SILVERSTAR HOLDINGS LIMITED

             CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


   SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended March 31, 2001

                                       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                           Not Applicable
           (State or Other Jurisdiction of     (IRS 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: 809-295-1422
                                                            ------------

      ---------------------------------------------------------------------
   Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                     Report.


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 ___

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ____No __

APPLICABLE ONLY TO CORPORATE ISSUERS:

       The number of shares of common stock outstanding as of May 14, 2001 was
8,184,958.


<PAGE>
<TABLE>
<CAPTION>
                          SILVERSTAR HOLDINGS LIMITED

            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PART I - FINANCIAL INFORMATION

<S>     <C>
ITEM 1.  Condensed Consolidated Balance Sheets (Unaudited) at March 31, 2001 and June 30, 2000

         Condensed Consolidated Statements of Operations (Unaudited) for the  three and nine months
         ended March 31, 2001 and 2000

         Condensed Consolidated Statements of Cash Flows (Unaudited)for the nine months ended March
         31, 2001 and 2000

         Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

ITEM 3.  Quantitative and Qualitative Disclosure about Market Risk

PART II - OTHER INFORMATION

ITEM 6.           Exhibits and Reports on Form 8-K

SIGNATURES
</TABLE>

                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                                             SILVERSTAR HOLDINGS LIMITED

                                  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

--------------------------------------------------------------------------------------------------------------------
                                     ASSETS
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                          MARCH               JUNE
                                                                                            31,                30,
                                                                                           2001               2000
                                                                                                          RESTATED
                                                                                              $                  $
<S>                                                                                  <C>                <C>
--------------------------------------------------------------------------------- ---------------- -----------------
CURRENT ASSETS
--------------------------------------------------------------------------------- ---------------- -----------------
         Cash and cash equivalents                                                   12,197,191         29,853,067
--------------------------------------------------------------------------------- ---------------- -----------------
         Accounts receivable, net                                                             -         10,608,197
--------------------------------------------------------------------------------- ---------------- -----------------
         Inventories                                                                    403,715          9,386,857
--------------------------------------------------------------------------------- ---------------- -----------------
         Prepaid expenses and other current assets                                      899,621          3,631,348
--------------------------------------------------------------------------------- ---------------- -----------------
         Deferred income taxes                                                                -            898,280
                                                                                  ----------------     -----------
--------------------------------------------------------------------------------- ---------------- -----------------
                  TOTAL CURRENT ASSETS                                               13,500,527         54,377,749
--------------------------------------------------------------------------------- ---------------- -----------------
Property, plant and equipment, net                                                      201,308         18,215,196
--------------------------------------------------------------------------------- ---------------- -----------------
Investments in affiliates                                                             1,229,513          1,283,935
--------------------------------------------------------------------------------- ---------------- -----------------
Long term receivable                                                                  5,071,069                  -
--------------------------------------------------------------------------------- ---------------- -----------------
Intangible assets, net                                                                3,602,404         20,130,119
--------------------------------------------------------------------------------- ---------------- -----------------
Deferred charges                                                                         52,652            228,078
--------------------------------------------------------------------------------- ---------------- -----------------
Other assets                                                                                  -             31,362
                                                                                  ----------------   -------------
--------------------------------------------------------------------------------- ---------------- -----------------
TOTAL ASSETS                                                                         23,657,473         94,266,439
                                                                                     ==========         ==========
--------------------------------------------------------------------------------- ---------------- -----------------


                                                         -3-
<PAGE>


--------------------------------------------------------------------------------------------------------------------
                                         LIABILITIES AND STOCKHOLDERS' EQUITY

--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                            MARCH             JUNE
                                                                                              31,              30,
                                                                                             2001             2000
                                                                                                          RESTATED
                                                                                                $                $
--------------------------------------------------------------------------------- ---------------- -----------------
CURRENT LIABILITIES
--------------------------------------------------------------------------------- ---------------- -----------------
         Bank overdraft                                                                    12,098          896,860
--------------------------------------------------------------------------------- ---------------- -----------------
         Current portion of long term debt                                              7,449,765        2,105,153
--------------------------------------------------------------------------------- ---------------- -----------------
         Accounts payable                                                                 426,519       13,046,686
--------------------------------------------------------------------------------- ---------------- -----------------
         Other provisions and accruals                                                    652,166        5,754,638
--------------------------------------------------------------------------------- ---------------- -----------------
         Deferred revenue                                                               1,530,430                -
--------------------------------------------------------------------------------- ---------------- -----------------
         Dividends payable                                                                      -          179,840
--------------------------------------------------------------------------------- ---------------- -----------------
         Income taxes payable                                                                   -          676,003
--------------------------------------------------------------------------------- ---------------- -----------------
         Other taxes payable                                                                    -          303,812
                                                                                  -----------------    -----------
--------------------------------------------------------------------------------- ---------------- -----------------
                  TOTAL CURRENT LIABILITIES                                            10,070,978       22,962,992
--------------------------------------------------------------------------------- ---------------- -----------------
Long term debt                                                                                  -       15,473,769
--------------------------------------------------------------------------------- ---------------- -----------------
Deferred income taxes                                                                           -        4,402,038
                                                                                  ----------------     -----------
--------------------------------------------------------------------------------- ---------------- -----------------
                  TOTAL LIABILITIES                                                    10,070,978       42,838,799
                                                                                     ------------       ----------
--------------------------------------------------------------------------------- ---------------- -----------------
Minority interest                                                                               -       37,059,840
--------------------------------------------------------------------------------- ---------------- -----------------
FSAH mandatory redeemable preferred stock                                                       -        8,771,930
--------------------------------------------------------------------------------- ---------------- -----------------
Commitments and contingencies (Note 9)                                                          -                -
--------------------------------------------------------------------------------- ---------------- -----------------
STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------- ---------------- -----------------
Capital stock:
         A class common stock, $0.01 par value - authorized 23,000,000 Shares,
         issued and outstanding 7,246,010 shares
         (June 30: 8,368,676 shares)                                                       72,460           83,687
--------------------------------------------------------------------------------- ---------------- -----------------
         B class common stock, $0.01 par value - authorized 2,000,000 shares,
         Issued and outstanding 946,589 shares (June 30: 946,589 shares)                    9,466            9,466
--------------------------------------------------------------------------------- ---------------- -----------------
         FSAH B class common stock, R0.001 par value - authorized 10,000,000
         shares, issued and outstanding 2,671,087 shares
         (June 30: 2,671,087 shares)                                                          600              600
--------------------------------------------------------------------------------- ---------------- -----------------
       Preferred stock, $0.01 par value - authorized 5,000,000 shares, none
       Issued                                                                                   -                -
--------------------------------------------------------------------------------- ---------------- -----------------
         Additional paid-in capital                                                    63,408,692       64,307,442
--------------------------------------------------------------------------------- ---------------- -----------------
         Accumulated deficit                                                          (49,904,723)     (44,595,916)
--------------------------------------------------------------------------------- ---------------- -----------------
         Accumulated Other Comprehensive Income                                                 -      (14,209,409)
                                                                                  -----------------    ------------
--------------------------------------------------------------------------------- ---------------- -----------------
                  TOTAL STOCKHOLDERS' EQUITY                                           13,586,495        5,595,870
                                                                                       ----------      -----------
--------------------------------------------------------------------------------- ---------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                             23,657,473       94,266,439
                                                                                       ==========       ==========
--------------------------------------------------------------------------------- ---------------- -----------------


