**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
      10-K/A**


**(Amendment
      No. 1)**







(Mark
      One)


**[X]** **ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE** ****


**SECURITIES** **EXCHANGE
      ACT OF 1934**




For
      the
      fiscal year ended December 31, 2005






**[  ]** **TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE** ****


**SECURITIES** **EXCHANGE
      ACT OF 1934**


For
      the
      transition period from ___________ to ___________





Commission
      File Number 0-16423




**SAN
      Holdings, Inc.**




(Exact
      name of registrant  as
      specified in its Charter)




**Colorado**
            
            
            **84-0907969**(State
                of incorporation)
            
            
            (I.R.S.
                Employer
              Identification
                No.)




9800
                  Pyramid Court, Suite 130, Englewood,
                  CO 80112
              (303)
                  660-3933(Address
                  including zip code, area code and telephone number of Registrant’s
                  principal executive offices.)Securities
                  registered pursuant to Section 12(b) of the
                  Act:      NoneSecurities
                  registered pursuant to Section 12(g) of the Act:




Title
                of Each Class
            
            Name
                of Each Exchange on Which RegisteredCommon
                stock, no par value
            
            OTC
                Bulletin Board




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes [ ] No [X ]




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act. Yes [ ] No [X ]




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
      past 12 months (or for such shorter period that the registrant was required
      to
      file such reports), and (2) has been subject to such filing requirements for
      the
      past 90 days. Yes [X]  No [  ]




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







Indicate
      by checkmark whether the registrant is a large accelerated filer, an accelerated
      filer, or a non-accelerated filer See definition of “accelerated filer and large
      accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one) Large
      accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer
      [X]




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes [ ] No[X]




The aggregate market value of the voting and non-voting common equity held by
      non-affiliates of
      the
      registrant, computed
      by reference to the
      average closing bid and asked prices the
      price
      at which the common equity was last sold as of the last business day of the
      registrant’s most recently completed second fiscal quarter (June 30,
      2005) ,
      was
      approximately  $8.8
      million.




As
      of
      March 23, 2006, 95,811,278 shares of the registrant’s common stock were
      outstanding.





DOCUMENTS
      INCORPORATED BY REFERENCE: None.




















**SAN
      HOLDINGS, INC.**


**FORM
      10-K/A**


**TABLE
      OF CONTENTS**






**Item
                  No.**Explanatory
                  Note
              2Forward-Looking
                  Statements
              2


**Part
      III**





10.
            
            
            Directors
                and Executive Officers of the Registrant
            211.
            
            
            Executive
                Compensation
            512.
            
            
            Security
                Ownership of Certain Beneficial Owners and Management
              and
                Related Stockholder Matters
            713.
            
            
            Certain
                Relationships and Related Transactions
            914.
            
            
            Principal
                Accountant Fees and Services
            11





**Part
      IV**


15.
              
              
              Exhibits
                    and Financial Statement Schedules
              12


1





**EXPLANATORY
      NOTE**





On
      April
      11, 2006, SAN Holdings, Inc. (the “Company”) filed with the Securities and
      Exchange Commission (“SEC”) its Annual Report on Form 10-K for the fiscal year
      ended December 31, 2005 (the “Original Filing”). In accordance with the SEC
      rules, the Company incorporated by reference Part III of the Original Filing
      from the definitive proxy statement to be filed by the Company in connection
      with the annual shareholder meeting for 2006, which the Company anticipated
      filing within 120 days of the end of its fiscal year ended December 31,
      2005.





Since
      the
      date of the Original Filing, the Company has determined that it will not file
      its definitive proxy statement by the 120 day deadline and, in accordance with
      SEC rules, must file an amendment to its Original Filing to include the
      disclosures required by Part III of Form 10-K. This Amendment No. 1 on Form
      10-K/A (the “Form 10-K/A”) to the Original Filing is being filed to include the
      information required to be disclosed under Part III of Form 10-K. In addition,
      pursuant to Rule 12b-15 promulgated under the Securities Exchange Act of 1934,
      as amended, the Form 10-K/A includes currently dated certifications from the
      Company’s Chief Executive Officer and Chief Financial Officer, as required by
      Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications
      of
      the Company’s Chief Executive Officer and Chief Financial Officer are attached
      to this Form 10-K/A as Exhibits 31.01, 31.02, 32.01 and 32.02. Except for the
      foregoing amended information, this Form 10-K/A continues to speak as of the
      date of the Original Filing, and the Company has not updated the disclosures
      contained herein to reflect events that occurred at a later date.





**FORWARD-LOOKING
      STATEMENTS**





This report contains
      “forward-looking statements” within the meaning of the Private Securities
      Litigation Reform Act of 1995. In many but not all cases you can identify
      forward-looking statements by words such as “ anticipate ,”
      “ believe ,”
      “ could ,”
      “ estimate ,”
      “ expect,”
      “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the
      negative of these terms or other similar
      expressions.  These
      forward-looking statements include statements regarding our expectations,
      beliefs, or intentions about the future, and are based on information available
      to us at this time. We assume no obligation to update any of these statements
      and specifically decline any obligation to update or correct any forward-looking
      statements to reflect events or circumstances after the date of such statements
      or to reflect the occurrence of anticipated or unanticipated events. Actual
      events and results could differ materially from our expectations as a result
      of
      many factors, including those identified in the section titled “ Item 1A. Risk
      Factors” and
      other sections of this report .
      We urge
      you to review and consider those factors, and those identified from time to
      time
      in our reports and filings with the SEC ,
      for
      information about risks and uncertainties that may affect our future results.
      All forward-looking statements we make after the date of this filing are also
      qualified by this cautionary statement and identified risks.





