STOCK          UNDERLYING
                            JUNE 30,                                                         AWARDS        STOCK OPTIONS
--------------------      ----------  ---------------  -------------   ---------------  ----------------  ----------------
                                              $             $
<S>                           <C>            <C>            <C>              <C>             <C>            <C>
Clive Kabatznik,              2003           315,000        0                ---              ---              5,000
President and Chief           2002           315,000        0                                                  5,000
Executive Officer             2001           303,750        0                                                  5,000

</TABLE>


The  options  granted to Mr.  Kabatznik  during  fiscal year ended June 30, 2003
represent:

     o   an option  granted  under our 1995 Stock Option Plan to purchase  5,000
         shares  of our  common  stock,  which is  currently  exercisable  at an
         exercise price of $0.16 per share;

The  options  granted to Mr.  Kabatznik  during  fiscal year ended June 30, 2002
represent:

     o   an option  granted  under our 1995 Stock Option Plan to purchase  5,000
         shares  of our  common  stock,  which is  currently  exercisable  at an
         exercise price of $0.42 per share;

The  options  granted to Mr.  Kabatznik  during  fiscal year ended June 30, 2001
represent:

     o   an option  granted  under our 1995 Stock Option Plan to purchase  5,000
         shares  of our  common  stock  which  is  currently  exercisable  at an
         exercise price of $0.75 per share.

OPTIONS GRANTED IN FISCAL 2003

         The  following  table  sets forth the  details  of options to  purchase
common stock we granted to our executive  officers during fiscal year ended June
30, 2003,  including  the potential  realized  value over the 5 year term of the
option based on assumed rates of stock  appreciation  of 5% and 10%,  compounded
annually.  These  assumed  rates of  appreciation  comply  with the rules of the
Securities  and Exchange  Commission and do not represent our estimate of future
stock price.  Actual gains, if any, on stock option  exercises will be dependent
on the  future  performance  of our common  stock.  Each  option is  immediately
exercisable.

<TABLE>
<CAPTION>
                                                     OPTIONS GRANTED
                                                     ---------------
                                                                                                    POTENTIAL REALIZABLE
                              NUMBER OF      PERCENT OF TOTAL     PER                              VALUE AT ASSUMED ANNUAL
                             SECURITIES             TO           SHARE        EXPIRATION DATE         RATE OF STOCK PRICE
                             UNDERLYING        EMPLOYEES IN     EXERCISE                                 APPRECIATION
NAME                           OPTIONS         FISCAL YEAR       PRICE                                  FOR OPTION TERM
--------------------------  ---------------  ----------------  -----------    ----------------    ---------------------------
                                                                                                        5%          10%
                                                                                                       ---          ---
<S>                                 <C>           <C>            <C>            <C>                    <C>          <C>
Clive Kabatznik                     5,000         100%           $.16           December 16,           $876         $1,105
                                                                                   2007
</TABLE>


                                      -16-
<PAGE>

AGGREGATED  OPTION  EXERCISES  IN LAST  FISCAL YEAR AND FISCAL  YEAR-END  OPTION
VALUES

         During the fiscal year ended June 30, 2003 no options were exercised by
our executive  officers.  The following table sets forth the number of shares of
our common  stock  underlying  unexercised  stock  options  granted by us to our
executive officers and the value of those options at June 30, 2003. The value of
each  option is based on the  positive  difference,  if any,  of the closing bid
price for our common  stock on the Nasdaq  National  Market on June 30,  2003 or
$0.30, over the exercise price of the option.