                                                         -4-
<PAGE>

                                             SILVERSTAR HOLDINGS LIMITED

                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

--------------------------------------------------------------------------------- ---------------- ----------------
                                                                                          THREE            THREE
                                                                                         MONTHS           MONTHS
                                                                                          ENDED            ENDED
                                                                                          MARCH            MARCH
                                                                                            31,              31,
                                                                                           2001             2000
                                                                                                        RESTATED
                                                                                              $                $
--------------------------------------------------------------------------------- ---------------- ----------------
Revenues                                                                                511,900                  -
                                                                                        -------    ---------------
--------------------------------------------------------------------------------- ---------------- ----------------
Operating expenses
--------------------------------------------------------------------------------- ---------------- ----------------
         Cost of sales                                                                  404,107                -
--------------------------------------------------------------------------------- ---------------- ----------------
         Selling, general and administrative costs                                    1,285,615          455,226
--------------------------------------------------------------------------------- ---------------- ----------------
         Amortization of intangibles                                                    109,788           67,879
--------------------------------------------------------------------------------- ---------------- ----------------
         Depreciation                                                                     9,901            1,297
--------------------------------------------------------------------------------- ---------------- ----------------
         Equity in losses of affiliates                                                 393,937                -
                                                                                        -------    -------------
--------------------------------------------------------------------------------- ---------------- ----------------
                                                                                      2,203,348          524,402
                                                                                      ---------         --------
--------------------------------------------------------------------------------- ---------------- ----------------
Operating loss                                                                       (1,691,448)        (524,402)
--------------------------------------------------------------------------------- ---------------- ----------------
Other income                                                                             56,633                -
--------------------------------------------------------------------------------- ---------------- ----------------
Interest income                                                                         395,359                -
--------------------------------------------------------------------------------- ---------------- ----------------
Foreign currency losses, net                                                            (98,235)               -
--------------------------------------------------------------------------------- ---------------- ----------------
Interest expense                                                                       (132,619)        (148,805)
                                                                                       ---------        ---------
--------------------------------------------------------------------------------- ---------------- ----------------
Loss from continuing operations before income taxes                                  (1,470,310)        (673,207)
--------------------------------------------------------------------------------- ---------------- ----------------
Provision for income taxes                                                                    -              155
                                                                                  ----------------    ----------
--------------------------------------------------------------------------------- ---------------- ----------------
Loss from continuing operations                                                      (1,470,310)        (673,052)
--------------------------------------------------------------------------------- ---------------- ----------------
Discontinued operations (Note 6)
Loss from operations, net of income taxes of $0 and ($195,435)                                -       (3,897,866)
                                                                                  ---------------     -----------
--------------------------------------------------------------------------------- ---------------- ----------------
Loss before extraordinary item                                                       (1,470,310)      (4,570,918)
                                                                                     -----------      -----------
--------------------------------------------------------------------------------- ---------------- ----------------
Extraordinary item-gain on extinguishment of debt, net of taxes of $nil and
$nil (Note 7)                                                                         1,026,896                -
                                                                                  ---------------     -----------
--------------------------------------------------------------------------------- ---------------- ----------------
Net loss                                                                               (443,414)      (4,570,918)
                                                                                       ---------      -----------
--------------------------------------------------------------------------------- ---------------- ----------------
Loss per share - basic and diluted
--------------------------------------------------------------------------------- ---------------- ----------------
         Continuing operations                                                          ($0.17)          ($0.08)
--------------------------------------------------------------------------------- ---------------- ----------------
         Discontinued operations and foreign currency losses                            ($0.00)          ($0.43)
                                                                                        -------          -------
--------------------------------------------------------------------------------- ---------------- ----------------
           Loss before extraordinary item                                               ($0.17)          ($0.51)
--------------------------------------------------------------------------------- ---------------- ----------------
         Extraordinary item                                                               $.12             -
                                                                                          ----
--------------------------------------------------------------------------------- ---------------- ----------------
           Net loss                                                                     ($0.05)          ($0.51)
                                                                                        -------          -------
--------------------------------------------------------------------------------- ---------------- ----------------
Weighted average common stock outstanding:
--------------------------------------------------------------------------------- ---------------- ----------------
         Basic                                                                        8,680,302        9,002,398
                                                                                      ---------        ---------
--------------------------------------------------------------------------------- ---------------- ----------------
         Diluted                                                                      8,680,302        9,002,398
                                                                                      ---------        ---------
--------------------------------------------------------------------------------- ---------------- ----------------