**PART
      III**





**Item
      10. Directors and Executive Officers of the Registrant**





Our
      bylaws provide that our Board of Directors shall consist of no more than 14
      members, with the exact number to be set by board resolution. During the fiscal
      year ended December 31, 2005, the number of directors was set at 10. Each
      director’s term is until the next annual meeting of shareholders and until his
      or her successor is elected and qualified or until such director’s earlier
      death, resignation or removal. Vacancies on the Board of Directors may be filled
      by a majority of the remaining directors. Directors elected to fill vacancies
      serve until the next annual meeting of shareholders.




Biographical
      information about our officers and directors is as follows:





***John
      Jenkins*** ,
      Age 55,
      Chairman and CEO since November 2000, President since November 2004. From
      January 1995 through June 2000, Mr. Jenkins was CEO, president and a director
      of
      TAVA Technologies, Inc., a publicly held company, where he led the build-out
      of
      a national systems integration business. In 1999, TAVA was sold in a cash
      transaction approved by TAVA shareholders. From 1990 until he joined TAVA in
      1995, he served as president of Morgan Technical Ceramics, Inc., a wholly-owned
      subsidiary of Morgan Crucible plc, a diversified industrial products company
      based in England and publicly-traded on the London stock exchange. Mr. Jenkins
      holds a B.S. from the University of Washington and a J.D. from the University
      of
      Denver.





2


***Marc
      J. Leder*** ,
      Age 44,
      Director since April 2003, pursuant to our acquisition agreement with Solunet
      Storage. Mr. Leder has served as a managing director of Sun Capital Partners,
      Inc., a private investment firm, since 1995. Prior to founding Sun Capital
      Partners, Inc. (with Mr. Krouse) in 1995, Mr. Leder served in various capacities
      with Lehman Brothers, an investment bank based in New York City, most recently
      as Senior Vice President. Mr. Leder also currently serves as a director of
      LOUD
      Technologies, Inc., which is a publicly held company.





***Rodger
      R. Krouse*** ,
      Age 44,
      Director since April 2003, pursuant to our acquisition agreement with Solunet
      Storage. Mr. Krouse has served as a managing director of Sun Capital Partners,
      Inc. since 1995. Prior to founding Sun Capital Partners, Inc. (with Mr. Leder)
      in 1995, Mr. Krouse served in various capacities with Lehman Brothers, an
      investment bank based in New York City, most recently as Senior Vice President.
      Mr. Krouse currently serves as a director of LOUD Technologies, Inc., which
      is a
      publicly held company.





***Clarence
      E. Terry*** ,
      Age 59,
      Director since April 2003. Mr. Terry also serves as Chairman of the Compensation
      Committee. Mr. Terry has served as a managing director of Sun Capital Partners,
      Inc. since 1999. From October 1973 to September 1999, he was principally
      employed as vice president of Rain Bird Sprinkler Manufacturing Corporation,
      a
      leading irrigation manufacturer. Currently, he also serves as a director of
      LOUD
      Technologies, Inc., which is a publicly held company.





***T.
      Scott King*** ,
      Age 53,
      Director since May 2005. Mr. King has served as a managing director of Sun
      Capital Partners, Inc. since 2003. Prior to joining Sun Capital in 2003, Mr.
      King was CEO of Waterlink, Inc. from May 1999 to November 2002 and previously
      was President of the Consumer Division for The Sherwin Williams Company from
      September 1977 to December 1998. Currently, he also serves as a director of
      LOUD
      Technologies, Inc., which is a publicly held company.





***Stephen
      G. Marble*** ,
      Age 42,
      Director since October 2004. Mr. Marble has served as a vice president of Sun
      Capital Partners, Inc. since February 2004. Prior to joining Sun Capital, he
      served as Chief Financial Officer of Catalina Lighting, Inc., a Sun Capital
      portfolio company. Prior to being appointed CFO, he served as Catalina’s
      Corporate Controller. Mr. Marble’s experience spans a broad variety of
      industries including banking, mortgage banking, specialty finance, equipment
      leasing and medical services. Mr. Marble is a CPA and began his career with
      Deloitte and Touche.





***M.
      Steven Liff*** ,
      Age 34,
      Director since April 2004. Mr. Liff has served as a principal of Sun Capital
      Partners, Inc. since March 2000. From 1994 until joining Sun Capital Partners,
      Inc., he was employed by Bank of America Commercial Finance, most recently
      as
      senior marketing executive, focusing on marketing, underwriting and closing
      new
      leveraged and turnaround transactions.





***Gary
      F. Holloway*** ,
      Age 54,
      Director and member of the Compensation Committee since April 2004. Mr. Holloway
      is vice chairman of Five Mile Capital Partners, a privately held investment
      firm. Prior to joining Five Mile Capital Partners and Five Mile Ventures in
      2000, Mr. Holloway served as the chairman of the board of Greenwich Capital
      Markets, Inc., where he previously held the position of president and CEO.
      He
      also served as co-CEO of Greenwich NatWest. Mr. Holloway currently serves on
      the
      Boards of Directors of Aviation Facilities Corporation, CaseNex, LLC, The
      Wireless Generation, Inc., and the boards of several educational and charitable
      organizations. Mr. Holloway holds a BA degree from Washington and Lee University
      and an MBA from the Colgate Darden School at the University of
      Virginia.