<TABLE>
<CAPTION>

                                 NUMBER OF SECURITIES UNDERLYING
                                     UNEXERCISED OPTIONS AT          VALUE OF UNEXERCISED IN THE MONEY
                                         FISCAL YEAR-END                OPTIONS AT FISCAL YEAR-END
                                         ---------------                --------------------------
NAME OF EXECUTIVE OFFICER         EXERCISABLE      UNEXERCISABLE      EXERCISABLE        UNEXERCISABLE
------------------------------- ----------------- ---------------- ------------------- ------------------

<S>                                  <C>               <C>                <C>                <C>
Clive Kabatznik                      725,000           ---               $1,750              $--

</TABLE>

DIRECTOR COMPENSATION

Except for Mr. Levy, our directors do not receive fixed  compensation  for their
services as directors other than options to purchase 10,000 shares of our common
stock granted to each non-employee director and options to purchase 5,000 shares
of our common stock  granted to each  director who is an employee,  in each case
under our 1995 Stock Option Plan. Mr. Levy receives an annual  consulting fee of
$60,000 and options to purchase 10,000 shares of our common stock for every year
of service as a member of our Board of Directors.  Directors are  reimbursed for
their  reasonable  out-of-pocket  expenses  incurred  in  connection  with their
duties.

EMPLOYMENT AGREEMENTS

On April 12, 2000,  the  Company's  Board of  Directors  approved an Amended and
Restated Employment Agreement with Clive Kabatznik (the "Employment Agreement").
Pursuant to the  Employment  Agreement,  Mr.  Kabatznik  will serve as the Chief
Executive  Officer,  President  and  Chief  Financial  Officer  of  the  Company
beginning as of February 1, 2000 and  continuing  through and until  January 31,
2005. As  compensation  for his services,  Mr.  Kabatznik will receive an annual
base salary of $300,000 (with five percent  increases each year),  and an annual
bonus of five percent of net realized  capital gains upon the sale,  liquidation
or  distribution  by the  Company of any  Portfolio  Company  (as defined in the
Employment  Agreement).  A Portfolio  Company  does not include any of the South
African  entities  currently  owned by the Company.  In the event of a Change in
Control (as defined in the  Employment  Agreement),  Mr.  Kabatznik  may also be
entitled to a payment of five percent of any net unrealized capital gains on any
Portfolio  Company,  which gains may, at the option of the  Company,  be paid in
cash, stock of the Portfolio Company or any combination of the foregoing.


                                      -17-
<PAGE>

On November 30, 2000, Fantasy Sports Inc. entered into Employment Agreement with
Gregory S.  Liegey (the  "Employment  Agreement").  Pursuant  to the  Employment
Agreement,  Mr.  Liegey will serve as the Chief  Executive  Officer,  of Fantasy
Sports Inc.  beginning as of November 30, 2000 and continuing  through and until
November 30, 2003. As compensation for his services,  Mr. Liegey will receive an
annual base salary of $100,000 with  increases at the discretion of the board of
directors of Fantasy Sports Inc. In addition,  Mr. Liegey  received a three-year
option to acquire 5% of the shares of Fantasy  Sports,  Inc.  outstanding  as of
November 16, 2000,  at a price equal to that paid by  Silverstar  Holdings  upon
acquisition of the assets of Fantasy Sports Inc. A similarly priced  performance
based three-year  option to acquire a further 2.5% of the outstanding  shares of
Fantasy Sports Inc. as of November 16, 2000 was also issued to Mr. Liegey.  This
performance  based  option  will vest on the  earlier  of  Fantasy  Sports  Inc.
achieving an aggregate  EBITDA of $4 million for calendar years 2001 and 2002 or
an aggregate EBITDA of $9 million for calendar years 2001, 2002 and 2003.

STOCK OPTION PLAN

Our Board of Directors  has adopted and our  shareholders,  prior to our initial
public offering, approved our 1995 Stock Option Plan. Our 1995 Stock Option Plan
provides for the grant of:

o    options that are intended to qualify as incentive  stock options within the
     meaning  of  Section  422 of the  Internal  Revenue  Code  of  1986  to key
     employees; and

o    options  not  intended  to so  qualify  to  key  employees,  including  our
     directors  and  officers,  and to  directors  and  consultants  who are not
     employees.

The total number of shares of our common stock for which  options may be granted
under our 1995 Stock Option Plan is 850,000 shares.