                                                         -5-
<PAGE>
                                             SILVERSTAR HOLDINGS LIMITED

                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

----------------------------------------------------------------------------------- --------------- -----------------
                                                                                             NINE            NINE
                                                                                           MONTHS          MONTHS
                                                                                            ENDED           ENDED
                                                                                            MARCH           MARCH
                                                                                              31,             31,
                                                                                             2001            2000
                                                                                                         RESTATED
                                                                                                $               $
----------------------------------------------------------------------------------- --------------- -----------------
Revenues                                                                                  511,900                 -
                                                                                          -------   ---------------
----------------------------------------------------------------------------------- --------------- -----------------
Operating expenses
----------------------------------------------------------------------------------- --------------- -----------------
         Cost of sales                                                                    404,107               -
----------------------------------------------------------------------------------- --------------- -----------------
         Selling, general and administrative costs                                      2,201,092       1,162,240
----------------------------------------------------------------------------------- --------------- -----------------
         Amortization of intangibles                                                      253,933         184,852
----------------------------------------------------------------------------------- --------------- -----------------
         Depreciation                                                                      17,925           4,366
----------------------------------------------------------------------------------- --------------- -----------------
         Equity in losses of affiliates                                                 1,320,579                  -
                                                                                        ---------   ----------------
----------------------------------------------------------------------------------- --------------- -----------------
                                                                                        4,197,636       1,351,458
----------------------------------------------------------------------------------- --------------- -----------------
Operating loss                                                                         (3,685,736)     (1,351,458)
----------------------------------------------------------------------------------- --------------- -----------------
Other income                                                                               56,633          56,731
----------------------------------------------------------------------------------- --------------- -----------------
Interest income                                                                         1,271,326               -
----------------------------------------------------------------------------------- --------------- -----------------
Foreign currency losses, net                                                             (887,277)              -
----------------------------------------------------------------------------------- --------------- -----------------
Interest expense                                                                         (536,157)     (1,134,473)
                                                                                         ---------     -----------
----------------------------------------------------------------------------------- --------------- -----------------
Loss from continuing operations before income taxes                                    (3,781,211)     (2,429,200)
----------------------------------------------------------------------------------- --------------- -----------------
Provision for income taxes                                                                      -            (642)
                                                                                    ----------------  ------------
----------------------------------------------------------------------------------- --------------- -----------------
Loss from continuing operations                                                        (3,781,211)     (2,429,842)
----------------------------------------------------------------------------------- --------------- -----------------
Discontinued operations (Note 6)
       Loss from operations, net of income taxes of $nil and $2,115,736
       Loss on disposal of discontinued operations, net of income taxes of $nil                 -      (7,179,823)
       and $nil                                                                        (2,554,492)              -
                                                                                       -----------    -----------
----------------------------------------------------------------------------------- --------------- -----------------
Loss before extraordinary item                                                         (6,335,703)     (9,609,665)
----------------------------------------------------------------------------------- --------------- -----------------
Extraordinary item-gain on extinguishments of debt, net of taxes $nil and $nil
(Note 7)                                                                                1,026,896               -
                                                                                        ---------     -----------
----------------------------------------------------------------------------------- --------------- -----------------
Net loss                                                                               (5,308,807)     (9,609,665)
                                                                                       -----------     -----------
----------------------------------------------------------------------------------- --------------- -----------------
Loss per share - basic and diluted
----------------------------------------------------------------------------------- --------------- -----------------
         Continuing operations                                                            ($0.42)         ($0.33)
----------------------------------------------------------------------------------- --------------- -----------------
         Discontinued operations foreign currency losses                                  ($0.28)         ($0.98)
                                                                                          -------         -------
----------------------------------------------------------------------------------- --------------- -----------------
           Loss before extraordinary item                                                 ($0.70)         ($1.31)
----------------------------------------------------------------------------------- --------------- -----------------
           Extraordinary item                                                              $0.12          ($0.0)
                                                                                           -----          ------
----------------------------------------------------------------------------------- --------------- -----------------
           Net loss                                                                       ($0.58)         ($1.31)
                                                                                          -------         -------
----------------------------------------------------------------------------------- --------------- -----------------
Weighted average common stock outstanding:
----------------------------------------------------------------------------------- --------------- -----------------
         Basic                                                                          9,089,841       7,343,185
                                                                                        ---------       ---------
----------------------------------------------------------------------------------- --------------- -----------------
         Diluted                                                                        9,089,841       7,343,185
                                                                                        ---------       ---------
----------------------------------------------------------------------------------- --------------- -----------------

                                                         -6-
<PAGE>

                                             SILVERSTAR HOLDINGS LIMITED

                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDUTED)

--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                    NINE MONTHS      NINE MONTHS
                                                                                          ENDED            ENDED
                                                                                      MARCH 31,        MARCH 31,
                                                                                           2001             2000
                                                                                                        RESTATED
                                                                                              $                $
--------------------------------------------------------------------------------- ---------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
--------------------------------------------------------------------------------- ---------------- -----------------
         Net income/(loss) from continuing operations                                  (3,781,211)    (2,429,842)
--------------------------------------------------------------------------------- ---------------- -----------------
 ADJUSTMENTS TO RECONCILE NET INCOME/(LOSS) TO NET CASH USED IN OPERATING
 ACTIVITIES:
--------------------------------------------------------------------------------- ---------------- -----------------
         Depreciation and amortization                                                   294,867         189,218
--------------------------------------------------------------------------------- ---------------- -----------------
         Issuance of warrants for consulting fees                                         34,326               -
--------------------------------------------------------------------------------- ---------------- -----------------
         Net loss on sale of assets                                                            -          63,167
--------------------------------------------------------------------------------- ---------------- -----------------
        Changes in operating assets and liabilities, net of discontinued
        Operations                                                                      (699,026)       (613,931)
--------------------------------------------------------------------------------- ---------------- -----------------
         Creation of debenture redemption reserve fund                                   262,500         393,750
--------------------------------------------------------------------------------- ---------------- -----------------
         Equity in losses of affiliates                                                1,320,579                  -
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash used in continuing operations                                                (2,567,965)     (2,397,638)
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash used in discontinued operations                                              (1,114,133)    (13,192,732)
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash used in operating activities                                                 (3,682,098)    (15,590,370)
--------------------------------------------------------------------------------- ---------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
--------------------------------------------------------------------------------- ---------------- -----------------
         Acquisition of intangibles                                                      (49,332)     (1,103,008)
--------------------------------------------------------------------------------- ---------------- -----------------
         Acquisition of property, plant and equipment                                 (1,646,983)     (4,447,356)
--------------------------------------------------------------------------------- ---------------- -----------------
         Decrease in long-term receivables                                             1,188,355               -
--------------------------------------------------------------------------------- ---------------- -----------------
         Acquisition of subsidiary (net of cash of $863,337)                          (3,454,569)              -
--------------------------------------------------------------------------------- ---------------- -----------------
         Proceeds on transactions with minorities                                              -      21,298,860
--------------------------------------------------------------------------------- ---------------- -----------------
         Proceeds on disposal of property, plant and equipment                            74,150          36,445
--------------------------------------------------------------------------------- ---------------- -----------------
         Net proceeds on sale of discontinued operations                              11,102,549               -
--------------------------------------------------------------------------------- ---------------- -----------------
       Other assets acquired                                                                   -          (6,190)
--------------------------------------------------------------------------------- ---------------- -----------------
       Proceeds on other assets sold                                                       1,042               -
--------------------------------------------------------------------------------- ---------------- -----------------
       Loan to affiliate                                                                (250,000)              -
--------------------------------------------------------------------------------- ---------------- -----------------
       Repayment of loan by affiliates                                                   161,500               -
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash provided by investing activities                                              7,126,712      15,778,751
--------------------------------------------------------------------------------- ---------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
--------------------------------------------------------------------------------- ---------------- -----------------
         Short term borrowings, net                                                      (999,883)    (1,476,108)
--------------------------------------------------------------------------------- ---------------- -----------------
         Repayment of long term debt                                                   (7,020,470)    (1,516,732)
--------------------------------------------------------------------------------- ---------------- -----------------
         Treasury stock transactions                                                     (944,300)             -
--------------------------------------------------------------------------------- ---------------- -----------------
         Redemption of preference shares                                               (8,153,928)             -
--------------------------------------------------------------------------------- ---------------- -----------------
         Proceeds on issuance of common stock                                                   -     21,495,634
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash (used in)/provided by financing activities                                   (17,118,581)    18,502,794
--------------------------------------------------------------------------------- ---------------- -----------------
Effect of exchange rate changes on cash                                                (3,981,909)    (1,097,684)
--------------------------------------------------------------------------------- ---------------- -----------------
Net (decrease)/ increase in cash and cash equivalents                                 (17,655,876)    17,593,110
--------------------------------------------------------------------------------- ---------------- -----------------
Cash and cash equivalents at beginning of period                                       29,853,067     20,813,301
                                                                                       ----------     ----------
--------------------------------------------------------------------------------- ---------------- -----------------
Cash and cash equivalents at end of period                                             12,197,191     38,406,792
                                                                                       ==========     ==========
--------------------------------------------------------------------------------- ---------------- -----------------
</TABLE>
                                                         -7-
<PAGE>