***C.
      Daryl Hollis*** ,
      62,
      Director and Chairman of the Audit Committee since April 2004. Mr. Hollis,
      a
      certified public accountant, has been a business consultant since 1998. He
      has
      served in the past as Executive Vice President and Chief Financial Officer
      of
      The Panda Project, Inc., a developer, manufacturer and marketer of proprietary
      semiconductor packaging and interconnect devices, and as Senior Vice President
      and Chief Financial Officer of Pointe Financial Corporation, a bank holding
      company. Mr. Hollis was also a partner with Ernst & Young LLP from 1977
      through 1990. Additionally, he currently serves as a director and chairs the
      audit committee of Medical Staffing Network Holdings, Inc. and LOUD
      Technologies, Inc., which are publicly held companies.





3


***George
      R. Rea*** ,
      Age 67,
      Director and member of the Audit Committee since April 2004. Mr. Rea is
      currently a business consultant. Mr. Rea has held various senior management
      positions in several high technology companies, retiring as executive vice
      president of Conner Peripherals (NYSE) in 1994. Since retiring, Mr. Rea has
      served as a business consultant and as a director of private and public
      companies in high technology and other industries. Currently he is a director
      of
      LOUD Technologies, Inc., which is a publicly held company.





***Robert
      C. Ogden*** ,
      Age 45,
      Vice President Finance, Treasurer, Secretary and Chief Financial Officer since
      May 2004. From 2000 to February 2004 (when he joined the Company as a
      consultant), Mr. Ogden was a financial consultant serving companies in a variety
      of industries, including software, computer hardware, on-line education and
      financial services. In 2003, he served as the Acting Controller for Exabyte
      Corporation, a computer tape drive manufacturer. From 1997 to 2000, he served
      as
      Vice President, Corporate Controller and Chief Accounting Officer for TAVA
      Technologies, Inc., a publicly held national systems integration and software
      firm, which was successfully sold in 1999. Prior to TAVA Technologies, Mr.
      Ogden
      held various senior management finance positions with several start-up
      companies. He began his career as a public accountant with Price Waterhouse.
      Mr.
      Ogden holds a B.S. in Commerce from the University of Virginia, and is a
      certified public accountant.





**Committees
      of the Board**





Our
      Board
      of Directors has established three committees, including a compensation
      committee, an audit committee and an independent committee. The following is
      a
      description of each of the committees.





***Compensation
      Committee*** .





The
      compensation committee in 2005 consisted of one independent director, Mr.
      Holloway, as well as Mr. Jenkins and Mr. Terry. Mr. Terry served as chairman.
      The compensation committee met two times and acted by written consent two times
      in 2005. The Board expects to revise the membership of the compensation
      committee in connection with the voting agreement signed by Sun Solunet. See
      “Item 13. Certain Relationships and Related Transactions.”





The
      compensation committee advises the Board of Directors on all matters pertaining
      to compensation programs and policies, establishes guidelines for employee
      incentive and benefit programs, makes specific recommendations to the Board
      of
      Directors relating to salaries and incentive awards of the senior executive
      officers, reviews recommendations of the senior executive officers regarding
      salaries of the other officers of the Company and administers any incentive
      compensation and/or equity-based plan established by the Board of Directors.





***Audit
      Committee; Audit Committee Financial Expert*** .





The
      audit
      committee was established in accordance with Section 3(a)(58)(A) of the
      Securities Exchange Act of 1934, as amended (the “1934 Act”). The audit
      committee in 2005 consisted of two directors, Messrs. Hollis and Rea. The
      chairman of the audit committee is Mr. Hollis. Our Board of Directors has
      determined that Mr. Hollis is an “audit committee financial expert” and that he
      is independent. The audit committee met four times in 2005. The Board expects
      to
      revise the membership of the audit committee in connection with the voting
      agreement signed by Sun Solunet. See “Item 13. Certain Relationships and Related
      Transactions.”





***Independent
      Committee*** .





The
      independent committee currently consists of four directors, Messrs. Jenkins,
      Holloway, Hollis and Rea, all of our directors that are not affiliated with
      Sun
      Solunet, our majority Shareholder, for purposes of approving certain
      transactions as may be submitted by our Board of Directors from time to time.
      The independent committee met one time and acted by written consent two times
      in
      2005.





4


**Code
      of Ethics**





Our
      Board
      of Directors adopted a code of business conduct and ethics applicable to our
      directors, officers, including our principal executive officer, principal
      financial officer and principal accounting officer as well as our employees
      in
      accordance with applicable rules and regulations of the SEC. The code of ethics
      was previously filed with the SEC as Exhibit 14.1 to our Quarterly Report on
      Form 10-Q for the fiscal quarter ended March 31, 2004, filed on May 11, 2004.
      We
      will provide to any person, without charge, upon request, a copy of such code
      of
      ethics. Requests should be made by calling (303) 660-3933 or by submitting
      a
      request in writing to the Company at 9800 Pyramid Court, Suite 130, Englewood,
      CO 80112, Attention: Robert C. Ogden.





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





Section
      16(a) of the 1934 Act requires our officers and directors, and the persons
      who
      own more than 10% of our Common Stock, to file with the SEC initial reports
      of
      ownership and reports of changes in ownership of our Common Stock. Officers,
      directors and greater than 10% Shareholders are required by regulation of the
      SEC to furnish us with copies of all Section 16(a) forms they file.