Our 1995 Stock Option Plan is administered by the compensation  committee of our
Board of  Directors.  The  compensation  committee  will  determine the terms of
options exercised, including the exercise price, the number of shares subject to
the option and the terms and conditions of exercise. No option granted under our
1995 Stock Option Plan is transferable by the optionee other than by will or the
laws of descent  and  distribution  and each  option is  exercisable  during the
lifetime of the optionee only by such optionee or his legal representatives.

The exercise  price of incentive  stock under our 1995 Stock Option Plan must be
at least  equal to 100% of the fair  market  value of such shares on the date of
grant,  or 110% of fair market  value in the case of an optionee  who owns or is
deemed  to own  stock  possessing  more  than 10% of the  voting  rights  of our
outstanding  capital  stock.  The term of each option will be established by the
compensation  committee,  in its sole discretion.  However, the maximum term for
each  incentive  stock  option  granted  under our 1995 Stock Option Plan is ten
years,  or five  years in the case of an  optionee  who owns or is deemed to own
stock  possessing  more  than  10% of the  total  combined  voting  power of our
outstanding capital stock.  Options will become exercisable at such times and in
such  installments  as the  compensation  committee will provide in the terms of
each  individual  option.  The maximum number of shares for which options may be
granted to any individual in any fiscal year is 210,000.



                                      -18-
<PAGE>

Our 1995 Stock Option Plan also  contains an automatic  option grant program for
our directors.  Each of our non-employee  directors is automatically  granted an
option to  purchase  10,000  shares of our common  stock  following  each annual
meeting  of  shareholders.  In  addition,  each  of our  employee  directors  is
automatically  granted an option to purchase  5,000  shares of our common  stock
following each annual meeting of shareholders.  Each grant has an exercise price
per share  equal to the fair market  value of the our common  stock on the grant
date, is immediately  exercisable and has a term of five years measured from the
grant date,  subject to earlier  termination if an optionee's service as a Board
member is terminated for cause.

Through  September 28, 2003, we have granted options to purchase  485,000 shares
of our common stock under our 1995 Stock Option Plan, 170,000 of which have been
exercised.

NON-PLAN STOCK OPTIONS

We have  granted  non-plan  stock  options to purchase  1,110,000  shares of our
common stock, 122,500 at of which were granted at an exercise price of $0.75 per
share,  433,333  of which were  granted at $4.10 per share,  25,000 at $2.19 per
share, 330,000 at $4.75 per share and 200,000 at $5.00 per share.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of our  compensation  committee of our Board of Directors is
now or ever has been one of our  officers or  employees.  None of our  executive
officers serves as a member of the board of directors or compensation  committee
of any entity that has one or more  executive  officers  serving on our Board of
Directors or our compensation committee.

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of August 31, 2003, certain information as to
the beneficial ownership of the our common stock by:

o    each  person  known  by us to  own  more  than  five  percent  (5%)  of our
     outstanding shares;

o    each of our directors;

o    each of our  executive  officers  named in the Summary  Compensation  Table
     under "Executive Compensation"; and

o    all of our directors and executive officers as a group.




                                      -19-
<PAGE>

<TABLE>
<CAPTION>
                                        Amount and Nature of Beneficial
                                        -------------------------------
                                                  Ownership (1)
                                                  -------------
                                                                                   Percentage    Percentage of
                                                                                   -----------   --------------
                                                           Class B                     of            Voting
         Name and Address of               Common          -------                     --            ------
         Beneficial Shareholder            ------          Common                  Ownership         Power
         ----------------------            Stock            ------                  ---------        -----
                                           -----          Stock (2)                   (1)(3)         (1)(3)
                                                          ---------                   ------         ------
<S>                                      <C>              <C>                         <C>             <C>
         Michael Levy                    196,000(4)       736,589(5)                  11.0%           31.8%
         9511 West River Street
         Schiller Park, IL 60176

         Clive Kabatznik                 904,400(6)        190,000                    10.7%           15.2%
         6100 Glades Road
         Suite 305
         Boca Raton, FL 33434

         Cornelius J. Roodt              190,000(7)           0                        2.2%            1.6%
         P.O. Box 4001
         Kempton Park
         South Africa