                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     FINANCIAL INFORMATION

       Silverstar Holdings Limited, formerly Leisureplanet Holdings Limited (the
       "Company"), was founded on September 6, 1995. The purpose of the Company
       has changed from acquiring and operating South African Companies to one
       of investing in Internet and Technology related industries.

2.     BASIS OF PREPARATION

       The unaudited interim condensed 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 the equity method of accounting. All inter-company accounts and
       significant inter-company transactions have been eliminated in the
       consolidated financial statements.

       Certain information and factual disclosures normally included in
       financial statements prepared in accordance with generally accepted
       accounting principles have been condensed or omitted pursuant to the
       rules and regulations of the Securities and Exchange Commission.

       In the opinion of management, the interim condensed consolidated
       financial statements reflect all adjustments necessary for a fair
       presentation of the interim periods. All such adjustments are of a normal
       recurring nature. The results of operations for the interim period are
       not necessarily indicative of the results of operations to be expected
       for the full year.

       TAXES
       The parent Company is registered in Bermuda, where it is not subject to
       income tax. Each of the Company's subsidiaries is subject to income taxes
       within the jurisdiction in which they operate. The Company's income tax
       provision relates to the operations of its subsidiaries.

       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 and convertible
       debentures. Potential common shares for all periods presented are
       computed utilising the treasury stock method. The effect of potential
       common shares is excluded when the effect of their inclusion would be
       anti-dilutive.

       RECENTLY ISSUED ACCOUNTING STANDARDS
       In June 1998, the FASB adopted SFAS No. 133, as amended by SFAS No. 137
       and SFAS No. 138, "Accounting for Derivative Instruments and Hedging
       Activities." SFAS No. 133 establishes accounting and reporting standards
       requiring that every derivative instrument (including certain derivative
       instruments embedded in other contracts) be recorded in the balance sheet
       as either an asset or liability measured at its fair value and that
       changes in the derivative's fair value be recognised currently in
       earnings unless specific hedge accounting criteria are met. Special
       accounting for qualifying hedges allows derivatives gains and losses to
       offset related results on the hedged item in the income statement and
       requires that the company must formally document, designate and assess
       the effectiveness of transactions that receive hedge accounting. SFAS No.
       133 is effective for fiscal years beginning after June 15, 2000. The
       Company believes that the adoption of this statement has not had a
       significant impact on the results of operations or financial position of
       the Company.

       Staff Accounting Bulletin, "SAB" No. 101 "Revenue Recognition in
       Financial Statements" provides the Securities and Exchange Commission's
       views in applying Generally Accepted Accounting Principles to selected
       revenue recognition issues. SAB 101 is effective no later than the fourth
       quarter of fiscal years beginning after December 15, 1999. The Company
       believes that the adoption of the provision of this SAB will not have any
       significant impact on the continuing results of operations and financial
       position of the Company.

                                       -8-
<PAGE>

                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


       NOTE 2. BASIS OF PREPARATION (CONTINUED)

       RECLASSIFICATIONS

       Certain reclassifications have been made to previously reported results
       to conform to current presentations.

3.     ACQUISITION

       ACQUISITION
       The results of operations of acquisitions are included in the
       consolidated financial statements from the date of acquisition. The costs
       of the acquisitions were allocated on the basis of the estimated fair
       value of the assets acquired and liabilities assumed.