Based
      solely on a review of copies of Forms 3, 4 and 5, and the amendments thereto,
      received by us for the year ended December 31, 2005, or written representations
      from certain reporting persons that no Forms 5 were required to be filed by
      those persons, we believe that during the year ended December 31, 2005, all
      filing requirements were complied with by our executive officers, directors
      and
      beneficial owners of more than 10% of our stock.





**Item
      11. Executive Compensation**





***Executive
      Compensation***




The
      following table sets forth the salary and other compensation paid to our Chief
      Executive Officer and our other executive officer (“ **named
      executive officers** ”)
      for
      the fiscal years ended December 31, 2005, 2004 and 2003.




***Summary
                  Compensation
                  Table*****Annual
                  Compensation**
              
              **Long
                  Term Compensation****Name
                  and Principal Position**
              
              **YEAR**
              
              **Salary
                  ($)**
              
              **Bonus
                  ($)**
              
              **Securities
                  Underlying Options/SARs(#)**
              
              **All
                  Other Compensation ($)**John
                  Jenkins
              
              
              2005
              
              $
              227,976
              
              $
              -0-
              
              
              -0-
              
              $
              -0-President
                  and CEO (1)
              
              
              2004
              
              $
              227,488
              
              $
              8,694
              
              
              -0-
              
              $
              -0-2003
              
              $
              227,867
              
              $
              6,600
              
              
              1,100,000(1
              )
              $
              5,500(2
              )Robert
                  C. Ogden
              
              
              2005
              
              $
              156,250
              
              $
              -0-
              
              
              100,000(4
              )
              $Vice
                  President - Finance & CFO (5)
              
              
              2004
              
              $
              96,667
              (3)
              $
              2,134
              
              
              350,000(5
              )
              $
              -0-


(1)
            These
                options are exercisable at $0.40 per share. One fourth of the total
                options granted become exercisable each year over a four year period,
                commencing on April 1, 2004.(2)
            Consists
                solely of company matching contributions to 401(k) defined contribution
                plan, available to all employees of the company following 90 days
                of full
                time employment. Amounts earned in the stated year were paid in the
                following year.(3)
            Represents
                compensation paid since May 3, 2004, when Mr. Ogden became employed
                by
                SANZ as Vice President - Finance and Chief Financial
                Officer.(4)
            These
                options are exercisable at $0.34 per share.(5)
            250,000
                of these options are exercisable at $0.42 per share; 100,000 of these
                options are exercisable at $0.38 per
                share.





5


***Option
      and Stock Appreciation Right Grants in Last Fiscal
      Year***




The
      following table sets forth information regarding the grant of options and stock
      appreciation rights during the year ended December 31, 2005 to each of our named executive
      officers .





**Name**
            
            **Number
                of Securities**
              **Underlying
                Options/ SARs**
              **granted
                (#)**
            
            **Percent
                of total options/**
              **SARs
                granted to employees**
              **in
                fiscal year (%)**
            
            **Exercise
                or**
              **base
                price**
              **($/Sh)**
            
            **Expiration**
              **date**John
                Jenkins
            
            
            -0-
            
            
            --
            %
            $
            --
            
            
            --Robert
                C. Ogden
            
            
            100,000
            
            
            6.5
            %
            $
            0.34
            
            
            03/29/2015





***Aggregated
      Option/SAR Exercises in Last Fiscal Year***


***and
      FY-End Option/SAR Values***




The
      following table shows the number of Shares of Common Stock underlying
      unexercised options held at December 31, 2005 by each of our
      named executive officers ,
      and the
      aggregate dollar value of in-the-money, unexercised options held at the end
      of
      the fiscal year. The Company has not granted any stock appreciation rights.





**Name**
            **Number
                of Securities Underlying**
              **Unexercised
                Options/SARs**
              **at
                FY-End (#)**
              **Exercisable/Unexercisable
                (1)**
            **Value
                of unexercised**
              **in-the-money
                options**
              **at
                FY-end ($)**
              **Exercisable/Unexercisable
                (2)**John
                Jenkins
            1,350,000
                / 550,000
            $
                -0- / $ -0-Robert
                C. Ogden
            112,500 / 337,500
            $
                -0- / $ -0-





(1)
            Includes
                both “in-the-money” and “out-of-the-money” options. “In-the-money” options
                are options with exercise prices below the market price of the Company’s
                Common Stock (as noted) on December 31, 2005.(2)
            Fair
                market value of the Company’s Common Stock on December 30, 2005, the last
                trading day of fiscal 2005 ($0.19, based on the closing sales price
                reported on theover-the-counter
                bulletin board)
                less the exercise price of the
                option.





***Compensation
      of Directors***




Effective
      January 1, 2005, all of our independent directors are compensated in either
      cash
      or stock options (at each director’s discretion) in the amount of $25,000 per
      year, payable quarterly. In addition, the audit
      committee chairman is paid
      an additional $12,500 per year, payable quarterly.





***Employment
      Contracts and Termination of Employment and Change in Control
      Arrangements***




We
      have
      an employment agreement with John Jenkins, our CEO, which renews automatically
      annually unless terminated by either party. Under the agreement we are required
      to continue paying his salary for a period of 12 months following termination
      of
      employment in the following cases:





·
            if
                he terminates his employment within 90 days following specified change
                of
                control events;




·
            if
                he terminates his employment due to our material change of his employment
                conditions; or




·
            if
                we terminate his employment agreement other than for cause.