         American Stock Transfer         354,334(8)       166,452(8)                   6.1%            9.7%
          & Trust Company
         6201 15th Avenue
         Brooklyn, New York 11219

         Joseph Weil                          0               0                         *              *
         6100 Glades Road
         Suite 305
         Boca Raton, Florida 33434

         Stanley Castleton              205,750(9)            0                        2.4%            1.7%
         6100 Glades Road
         Suite 305
         Boca Raton, Florida 33434

         All executive officers
         and directors as a group
         (5 persons)                  1,422,584(10)        926,589                    26.3%           50.3%
</TABLE>

* Less than 1%.
(1)      Beneficial  ownership is calculated in accordance with Rule 13d3 under
         the Securities  Exchange Act of 1934.  Shares subject to stock options,
         for purposes of this table, are considered  beneficially  owned only to
         the extent  currently  exercisable or exercisable  within 60 days after
         August 31, 2002.



                                      -20-
<PAGE>

(2)      Except as  otherwise  indicated,  each of the  parties  listed has sole
         voting  and  investment  power  with  respect  to all shares of Class B
         common stock indicated above.

(3)      For the purposes of this calculation,  our common stock and our Class B
         common stock are treated as a single class of common stock. Our Class B
         common  stock is entitled  to five votes per share,  whereas our common
         stock is entitled to one vote per share.

(4)      Includes  150,000  shares of our common stock issuable upon exercise of
         options that are immediately exercisable.

(5)      Includes  (i)  570,137  shares  of our  Class B common  stock  and (ii)
         166,452 shares of our Class B common stock issued to the American Stock
         Transfer & Trust Company pursuant to the terms of an escrow  agreement,
         which  shares  correspond  to a like  number of  shares of First  South
         African  Holdings (Pty.) Ltd. Class B stock.  American Stock Transfer &
         Trust  Company  has  granted  to Mr.  Levy a proxy to vote each of such
         shares of our Class B common stock.

(6)      Includes  725,000  shares of our common stock issuable upon exercise of
         options that are immediately exercisable.

(7)      Includes  190,000  shares of our common stock issuable upon exercise of
         options that are immediately exercisable.

(8)      Based solely upon  information  contained in a Schedule 13G,  Amendment
         No.  1,  dated   12/31/99   filed  with  the  Securities  and  Exchange
         Commission.  All shares are held as escrow  agent  pursuant  to various
         escrow  agreements.  American  Stock  Transfer & Trust  Company holds a
         proxy to vote the shares of common stock. Michael Levy holds a proxy to
         vote the shares of Class B Common Stock.

(9)      Includes  35,000 shares of our common stock  issuable upon the exercise
         of options that are immediately exercisable.

(10)     Includes  1,100,000  shares  issuable upon exercise of options that are
         immediately exercisable.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.



                                      -21-
<PAGE>

                                     PART IV

ITEM 14. CONTROLS AND PROCEDURES

We maintain  disclosure  controls and procedures that are designed to ensure (1)
that information required to be disclosed by us in the reports we file or submit
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), is
recorded, processed,  summarized, and reported within the time periods specified
in the Securities  and Exchange  Commission's  ("SEC") rules and forms,  and (2)
that  this  information  is  accumulated  and  communicated  to our  management,
including  our  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate,  to  allow  timely  decisions  regarding  required  disclosure.  In
designing and  evaluating  the disclosure  controls and  procedures,  management
recognizes  that any controls and  procedures,  no matter how well  designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives,  and  management  necessarily  was required to apply its judgment in
evaluating the cost benefit relationship of possible controls and procedures.

In April 2003,  under the supervision and review of our Chief Executive  Officer
and Chief Financial Officer,  we conducted an evaluation of the effectiveness of
our disclosure  controls and  procedures.  Based on that  evaluation,  our Chief
Executive  Officer  and our Chief  Financial  Officer  have  concluded  that our
disclosure  controls and  procedures  are effective in alerting them in a timely
manner  to  material  information   regarding  us  (including  our  consolidated
subsidiaries)  that is required to be  included in our  periodic  reports to the
SEC.