       On November 17, 2000, the Company acquired all of the assets and certain
       liabilities of Fantasy Sports 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 and college
       football fantasy sports games. The acquisition was accounted for as a
       purchase. The intangibles recorded in connection with the acquisition,
       primarily goodwill, are being amortized over their expected useful lives
       between 3 and 10 years.
<TABLE>
<CAPTION>
      ---------------------------- ------------------- -------------- ------------------
                                                         PERCENTAGE          PURCHASE
                                                           ACQUIRED     CONSIDERATION
      SUBSIDIARY/BUSINESS          DATE ACQUIRED                  %                 $
      ---------------------------- ------------------- -------------- ------------------
      ACQUISTION:
      ---------------------------- ------------------- -------------- ------------------
<S>                                         <C>
      Fantasy Sports               November 15,
                                   2000                          100          4,317,905
      ---------------------------- ------------------- -------------- ------------------

     ------------------------------------------------------------------------------------------------- -----------------
                                                                                                            MARCH 31,
                                                                                                                 2001
                                                                                                                    $
     ------------------------------------------------------------------------------------------------- -----------------
     ACQUISITION COSTS
     ------------------------------------------------------------------------------------------------- -----------------
            Cash consideration                                                                              4,317,905
                                                                                                            ---------
     ------------------------------------------------------------------------------------------------- -----------------
     NET ASSETS ACQUIRED
     ------------------------------------------------------------------------------------------------- -----------------
            Cash and cash equivalents                                                                         863,337
     ------------------------------------------------------------------------------------------------- -----------------
            Current assets                                                                                     27,030
     ------------------------------------------------------------------------------------------------- -----------------
            Property, plant and equipment                                                                     193,472
     ------------------------------------------------------------------------------------------------- -----------------
            Intangibles                                                                                     3,732,014
                                                                                                            ---------
     ------------------------------------------------------------------------------------------------- -----------------
                   TOTAL ASSETS                                                                             4,815,853
                                                                                                            ---------
     ------------------------------------------------------------------------------------------------- -----------------
            Current liabilities                                                                               497,948
                                                                                                           ----------
     ------------------------------------------------------------------------------------------------- -----------------
              TOTAL LIABILITIES                                                                               497,948
                                                                                                           ----------
     ------------------------------------------------------------------------------------------------- -----------------
                                                                                                            4,317,905
     ------------------------------------------------------------------------------------------------- -----------------
</TABLE>

                                       -9-

<PAGE>

                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4.     INVENTORIES

         Inventories consist of the following:
<TABLE>
<CAPTION>
      ----------------------------------------------------------------------- ----------------------- --------------------
                                                                                   MARCH 31, 2001           JUNE 30, 2000
                                                                                           $                       $
      ----------------------------------------------------------------------- ----------------------- --------------------
<S>                                                                                  <C>                   <C>
      Finished goods                                                                 403,715               5,147,642
      ----------------------------------------------------------------------- ----------------------- --------------------
      Work in progress                                                                     -                 358,890
      ----------------------------------------------------------------------- ----------------------- --------------------
      Raw materials and ingredients                                                        -               2,701,284
      ----------------------------------------------------------------------- ----------------------- --------------------
      Supplies                                                                             -               1,179,041
      ----------------------------------------------------------------------- ----------------------- --------------------
                                                                                     403,715               9,386,857
                                                                                     =======               =========
      ----------------------------------------------------------------------- ----------------------- --------------------

       The Company sold substantially all of its June 30, 2000 inventories in
       the Lifestyle sale. The inventories at March 31, 2001 relate to the
       Fantasy Sports operations.

5.     INVESTMENTS IN AFFILIATES

       A summary of the impact of these investments on the consolidated
financial statements is presented below:

      ------------------------------------------------------------ ----------------- ---------------------- ------------------
                                                                       EFFECTIVE         MARCH 31, 2001          JUNE 30, 2000
                                                                      PERCENTAGE                 $                      $
                                                                       OWNERSHIP
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
      Investments in and receivables from unconsolidated
      affiliates
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
             HotelSupplyGroup. Com                                            51%                -                183,134
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
             Magnolia Broadband                                               48%          979,519              1,076,338
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
             Advance to Magnolia Broadband                                                 250,000                      -
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
               Hall Lifestyle Products                                        50%                   -              24,463
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
                                                                                         1,229,519              1,283,935
                                                                                         ---------              ---------
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
                                                                                         NINE MONTHS            NINE MONTHS
                                                                                               ENDED                  ENDED
      Equity share of losses of unconsolidated affiliates:                            MARCH 31, 2001         MARCH 31, 2000
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
             HotelSupplyGroup. Com                                            51%          (14,032)                     -
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
             Magnolia Broadband                                               48%       (1,306,547)                     -
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
                                                                                        (1,320,579)                     -
      ------------------------------------------------------------ ----------------- ---------------------- ------------------
</TABLE>
       The Company is amortizing the excess in its investment in Magnolia over
       its proportionate share of the book value of the affiliate over a
       three-year period as an adjustment to equity in losses of affiliates.

                                      -10-
<PAGE>

                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


6.     DISCONTINUED OPERATIONS

       FIRST LIFESTYLE HOLDINGS LIMITED ("LIFESTYLE")
<TABLE>
<CAPTION>
       The following summarizes the operating results of the Lifestyle
discontinued operation:

      ---------------------------------------------------------------------- ---------------- ----------------
                                                                                      NINE             NINE
                                                                                    MONTHS           MONTHS
                                                                                     ENDED            ENDED
                                                                                     MARCH            MARCH
                                                                                       31,              31,
                                                                                      2001             2000
                                                                                                   RESTATED
                                                                                         $                $
      ---------------------------------------------------------------------- ---------------- ----------------
<S>                                                                              <C>              <C>
      Revenue                                                                    28,819,495       73,809,914
      ---------------------------------------------------------------------- ---------------- ----------------
      Operating income                                                           (1,506,371)       6,424,809
      ---------------------------------------------------------------------- ---------------- ----------------
      Net income, net of minority interest of
      $844,273 and $3,022,320                                                    (2,554,492)       3,148,923
      ---------------------------------------------------------------------- ---------------- ----------------

       Lifestyle was sold with effect from November 6, 2000, the date that the
       proceeds for the sale were made available to the shareholders. Therefore
       the results presented above for the nine months ended March 31, 2001
       are for a four-month period.