The
      options granted under the 2003 Stock Option Plan, including those granted to
      the
      executive officers named above, will vest in the event the Company is sold
      for
      cash or for marketable securities meeting certain minimum liquidity standards.
      The options granted under that plan to John Jenkins, our CEO, will also vest
      if
      we terminate his employment without cause or demote him, in either case in
      connection with a change of control that does not meet the foregoing standards.





6


***Additional
      Information with Respect to Compensation Committee Interlocks and Insider
      Participation***




During
      2005, except for Mr. Jenkins, who is a director and Chairman of the Board,
      serves on the compensation committee and is also the Company’s CEO, none of the
      other members of the compensation committee was an officer or employee of the
      Company or any of its subsidiaries, or had any relationship requiring disclosure
      pursuant to Item 404 of Regulation S-K. Additionally, during 2005, none of
      the
      executive officers or directors of the Company was a member of the Board of
      Directors, or any committee thereof, of any other entity such that the
      relationship would be construed to constitute a committee interlock within
      the
      meaning of the rules of the Securities and Exchange Commission.





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





Information
      regarding our securities authorized for issuance under equity compensation
      plans
      is set forth above under “Item 5. Market for Common Equity and Related
      Stockholder Matters—Equity Compensation Plan Information.”





The
      table
      below reflects the number of shares of our common
      stock beneficially owned as of March 31, 2006 by:




·
            each
                person or group we believe to be the beneficial owner of more than
                five
                percent of our voting securities;




·
            each
                director;




·
            eachnamedexecutive
                officer;and




·
            all
                directors and executive officers, as a group.




Shares
      of our common
      stock subject to options and warrants currently exercisable or convertible,
      or
      exercisable or convertible within 60 days of March 31, 2006, are deemed
      outstanding for purposes of computing the percentage beneficially owned by
      the
      person or entity holding those securities, but are not deemed outstanding for
      purposes of computing the percentage beneficially owned by any other person
      or
      entity. Percentage of beneficial ownership is based on 95,811,278 shares of our common
      stock outstanding as of the close of business on March 31, 2006:




Name
                and address #
            
            **Amount
                and Nature of Beneficial Ownership**
            
            
            
            **Percentage
                of Common Stock**John
                Jenkins
            
            3,955,000
            (1)
            
            
            3.97
            %Marc
                J. Leder
            
            193,696,856
            (2)
            
            
            82.94
            %Rodger
                R. Krouse
            
            193,696,856
            (2)
            
            
            82.94
            %Clarence
                E. Terry
            
            -0-
            (3)
            
            
            -0-M.
                Steven Liff
            
            -0-
            (4)
            
            
            -0-T.
                Scott King
            
            -0-
            (3)
            
            
            -0-Stephen
                G. Marble
            
            -0-
            (5)
            
            
            -0-Gary
                F. Holloway
            
            2,847,209
            (6)
            
            
            2.97
            %George
                R. Rea
            
            70,000
            (7)
            
            
            *C.
                Daryl Hollis
            
            75,000
            (8)
            
            
            *Robert
                C. Ogden
            
            595,000
            (9)
            
            
            *All
                directors and executive officers, as a group (13 persons)
            
            201,239,065
            
            
            
            84.56
            %Sun
                Solunet LLC+
            
            193,696,856
            (10)
            
            
            82.94
            %






7






*
            
            Less
                than 1%#
            
            The
                address for each listed director and executive officer unless otherwise
                indicated is SAN Holdings, Inc.,9800
                Pyramid Court, Suite 130, Englewood, Colorado 80112.+
            
            The
                address for Sun Solunet LLC is Sun Solunet LLC, c/o Sun Capital Partners
                II, LP, c/o Sun Capital Advisors II, LP, c/o Sun Capital Partners,
                LLC,
                5200 Town Center Circle, Suite 470, Boca Raton, FL
                33486.





(1)
            
            Includes
                1,000,000 shares underlying the Company’s convertible Series A Preferred
                Stock, 500,000 shares underlying a warrant exercisable at $0.30 per
                share,
                500,000 shares underlying a warrant exercisable at $0.50 per share,
                500,000 shares underlying an option currently exercisable at $0.29
                per
                share, 300,000 shares underlying an option currently exercisable
                at $2.25
                per share, 550,000 shares underlying an option currently exercisable
                at
                $0.40 and 275,000 shares underlying an option that will become exercisable
                at $0.40 per share. Also includes 40,000 shares underlying a warrant
                currently exercisable at $0.625 per share, 40,000 shares underlying
                a
                warrant currently exercisable at $1.25 per share.(2)
            
            Includes
                58,832,275 shares underlying the Company’s convertible Series A Preferred
                Stock, 29,416,138 shares underlying a warrant exercisable at $0.30
                per
                share, 29,416,138 shares underlying a warrant exercisable at $0.50
                per
                share 20,063,744 shares underlying a warrant currently exercisable
                at
                $0.001 per share. Also, consists of shares held by Sun Solunet LLC
                over
                which he may be deemed to have control. Marc J. Leder and Rodger
                R. Krouse
                may each be deemed to control Sun Solunet LLC, Sun Capital Partners
                II,
                LP, Sun Capital Advisors II, LP, and Sun Capital Partners LLC, as
                Leder
                and Krouse each own 50% of the membership interests in Sun Capital
                Partners LLC, which in turn is the general partner of Sun Capital
                Advisors
                II, LP, which in turn is the general partner of Sun Capital Partners
                II,
                LP, and Sun Capital Partners II, LP owns 99% of the membership interests
                of Sun Solunet LLC. Therefore, Messrs. Leder and Krouse may each
                be deemed
                to have voting and dispositive power over the shares held by Sun
                Solunet
                LLC.(3)
            