In addition,  there have been no significant changes in our internal controls or
in other factors that could significantly  affect those controls since our April
2003 evaluation.  We cannot assure you,  however,  that our system of disclosure
controls and  procedures  will always  achieve its stated goals under all future
conditions, no matter how remote.

ITEM 15.

         (A)   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K

         1.    FINANCIAL STATEMENTS

         The following financial statements are included as required to be filed
by Item 8:

SILVERSTAR HOLDINGS, LTD.

         Report of independent Certified Public Accountant

         Consolidated Balance Sheets at June 30, 2003 and 2002

         Consolidated  Statements  of  Operations  for the years  ended June 30,
         2003, 2002 and 2001

         Consolidated Statements of Cash Flows for the years ended June 30,
         2003, 2002 and 2001

         Consolidated  Statement of  Consolidated  statements  of  stockholders'
         equity and  Comprehensive  loss for the years ended June 30, 2001, 2002
         and 2003

         Notes to the Consolidated  Financial  Statements for the years ended
         June 30, 2003, 2002, and 2001

         2.    FINANCIAL STATEMENT SCHEDULES:

         All  schedules  have been  omitted  since the required  information  is
included in the consolidated financial statements or notes thereto.



                                      -22-
<PAGE>

         3.    EXHIBITS:  SEE BELOW


         (B)   REPORTS ON FORM 8K

         Not applicable.

EXHIBIT NUMBER     DESCRIPTION
--------------     -----------

         3.1       Memorandum of Association of the Registrant(2)
         3.2       By-Laws of the Registrant(2)
         4.3       Indenture  dated April 25, 1997 between the  Registrant and
                   American Stock Transfer & Trust Company(1)
         4.6       Stock Option Agreement(3)
         10.2      Form of FSAH Escrow Agreement(2)
         10.3      Form of First Amended and Restated Employment  Agreement of
                   Clive Kabatznik(2)
         10.4      Form of FSAM Management Agreement(2)
         10.5      Form of Consulting Agreement with Michael Levy(2)
         10.6      1995 Stock Option Plan(2)
         10.7      Asset  purchase  agreement  by and among First South Africa
                   Holdings  PTY  Ltd.  and  minority  shareholders  of  First
                   Lifestyle Holdings,  Ltd., Ethos Private Equity,  Cornelius
                   Roodt and certain other  purchasers and the Company,  dated
                   as of September 24, 2000(4)
         10.8      Fantasy  Sports  Asset  Acquisition  Agreement  dated as of
                   November 17, 2000(5)
         10.9      Employment Agreement of Greg Liegey(6)
         21.1      Subsidiaries of the Registrant(7)
         23.1      Consent of Rachlin Cohen & Holtz(7)
         31.1      Certification  Pursuant to 18 U.S.C.  Section  1350 adopted
                   pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(7)
         32.1      Certification  Pursuant to 18 U.S.C.  Section  1350 adopted
                   pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(7)

----------

(1)      Incorporated  by reference is the  Registrant's  Current Report on Form
         8-K,  Exhibit 4.1 (filed on September 10, 1997).
(2)      Incorporated by reference is the Registrant's Registration Statement on
         Form S-1 (No. 33-99180) (filed on November 9, 1995), as amended on Form
         S-1/A No. 1, Form S-1/A No. 2, Form S-1/A No. 3 (filed on December  27,
         1995,  January 16, 1996 and January 24,  1996,  respectively)  and Form
         10-Q for the fiscal quarter ended March 31, 2000.
(3)      Incorporated by reference is the Registrant's Registration Statement on
         Form S-1 (No. 333-33561) (filed on August 13, 1997), as amended on Form
         S-1/A No. 1, Form S-1/A No. 2 and For S-1/A No. 3 (filed on December 9,
         1997, January 22,  1998 and  February  11,  1998,  respectively).
(4)      Incorporated  by reference to the Company's  current report on Form 8-K
         filed with the  Commission  on October 12, 2000.
(5)      Incorporated  by reference to the Company's  current report on Form 8-K
         filed with the  Commission  on December 1, 2000.
(6)      Incorporated  by reference to the Company's  current report on From 8-K
         filed with the Commission on October 9, 2001.
(7)      Filed herewith.