       LEISUREPLANET.COM ("LPI")

       Due to the lack of investor appetite for loss making Internet businesses,
       no further funding was available to fund the activities of LPI,
       previously Leisureplanet Limited, the Internet travel related business.
       On August 2, 2000 LPI was placed under voluntary administration in the
       United Kingdom. Subsequent to this date, on August 31, 2000 the
       administrator placed LPI into liquidation. The liabilities of LPI exceed
       the assets and, where appropriate, provision has been made for any
       liabilities, contingent or otherwise, which the Company may incur.
       The following summarizes the operating results of the LPI segment:

      ---------------------------------------------------------------------- ---------------- ----------------
                                                                                      NINE             NINE
                                                                                    MONTHS           MONTHS
                                                                                     ENDED            ENDED
                                                                                     MARCH            MARCH
                                                                                       31,              31,
                                                                                      2001             2000
      ---------------------------------------------------------------------- ---------------- ----------------
      Revenue                                                                             -           67,892
      ---------------------------------------------------------------------- ---------------- ----------------
      Operating loss                                                                      -      (15,243,571)
      ---------------------------------------------------------------------- ---------------- ----------------
      Net loss, net of minority share of loss of $nil and $4,868,243                      -      (10,328,746)
      ---------------------------------------------------------------------- ---------------- ----------------
</TABLE>

                                      -11-
<PAGE>

                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


7.     EXTRAORDINARY ITEM

       During the quarter ended March 31, 2001, in two separate transactions,
       the Company purchased and retired $5,750,000 face value of the increasing
       rate subordinated convertible for $5,750,000 plus accrued but not
       accreted interest. During August 2000, the Company received an option to
       retire up to an additional $5.95 million (face value) of the increasing
       rate subordinated convertible debentures at face plus accrued but not
       accreted interest. As a result of these retirements, the Company
       recognized an extraordinary gain of $1.03 million of previously accrued
       but unpaid accreted interest.

8.     CASH FLOWS

       The changes in assets and liabilities consist of the following:
<TABLE>
<CAPTION>
      ---------------------------------------------------------------------- ---------------- ----------------
                                                                                      NINE             NINE
                                                                                    MONTHS           MONTHS
                                                                                     ENDED            ENDED
                                                                                     MARCH            MARCH
                                                                                       31,              31,
                                                                                      2001             2000
                                                                                                   RESTATED
                                                                                         $                $
<S>                                                                               <C>
      ---------------------------------------------------------------------- ---------------- ----------------
      CHANGES IN OPERATING ASSETS AND LIABILITIES, NET OF DISCONTINUED
      OPERATIONS CONSISTS OF THE FOLLOWING:
      ---------------------------------------------------------------------- ---------------- ----------------
      Increase in inventories                                                     (387,812)               -
      ---------------------------------------------------------------------- ---------------- ----------------
      (Increase)/decrease in prepaid expenses and other current assets            (904,921)       1,747,442
      ---------------------------------------------------------------------- ---------------- ----------------
      Increase/(decrease) in accounts payable and bank overdraft                   264,488       (1,729,104)
      ---------------------------------------------------------------------- ---------------- ----------------
      Increase/(decrease) in other provisions and accruals                         329,219         (632,495)
      ---------------------------------------------------------------------- ---------------- ----------------
      Increase in other taxes payable                                                    -            1,446
      ---------------------------------------------------------------------- ---------------- ----------------
      Increase in income taxes payable                                                   -           (1,220)
      ---------------------------------------------------------------------- ---------------- ----------------
                                                                                  (699,026)        (613,931)
                                                                                  =========        ---------
      ---------------------------------------------------------------------- ---------------- ----------------
      NET CASH USED IN DISCONTINUED OPERATIONS CONSISTS OF THE FOLLOWING:
      ---------------------------------------------------------------------- ---------------- ----------------
      Net income/(loss) of discontinued operations:                             (2,831,828)      (7,179,823)
      ---------------------------------------------------------------------- ---------------- ----------------
      Net gain on transactions with minorities                                           -       (4,943,020)
      ---------------------------------------------------------------------- ---------------- ----------------
      Depreciation and amortization                                                950,388        4,148,716
      ---------------------------------------------------------------------- ---------------- ----------------
      Minority share of (losses)/gains                                             844,273       (1,845,923)
      ---------------------------------------------------------------------- ---------------- ----------------
      Equity in losses of affiliates                                                13,579                -
      ---------------------------------------------------------------------- ---------------- ----------------
      Net loss on sale of assets                                                    21,278                -
      ---------------------------------------------------------------------- ---------------- ----------------
      Changes in assets and liabilities                                           (405,840)      (7,042,813)
      ---------------------------------------------------------------------- ---------------- ----------------
      Movement in deferred income taxes                                            294,017          612,609
      ---------------------------------------------------------------------- ---------------- ----------------
      Shares to be issued                                                                -        3,057,522
      ---------------------------------------------------------------------- ---------------- ----------------
                                                                                (1,114,133)     (13,192,732)
      ---------------------------------------------------------------------- ---------------- ----------------
</TABLE>

                                      -12-
<PAGE>


                           SILVERSTAR HOLDINGS LIMITED

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9.     COMMITMENTS AND CONTINGENCIES

       The Company has guaranteed the banking facilities of certain of its
       former subsidiaries. These guarantees amount to $1,580,000 and expire
       March 1, 2003.

       The future minimum non-cancellable operating lease payments are not
       material.

10.    PER SHARE DATA

       Basic and diluted loss per share from continuing operations was computed
       by dividing the loss from continuing operations by the weighted average
       number of common shares outstanding during the period. Accordingly, the
       Company's presentation of diluted loss per share is the same as that of
       basic loss per share.

       At March 31, 2001, 1,615,000 stock options and Warrants were outstanding
       and an additional 1,263,158 shares of Class A common stock were reserved
       for possible future issuance in connection with the increasing rate
       convertible debentures. These securities that could potentially dilute
       earnings per share in the future were not included in the computation of
       diluted earnings per share because to do so would have been anti-dilutive
       for the periods presented.

11.    TREASURY STOCK

       During the quarter ended March 31, 2001, the Company purchased 853,766
       shares of Class A common stock. The Company paid an average of $0.85 per
       share. The Company paid a low of $0.70 and a high of $1.01 per share. The
       Company is cancelling the shares as it repurchases them


                                      -13-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

BACKGROUND AND HISTORY

Silverstar Holdings Limited, formerly Leisureplanet 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, 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.

The Company has disposed of First Lifestyle Holdings Limited ("Lifestyle"), the
holding company of its last remaining South African operating subsidiaries. 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 shareholders. Regulatory approval was obtained
from the South African monopolies commission on October 12, 2000. Proceeds from
the sale were received on November 6, 2000.

The Company was unable to obtain additional financing to fund the activities of
Leisureplanet.com ("LPI"), the Internet travel related business. On August 2,
2000 LPI was placed under voluntary administration in the United Kingdom. Full
provision was made for the Company's investment in LPI in the accounts for the
year ended June 30, 2000.

On November 17, 2000, the Company acquired all of the assets and certain
liabilities of Fantasy Sports 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 and college football fantasy sports games.

Company's management has ceased funding Hotelsupply Goup, Inc. As a result it
discontinued operations in April, 2001. No recovery is expected.