            Managing
                director of Sun Capital Partners, Inc., an affiliate of Sun Solunet
                LLC.(4)
            
            Principal
                of Sun Capital Partners, Inc., an affiliate of Sun Solunet
                LLC.(5)
            
            Vice
                President of Sun Capital Partners, Inc., an affiliate of Sun Solunet
                LLC.(6)
            
            Includes
                50,000 options currently exercisable at $0.42 per share and 2,797,209
                shares held by Hollger LLC, a privately held investment firm, over
                which
                Mr. Holloway may be deemed to have control.(7)
            
            Includes
                50,000 shares underlying an option currently exercisable at $0.42
                per
                share.(8)
            
            Consists
                solely of 75,000 shares underlying an option currently exercisable
                at
                $0.42 per share.(9)
            
            Includes
                200,000 shares underlying the Company’s convertible Series A Preferred
                Stock, 100,000 shares underlying a warrant exercisable at $0.30 per
                share,
                100,000 shares underlying a warrant exercisable at $0.50 per share,
                25,000
                shares underlying a warrant currently exercisable at $0.34 per share,
                25,000 shares underlying an option currently exercisable at $0.38
                per
                share, 62,500 shares underlying an option currently exercisable at
                $0.42
                per share and 62,500 shares underlying an option that will become
                exercisable at $0.42 per share.(10)
            
            Consists
                of 55,968,852 shares of common stock owned directly by Sun Solunet
                LLC,
                58,832,275 shares underlying the Company’s convertible Series A Preferred
                Stock, 29,416,138 shares underlying a warrant exercisable at $0.30
                per
                share, 29,416,138 shares underlying a warrant exercisable at $0.50
                per
                share and 20,063,744 shares underlying a warrant currently exercisable
                at
                $0.001 per share. Marc J. Leder and Rodger R. Krouse may each be
                deemed to
                control Sun Solunet LLC, Sun Capital Partners II, LP, Sun Capital
                Advisors
                II, LP, and Sun Capital Partners LLC, as Leder and Krouse each own
                50% of
                the membership interests in Sun Capital Partners LLC, which in turn
                is the
                general partner of Sun Capital Advisors II, LP, which in turn is
                the
                general partner of Sun Capital Partners II, LP, and Sun Capital Partners
                II, LP owns 99% of the membership interests of Sun Solunet LLC. Therefore,
                Messrs. Leder and Krouse may each be deemed to have voting and dispositive
                power over the shares held by Sun Solunet
                LLC.





8


**Item
      13. Certain Relationships and Related Transactions**





**Debt
      Guaranty Warrants and Other Warrants Issued to Sun Solunet**




Pursuant
      to our acquisition agreement with Solunet Storage in 2003, Sun Solunet became
      our majority Shareholder, and currently holds approximately 58%
      of
      our outstanding Shares of Common Stock. Sun Capital Partners II, LP and Sun
      Capital Partners Management LLC (“Sun Capital Management”) are both affiliates
      of Sun Solunet.





In
      connection with the acquisition agreement, the Company entered into that certain
      letter agreement dated March 31, 2003 (“Credit Support Agreement”), among the
      Company, Sun Solunet and an affiliate of Sun Solunet, Sun Capital Partners
      II,
      LP (the “Fund”). Pursuant to the Credit Support Agreement, the Company was
      obligated to issue to Sun Solunet at six-month intervals (each May and November)
      a stock purchase warrant according to formulas set forth in the Credit Support
      Agreement in partial consideration for a guaranty provided by the Fund on the
      revolving credit line (the “Credit Facility”) that the Company maintained with
      Harris N.A. (formerly known as Harris Trust and Savings Bank) (“Harris”). In
      connection with periodic increases to the borrowing availability of the Credit
      Facility, the Credit Support Agreement was amended to increase the amount of
      the
      guaranty.





Pursuant
      to the Credit Support Agreement, in partial consideration for the Credit
      Facility, the Company was required to periodically issue to Sun Solunet on
      November 16 and May 16 of each year, a warrant to purchase shares of the
      Company’s Common Stock (“Guaranty Warrants”), exercisable for a number of shares
      of the Company’s Common Stock calculated pursuant to a formula set forth in the
      Credit Support Agreement, for so long as there remained an aggregate principal
      amount owed to Sun Solunet under the Credit Facility in an amount in excess
      of
      $3,000,000.





During
      the fiscal year ended December 31, 2005, the Company issued Sun Solunet warrants
      to purchase Shares of the Company’s Common Stock in partial consideration for
      the ongoing guaranty provided by the Fund on the Company’s Credit Facility and,
      after the Credit Facility was assigned from Harris to Sun Solunet, for providing
      the Credit Facility as set forth below:





**Date
                of Issuance**
            **Number
                of Shares for which warrant****may
                be exercised**
            **Exercise
                Price**
            **Consideration**March
                23, 2005
            7,715,545
            $0.001
                per share
            Ongoing
                guaranty provided by affiliate of Sun Solunet on the Credit
                FacilityMarch
                23, 2005
            3,086,218
            $0.001
                per share
            Increase
                in the amount of ongoing guaranty provided by affiliate of Sun Solunet
                on
                the Credit FacilityMay
                16, 2005
            2,244,522
            $0.001
                per share
            Ongoing
                guaranty provided by affiliate of Sun Solunet on the Credit
                FacilityJune
                27, 2005
            480,969
            $0.001
                per share
            Increase
                in the amount of ongoing guaranty provided by affiliate of Sun Solunet
                on
                the Credit FacilityNovember
                16, 2005
            6,539,490
            $0.001
                per share
            Ongoing
                guaranty provided by affiliate of Sun Solunet on the Credit
                Facility