                                      -23-
<PAGE>

                                            SILVERSTAR HOLDINGS, LTD.


                                            BY: /s/ Clive Kabatznik
                                               ---------------------------------
                                               Clive Kabatznik
                                               President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant in
the capacities and on the date indicated.

<TABLE>
<CAPTION>

Signature                                  Title                              Date
---------                                  -----                              ----

<S>                                                                                 <C>
/s/ Michael Levy                   Chairman of the Board of             September 30, 2003
-------------------------          Directors
Michael Levy


/s/ Clive Kabatznik                President, Vice Chairman,            September 30, 2003
-------------------------          Chief Executive Officer, Chief
Clive Kabatznik                    Financial Officer, Director and
                                   Controller


/s/ Cornelius Roodt                Director                             September 30, 2003
-------------------------
Cornelius Roodt


/s/ Stanley Castleton              Director                             September 30, 2003
-------------------------
Stanley Castleton


/s/ Joseph Weil                    Director                             September 30, 2003
-------------------------
Joseph Weil

</TABLE>


                                      -24-
<PAGE>

                                  EXHIBIT INDEX


EXHIBIT NUMBER    DESCRIPTION
--------------    -----------

         3.1      Memorandum of Association of the Registrant(2)
         3.2      By-Laws of the Registrant(2)
         4.3      Indenture  dated April 25, 1997 between the  Registrant and
                  American Stock Transfer & Trust Company(1)
         4.6      Stock Option Agreement(3)
         10.2     Form of FSAH Escrow Agreement(2)
         10.3     Form of First Amended and Restated Employment  Agreement of
                  Clive Kabatznik(2)
         10.4     Form of FSAM Management Agreement(2)
         10.5     Form of Consulting Agreement with Michael Levy(2)
         10.6     1995 Stock Option Plan(2)
         10.7     Asset  purchase  agreement  by and among First South Africa
                  Holdings  PTY  Ltd.  and  minority  shareholders  of  First
                  Lifestyle Holdings,  Ltd., Ethos Private Equity,  Cornelius
                  Roodt and certain other  purchasers and the Company,  dated
                  as of September 24, 2000(4)
         10.8     Fantasy  Sports  Asset  Acquisition  Agreement  dated as of
                  November 17, 2000(5)
         10.9     Employment Agreement of Greg Liegey(6)
         21.1     Subsidiaries of the Registrant(7)
         23.1     Consent of Rachlin Cohen & Holtz(7)
         31.1     Certification  Pursuant to 18 U.S.C.  Section  1350 adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(7)
         32.1     Certification  Pursuant to 18 U.S.C.  Section  1350 adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(7)

----------

(1)      Incorporated  by reference is the  Registrant's  Current Report on Form
         8-K,  Exhibit 4.1 (filed on September 10, 1997).
(2)      Incorporated by reference is the Registrant's Registration Statement on
         Form S-1 (No. 33-99180) (filed on November 9, 1995), as amended on Form
         S-1/A No. 1, Form S-1/A No. 2, Form S-1/A No. 3 (filed on December  27,
         1995,  January 16, 1996 and January 24,  1996,  respectively)  and Form
         10-Q for the fiscal quarter ended March 31, 2000.
(3)      Incorporated by reference is the Registrant's Registration Statement on
         Form S-1 (No. 333-33561) (filed on August 13, 1997), as amended on Form
         S-1/A No. 1, Form S-1/A No. 2 and For S-1/A No. 3 (filed on December 9,
         1997, January 22,  1998 and  February  11,  1998,  respectively).
(4)      Incorporated  by reference to the Company's  current report on Form 8-K
         filed with the  Commission  on October 12, 2000.
(5)      Incorporated  by reference to the Company's  current report on Form 8-K
         filed with the  Commission  on December 1, 2000.
(6)      Incorporated  by reference to the Company's  current report on From 8-K
         filed with the Commission on October 9, 2001.
(7)      Filed herewith.


                                      -25-