RESULTS OF OPERATIONS

The results exclude the operations of Lifestyle and LPI. Discussion of these
results of the operations is given under the heading, DISCONTINUED OPERATIONS,
below.

QUARTER ENDED MARCH 31, 2001 AS COMPARED TO QUARTER ENDED MARCH 31, 2000

REVENUES

       Fantasy Sports generated revenues of $511,900 for the three months ended
       March 31, 2001. Its revenues are seasonal (based on the NASCAR and
       college football seasons) which stretch from mid February to the end of
       November. Fantasy Sports collects its revenues at the beginning and mid
       point of the NASCAR and beginning of the college football seasons.
       Fantasy Sports defers the receipts and recognizes the revenues pro-rata
       over the season. Fantasy Sports was acquired in November 2000. As such,
       there are no revenues for the prior year period.

                                      -14-
<PAGE>


QUARTER ENDED MARCH 31, 2001 AS COMPARED TO QUARTER ENDED MARCH 31, 2000
(CONTINUED)

COST OF SALES

       Cost of sales increased from 0 for the three months ended March 31, 2000
       to $404,107 for the comparable period in 2001. This increase was due to
       the acquisition of Fantasy Sports. Fantasy Sports accrues certain
       expenses that relate to the entire NASCAR and college football season
       over the related season.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

       Selling, general and administrative expenses increased to $1.29 million
       from $0.46 million during the comparable period in 2000. This increase is
       due to the inclusion of Fantasy Sports operations. Fantasy Sports' SG&A
       expenses are seasonal with a marked increase in these expenses during the
       first 3 months of the calendar year as the company actively promotes and
       advertises its new games for the upcoming year.

AMORTIZATION OF INTANGIBLES

       Amortization of intangibles increased from $0.07 million for the three
       months ended March 31, 2000 to $0.11 million in the three months ended
       March 31, 2001. This increase is primarily due to the amortization of
       goodwill that arose on the investment in Fantasy Sports.

DEPRECIATION

       The depreciation increased to $9,901 for the three months ended March 31,
       2001 compared to $1,297 for the period ended March 31, 2000. The primary
       reason for the increase in depreciation charge relates to the acquisition
       of Fantasy Sports.

EQUITY IN LOSSES OF AFFILIATES

       The Company acquired a 48% stake in Magnolia Broadband. This company is a
       start-up venture, which has only incurred expenses to date. The charge of
       $0.39 million represents the Company's equity accounted share of the
       operating losses for the period and amortization of related goodwill.

INTEREST EXPENSE/INCOME

       Interest income of $0.40 million represents interest earned on the cash
       invested in interest bearing accounts and interest earned on notes
       related to the divestiture of the Lifestyles businesses. Interest
       expenses decreased to $0.13 million from $0.15 million during the prior
       fiscal year. This decrease was primarily due to the retirement of
       outstanding debt.

FOREIGN CURRENCY LOSS

       Foreign currency loss of $0.98 million represents the loss realized on
       the translation of the net assets of First South African Holdings (Pty)
       Ltd (FSAH), the South African investment subsidiary offset by realized
       currency hedging profits. Prior to June 30, 2000, these amounts were
       treated as permanent advances to FSAH from the Company and the
       translation gain or loss was recognized within stockholders' equity.
       Since the divestiture of Lifestyle, the Company began recognizing
       translation gains or losses on the exposure of net assets and liabilities
       denominated in South African Rand, within its results of operations.

DISCONTINUED OPERATIONS

       The prior year quarter included losses relating to LPI and Lifestyles.
       LPI went into administration on August 2, 2000 and no further operating
       losses were recorded as the remaining assets and liabilities were fully
       provided for at June 30, 2000. Lifestyle was sold during the quarter
       ended December 31, 2000, hence all losses were provided for in 2000.

                                      -15-
<PAGE>

QUARTER ENDED MARCH 31, 2001 AS COMPARED TO QUARTER ENDED MARCH 31, 2000
(CONTINUED)

EXTRAORDINARY ITEM-GAIN ON EXTINGUISHMENT OF DEBT

       The Company negotiated agreements with two lenders to retire $5.75
       million of debentures at face plus accrued interest. As a result, the
       Company recorded a gain on previously accrued sinking fund interest of
       $1.03 million in the quarter ended March 31, 2001. No such transaction
       occurred in the quarter ended March 31, 2000.

NET LOSS

       As a result of the above, the Company had a loss of $.44 million in the
       current quarter as compared to a loss of $4.57 million in the quarter
       ended March 31, 2000.

NINE MONTHS ENDED MARCH 31, 2001 AS COMPARED TO NINE MONTHS ENDED MARCH 31, 2000

REVENUES

       Fantasy Sports generated revenues of $511,900 for the three months ended
       March 31, 2001. Its revenues are seasonal (based on the NASCAR and
       college football seasons) which stretch from mid February to the end of
       November. Fantasy Sports collects its revenues at the beginning and mid
       point of the NASCAR and beginning of the college football seasons.
       Fantasy Sports defers the receipts and recognizes the revenue pro-rata
       over the season. Fantasy Sports was acquired in November 2000. As such,
       there are no revenues for the prior year period.

COST OF SALES

       Cost of sales increased from 0 for the three months ended March 31, 2000
       to $404,107 for the comparable period in 2001. This increase was due to
       the acquisition of Fantasy Sports. Fantasy Sports accrues certain
       expenses that relate to the entire NASCAR and college football season
       over the related season.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

       Selling, general and administrative expenses increased to $2.2 million
       for the nine months ended March 31, 2001 from $1.16 million during the
       comparable period in 2000. This increase is due to the inclusion of
       Fantasy Sports operation. Fantasy Sports' SG&A expenses are seasonal with
       a marked increase in these expenses during the first 3 months of the
       calendar year as the company actively promotes and advertises its new
       games for the upcoming year.

AMORTIZATION OF INTANGIBLES

       Amortization of intangibles increased from $0.18 million for the nine
       months ended March 31, 2000 to $0.25 million in the nine months ended
       March 31, 2001. This increase is primarily due to the amortization of
       goodwill that arose on the investments in Fantasy Sports.

DEPRECIATION

       The depreciation increased to $17,925 for the nine months ended March 31,
       2001 compared to $4,366 for the period ended March 31, 2000. The primary
       reason for the increase in depreciation charge relates to the acquisition
       of Fantasy Sports.