On
      November 23, 2005, Sun Solunet purchased the Credit Facility from Harris and
      the
      guaranty provided by the Fund was terminated. In connection therewith, the
      Credit Support Agreement was further amended to provide that the Company was
      obligated to issue stock purchase warrants to Sun Solunet as lender under the
      Credit Facility based on the amount of borrowing availability on the Credit
      Facility at the same intervals and pursuant to the same formulas applicable
      prior to the termination of the guaranty.





9


On
      February 6, 2006, the Credit Facility was amended to increase the borrowing
      availability from $13 million to $14 million, to change the maturity date to
      December 31, 2006 and to accrue interest to the principal amount of the loan
      until maturity.





**Private
      Placement; Voting Agreement; Credit Support Termination
      Agreement**





On
      March
      2, 2006, pursuant to a Securities Purchase Agreement dated and effective as
      of
      February 28, 2006 (the “Securities Purchase Agreement”) by and among the Company
      and the purchasers identified therein (the “Purchasers”), the Company issued to
      the Purchasers units (“Units”) consisting of shares of the Company’s newly
      designated convertible series A preferred stock, no par value per share (“Series
      A Preferred Stock”) and common stock purchase warrants exercisable at exercise
      prices of $0.30 per share and $0.50 per share (collectively, the “Warrants”).
      The offer and sale of the Units was made to accredited investors in a private
      placement transaction exempt from registration under the Securities Act of
      1933,
      as amended (the “1933 Act”) pursuant to Section 4(2) of the 1933 Act and
      Regulation D promulgated thereunder (the “Private Placement”). Certain officers
      and directors of the Company and Sun Solunet, the majority Shareholder of the
      Company, purchased Units. In connection with the Private Placement and to induce
      the other Purchasers to execute the Securities Purchase Agreement, on March
      2,
      2006, in a letter to the Company, Sun Solunet agreed for the benefit of the
      Purchasers to:





·
            cause
                each of the directors of the Company who is employed by or who is
                an
                officer of Sun Solunet (the “Sun Directors”) to, as soon as reasonably
                practicable after the Company files its Annual Report on Form 10-K
                for the
                fiscal year ended December 31, 2005, take steps reasonably necessary
                to
                call a Shareholder meeting to vote on the measures described in the
                following bullet point;




·
            vote
                all of its Shares of the Common Stock entitled to vote at the meeting
                in
                favor of a reverse stock split of the Company’s Common Stock on whatever
                basis is determined by the Board of Directors of the Company and
                an
                increase in the Company’s authorized capital in an amount determined by
                the Board of Directors, to increase the authorized capital of the
                Company
                in an amount sufficient to provide for the issuance of all of the
                Shares
                of the Company’s Common Stock that is issuable upon exercise of the
                Warrants and conversion of the Series A Preferred Stock;
                and




·
            cause
                the Sun Directors to take steps reasonably necessary to cause certain
                governance changes to the Company, including but not limited to (i)
                reducing the size of the Board of Directors of the Company to a number
                equal to or less than 9 directors; (ii) increasing the size of the
                Audit
                Committee to include at least three members that must all be independent
                (but permitting an additional member that is not independent); (iii)
                to
                require that future decisions relating to the compensation of the
                executive officers of the Company be recommended to the Board of
                Directors
                for determination by either a majority of the independent directors
                of the
                Company, or a compensation committee comprised solely of independent
                directors.




The
      consideration paid for Units purchased by officers and directors of the Company
      consisted of cash at the same purchase price ($50,000 per Unit) as was paid
      by
      Purchasers that were not affiliated with the Company. The consideration paid
      by
      Sun Solunet for 176.5 Units consisted of the exchange of $8,000,000 of the
      outstanding debt the Company owed to Sun Solunet under the Credit Facility
      at
      the same purchase price paid by Purchasers not affiliated with the Company,
      less
      fees paid by the Company to the placement agent.





As
      a
      result of this exchange and the payment of approximately $1 million by the
      Company of the outstanding debt owed to Sun Solunet under the Credit Facility,
      on March 2, 2006, the Company and the Fund, acknowledged and agreed to by Sun
      Solunet, entered into a termination letter (the “Credit Support Termination
      Agreement”) to the Credit Support Agreement. The Credit Support Termination
      Agreement includes the following provisions, among others:





·
            The
                Company and Sun Solunet agreed to decrease the Company’s borrowing
                availability under the Credit Facility from $14 million to $5 million
                (in
                principal amount), to modify the Credit Facility from a revolving
                line of
                credit to a term loan that does not permit reborrowings by the Company
                and
                to extend the maturity date to a date three years from the Closing
                Date
                (March 2, 2009).






10




·
            The
                parties agreed that Sun Solunet and the Fund have no additional lending
                obligation to the Company.




·
            The
                parties terminated, cancelled, released and discharged the Credit
                Support
                Agreement and the obligations of all parties thereunder in their
                entirety
                effective as of the Closing Date, including the obligation of the
                Company
                to issue warrants to Sun Solunet periodically thereunder (with Sun
                Solunet
                retaining any warrants previously issued to it and all of its rights
                thereunder).