EQUITY IN LOSSES OF AFFILIATES

       The Company acquired a 48% stake in Magnolia Broadband, which has only
       incurred expenses to date. The charge of $1.32 million represents the
       Company's equity accounted share of their operating losses for the period
       and amortization of goodwill.

                                      -16-
<PAGE>


NINE MONTHS ENDED MARCH 31, 2001 AS COMPARED TO NINE MONTHS ENDED MARCH 31, 2000
(CONTINUED)

INTEREST EXPENSE/INCOME

       Interest income of $1.27 million represents interest earned on the cash
       invested in interest bearing accounts and interest earned on notes
       related to the divestiture of the Lifestyles businesses. Interest
       expenses decreased to $0.54 million from $1.13 million during the prior
       fiscal year. This decrease was primarily due to the retirement of
       outstanding debt.

FOREIGN CURRENCY LOSS

       Foreign currency loss of $0.89 million represents the loss realized on
       the translation of the net assets of First South African Holdings (Pty)
       Ltd (FSAH), the South African investment subsidiary netted against
       realized currency hedging profits. Prior to June 30, 2000, these amounts
       were treated as permanent advances to FSAH from the Company and the
       translation gain or loss was recognized within stockholders' equity.
       Since the divestiture of Lifestyle, the Company began recognizing
       translation gains or losses on the exposure of net assets and liabilities
       denominated in South African Rand, within its results of operations.

DISCONTINUED OPERATIONS

       The prior year period included losses relating to LPI and Lifestyles. LPI
       went into administration on August 2, 2000 and no further operating
       losses were recorded as the remaining assets and liabilities were fully
       provided for at June 30, 2000. The loss on disposal of discontinued
       operations generated by Lifestyle relates primarily to translation losses
       incurred prior to the final sale that resulted from declines in the South
       African Rand.

GAIN ON EXTINGUISHMENT OF DEBT

       The Company negotiated agreements with two lenders to retire $5.75 of
       debentures at face plus accrued interest. As a result, the Company
       recorded a gain on previously accrued sinking fund interest of $1.03
       million in the nine months ended March 31, 2001. No such transaction
       occurred in the nine months ended March 31, 2000.

NET LOSS

       As a result of the above, the Company had losses of $5.31 million in the
       nine months ended March 31, 2001 as compared to a loss of $9.61 million
       during the nine months ended March 31, 2000.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

       Cash decreased by $17.66 million from $29.85 million to $12.20 million.
       The net cash generated from the sale of Lifestyle net of the acquisition
       of property plant and equipment by Lifestyle was $9.46 million. The uses
       of cash included the redemption of preference shares of $8.15 million,
       the acquisition of Fantasy Sports for $3.45 million, repayments of debt
       of $7.95 million the repurchase of stock of $.94 and other movements of
       $6.63 million including exchange rate change effects on cash and the
       funding of operations. In addition to the cash received from the sale of
       Lifestyle, the Company received a note for a total of R52 million, a
       portion of which is considered contingent consideration (see below).

       The amount of debt outstanding at December 31, 2000 is comprised of $12
       million face value of the increasing rate subordinated convertible
       debentures and $2.31 million of related interest, substantially all of
       which represents accreted interest on the debentures. During August 2000,
       the Company received an option to retire up to $10.95 million (face
       value) of the increasing rate subordinated convertible debentures at face
       plus accrued but not accreted interest. On January 22, 2001 and February
       23, 2001, the Company paid $5.0 and $0.75 respectively to retire $5.75
       million face value of these debentures. As a result of these retirements,
       the Company recognized an extraordinary gain of $1.03 million of
       previously accrued but unpaid accreted interest. The Company intends to
       retire an additional $5.95 million (face value) prior to the expiration
       of the option in May, 2001. If the Company does exercise the option on
       the remaining amount, it will eliminate an obligation to pay a further
       $1.33 million of accrued but unpaid accreted interest as of March 31,
       2001.

                                      -17-
<PAGE>

       The Company has recorded three notes as receivables (each denominated in
       South African Rand) totaling $5.50 million at March 31, 2001. Since these
       notes are denominated in South African Rand, they are subject to foreign
       currency risk detailed below. These notes are all interest bearing.
       Although management believes that these notes are fully collectible, one
       of the notes, which was part of the consideration for the sale of
       Lifestyle described above, was recorded net of its contingent
       consideration of $2.64 million. The contingent portion is subject to
       certain performance requirements of the obligee.

       As of May 10, 2001 the Company's cash balance was sufficient to pay off
       all liabilities.

FUTURE COMMITMENTS

       The Company intends to continue to pursue an acquisition strategy in
       companies utilizing Internet and technology platforms to grow their
       business and anticipates utilizing a substantial portion of its remaining
       cash balances to fund this strategy to the extent that suitable
       acquisition candidates can be identified. On November 17, 2000 the
       Company acquired all of the assets and certain liabilities of the Fantasy
       Sports division of Goracing Interactive Services Inc, for a net purchase
       price of $3.45 million.

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

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. Substantially all
       of the Company's cash balances are not insured by the Federal Depository
       Insurance Corporation. Management has invested the funds in financial
       institutions that have strong financial positions.

       INTEREST RATE RISK

       At March 31, 2001, the Company's cash resources earned interest at
       variable rates. Accordingly, the Company's return on these funds is
       affected by fluctuations in interest rates. The debt of the continuing
       operations is primarily at fixed 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

       The Company continues to have investments that are denominated in South
       African Rands. This exposes the Company to market risk with respect to
       fluctuations in the relative value of the South African Rand against the
       US Dollar. The Company does not currently hedge the currency risk. Every
       1% decline in the Rand/US Dollar exchange rate will result in a $1,000
       loss on a $100,000 investment in South Africa. Subsequent to the
       quarter-end the Rand has depreciated against the US Dollar by
       approximately 1.0% to May 13, 2000.

                                      -18-
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)    Exhibits

              None.

       (b)    Reports on Form 8-K filed during quarter ended March 31, 2001:

              None.


                                      -19-
<PAGE>





                                   SIGNATURES

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

Date:  May 15, 2001
                                         SILVERSTAR HOLDINGS, LTD.



                                         /s/ Clive Kabatznik
                                         --------------------------
                                         Clive Kabatznik
                                         Chief Executive Officer, President and
                                         Chief Financial Officer

                                      -20-