**Management
      and Consulting Services**




Pursuant
      to the “Management Services Agreement” between the Company and Sun Capital
      Management, an affiliate of our majority shareholder, Sun Solunet, the Company
      pays $75,000 quarterly for management and consulting services to Sun Capital
      Management. Sun Capital II, who is also an affiliate of Sun Solunet, provided
      a
      guaranty on the Company’s Harris credit facility under the Credit Support
      Agreement through November 23, 2005, the date on which Harris assigned the
      note
      to Sun Solunet. While the Company received material benefits from this guaranty,
      the Company paid no specified cash consideration for the guaranty.





As
      of
      December 31, 2005 and 2004, the Company had $-0- due to Sun Capital Management
      for management fees and related expenses. For the years ended December 31,
      2005,
      2004 and 2003, the Company paid $318,000, $323,000 and $443,000, respectively,
      to Sun Capital Management for management fees and related expenses.





The
      Management Services Agreement will remain in effect until the first date when
      all of the following have occurred: (a) the designees of Sun Capital Management
      and its affiliates no longer constitute a majority of our Board of
      Director s ;
      (b) Sun
      Capital Management and its affiliates no longer own or control at least 30%
      of
      our outstanding Shares; and (c) Sun Capital Management and its affiliates
      (including Sun Capital II) no longer guarantee any portion of our debt. If
      the
      foregoing three events have not yet occurred, the Management Services Agreement
      will terminate on April 4, 2013.





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





The
      following table shows the fees that the Company incurred for audit and other
      services provided by Grant Thornton for the last two fiscal years:





**2005**
            
            **2004**(In
                thousands)
            
            (In
                thousands)Audit
                Fees
            
            $
            174
            
            $
            160Audit-Related
                Fees
            
            
            39
            
            
            --Tax
                Fees
            
            
            35
            
            
            44All
                Other Fees
            
            
            --
            
            
            --Total
            
            $
            248
            
            $
            204





*Audit
      Fees* .
      This
      category includes the audit of the Company’s annual financial statements, review
      of financial statements included in our
      quarterly reports on Form
      10-Q ,
      and
      services that are normally provided by the independent auditors in connection
      with statutory and regulatory filings or engagements for those fiscal years.
      This category also includes advice on audit and accounting matters that arose
      during, or as a result of, the audit or the review of interim financial
      statements, and the preparation of an annual “management letter” on internal
      control matters. For 2005 and 2004, the amounts stated include the audit and
      quarterly reviews of SAN Holdings, Inc. for the years then ended.





11


*Audit-Related
      Fees* .
      This
      category includes audit-related work performed by the Company’s independent
      auditors on the Company’s EarthWhere segment’s “carve-out” financial statements
      for the years 2002 through 2005.




*Tax
      Fees.* This
      category consists of professional services rendered by the Company’s auditors
      for tax compliance and tax advice. The services for the fees disclosed under
      this category include tax return preparation and technical tax
      advice.





*Pre-Approval
      of Audit and Permitted Non-Audit Services* .
      The audit
      committee charter
      requires the Company to have the audit
      committee approve
      in advance any and all audit services and all permitted non-audit services
      (unless de minimus) provided by the independent accountants, as well as the
      fees
      and other compensation to be paid to the independent accountants. The
      independent accountants submit requests to the audit
      committee for
      pre-approval of any such allowable services. In 2005 and 2004, all of the audit
      and permitted non-audit services rendered by the Company’s  independent
      accountants were approved by the audit
      committee .





**Part
      IV**





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





**(3)
      Exhibits**





The
      exhibits filed as a part of this report are
      listed below and this list is intended to comprise the exhibit
      index:





**Exhibit**
              **Number**
            **Description**31.01
            CEO
                Certification pursuant to Rule 13a-14(a)/15(d)-14(a).
                #31.02
            CFO
                Certification pursuant to Rule 13a-14(a)/15(d)-14(a).
                #32.01
            CEO
                Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002 (18 U.S.C. 1350). #32.02
            CFO
                Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002 (18 U.S.C. 1350). #____________________
              #
                Filed herewith.








12


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      registrant has caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.





SAN Holdings,
                Inc.(Registrant)







Date:
                April 21, 2006
            By:/s/
                John
                JenkinsJohn Jenkins
              Chief
                Executive Officer





Date:
                  April 21, 2006
              By:/s/
                  Robert C.
                  OgdenRobert C. Ogden
                  Chief
                    Financial Officer,
                  Principal
                    Financial and Accounting
                    Officer


In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.


Date: April 21,
      2006  /s/ John
      Jenkins


John Jenkins, Chairman





Date: April 21,
      2006   / s/ Rodger R. Krouse


Rodger R. Krouse, Director





Date: April 21,
      2006  /s/ Marc
      J. Leder


Marc J. Leder, Director




Date: April 21,
      2006  /s/ Clarence
      E. Terry


Clarence E. Terry, Director





Date:


M. Steven Liff, Director





Date: April 21,
      2006  /s/ Stephen G. Marble


Stephen G. Marble, Director





Date: April 21,
      2006  /s/ T.
      Scott King


T. Scott King, Director





Date: April 21,
      2006  /s/ Gary
      F. Holloway


Gary F. Holloway, Director





Date: April 21,
      2006  /s/ C.
      Daryl Hollis


C. Daryl Hollis, Director





Date: April 21,
      2006  /s/ George
      R. Rea


George R. Rea, Director





13