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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
      REPORT </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      Report: May 4, 2006 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman"><strong>SAN
      HOLDINGS, INC. </strong></font>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Colorado</font></div>
            </td>
            <td valign="top" width="4%">&#160;</td>
            <td valign="top" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0-16423</font></div>
            </td>
            <td valign="top" width="4%">&#160;</td>
            <td valign="top" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">84-0907969
                </font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                or other jurisdiction of incorporation)</font></div>
            </td>
            <td valign="top" width="4%">&#160;</td>
            <td valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
            </td>
            <td valign="top" width="4%">&#160;</td>
            <td valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
                Employer Identification Number)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9800
      Pyramid Court, Suite 130, Englewood, CO 80112 </font>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of Principal Executive Offices) (Zip Code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(303)
      660-3933 </font>
      <div>
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      </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
      telephone number, including area code</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None
      </font>
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      </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      name or former address, if changed since last report)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425) </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 450pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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          <tr valign="top" style="line-height: 1.25;">
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            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12) </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 450pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b)) </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))</font></div>
            </td>
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    <div>&#160;</div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01 Entry into a Material Definitive Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      May 4,
      2006 (the &#8220;Closing Date&#8221;), SAN Holdings, Inc. (the &#8220;Company&#8221;) entered into a
      Securities Purchase Agreement (the &#8220;May 2006 Securities Purchase Agreement&#8221;), by
      and between the Company and Millennium Partners, L.P. (the &#8220;May 2006
      Purchaser&#8221;). The Securities Purchase Agreement is filed as an exhibit to this
      Report. Pursuant to the May 2006 Securities Purchase Agreement, the Company
      issued the securities described in Item 3.02 to this Report, the description
      of
      which is incorporated herein by reference, and the Company also granted certain
      registration rights described below.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company granted registration rights to the May 2006 Purchaser with respect
      to
      some of the securities purchased under the May 2006 Securities Purchase
      Agreement pursuant to the Registration Rights Agreement, dated and effective
      as
      of February 28, 2006 (the &#8220;Registration Rights Agreement&#8221;), among the Company,
      the May Purchaser, the March 2006 Purchasers (as defined in Item 3.02) and
      the
      April 2006 Purchasers (as defined in Item 3.02). The Registration Rights
      Agreement was previously filed as an exhibit to the Company&#8217;s Current Report on
      Form 8-K filed with the Securities and Exchange Commission (&#8220;SEC&#8221;) on March 8,
      2006 (the &#8220;March 2006 Current Report&#8221;). The revised signature page to the
      Registration Rights Agreement executed by the May 2006 Purchaser was filed
      as an
      exhibit to the Company&#8217;s Current Report on Form 8-K filed with the SEC on April
      21, 2006 (the &#8220;April 2006 Current Report&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      3.02 Unregistered Sales of Equity Securities</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      the
      Closing Date, the Company offered and sold to the May 2006 Purchaser a total
      of
      30 units (&#8220;Units&#8221;), each Unit consisting of: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
      share
      of the Company&#8217;s newly designated convertible series A preferred stock, no par
      value per share (&#8220;Series A Preferred Stock&#8221;) initially convertible into 333,333
      shares of the Company&#8217;s common stock, no par value per share (&#8220;Common Stock&#8221;);
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
      warrant
      to purchase 166,667 shares of Common Stock exercisable for five years from
      the
      Closing Date at an initial exercise price of $0.30 per share expiring five
      years
      from the Closing Date; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
      warrant
      to purchase 166,667 shares of Common Stock exercisable for five years from
      the
      Closing Date at an initial exercise price of $0.50 per share (together with
      the
      warrants described in clause (b) above, the &#8220;Warrants&#8221;) expiring five years from
      the Closing Date.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Units
      were issued pursuant to the May 2006 Securities Purchase Agreement and were
      offered and sold to an accredited investor in a private placement transaction
      exempt from registration under the Securities Act of 1933, as amended (the
&#8220;1933
      Act&#8221;) pursuant to Section 4(2) of the 1933 Act, and Regulation D promulgated
      thereunder (the &#8220;Private Placement&#8221;). The consideration received by the Company
      from the May 2006 Purchaser for the purchase of the Units on the Closing Date
      was $1,500,000 cash, less approximately $150,000 in fees and expenses paid
      to
      the placement agent pursuant to an agreement with the Company in connection
      with
      the Private Placement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      sale
      of Units issued on the Closing Date was the third closing in the Private
      Placement. The initial closing occurred on March 2, 2006 (the &#8220;Initial Closing
      Date&#8221;). The Units issued on the Initial Closing Date were issued pursuant to the
      Securities Purchase Agreement, dated and effective as of February 28, 2006,
      by
      and among the Company and the purchasers that executed a signature page thereto
      (the &#8220;March 2006 Purchasers&#8221;) as described in the Company&#8217;s Annual Report on
      Form 10-K for the fiscal year ended December 31, 2005. The second closing
      occurred on April 18, 2006 (the &#8220;Second Closing Date&#8221;). The Units issued on the
      Second Closing Date were issued pursuant to the Securities Purchase Agreement,
      dated and effective as of the Second Closing Date, by and among the Company
      and
      the purchasers that executed a signature page thereto (the &#8220;April 2006
      Purchasers&#8221;), as described in the April 2006 Current Report.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      voting powers, designation, conversion rights, preferences, limitations,
      restrictions and relative rights of the Series A Preferred Stock and the holders
      thereof are set forth in the Articles of Amendment to the Company&#8217;s Second
      Amended and Restated Articles of Incorporation that was previously filed as
      an
      exhibit to the Company&#8217;s March 2006 Current Report. The terms of the Warrants,
      including but not limited to their rights and preferences and the exercise
      features are set forth in the form of Warrant included as an exhibit to this
      Report, and are substantially similar to the Warrants issued on the Initial
      Closing Date. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      9.01 Financial Statements and Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(c)
      Exhibits</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      The
      following is a complete list of exhibits filed as part of this Report. Exhibit
      numbers correspond to the numbers in the exhibit table of Item 601 of Regulation
      S-K.</font></div>
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                No.</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: white solid;">&#160;</td>
            <td valign="top" width="80%" style="border-bottom: black thin solid;">
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            <td align="justify" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Designation
                of Series A Preferred Stock </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(1)</sup></font></div>
            </td>
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            <td align="justify" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                Purchase Agreement, dated as of May 4, 2006, by and between the Company
                and Millennium Partners, L.P. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font></div>
            </td>
          </tr>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.02</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement, dated as of February 28, 2006, by and among the
                Company
                and the purchasers that executed a signature page thereto </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(3)</sup></font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.03</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of the Company Common Stock Purchase Warrants issued on March 2,
                2006
                (Included in Exhibits D and E of Exhibit 10.01)
</font></div>
            </td>
          </tr>

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          <hr style="COLOR: black" align="left" noshade size="1" width="15%">
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        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(1)</sup></font></td>
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                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                  by reference to Exhibit 4.01 to the Company&#8217;s Current Report on Form 8-K
                  filed March 8, 2006.</font></div>
              </td>
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              <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font></td>
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                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits
                  A, B and C (except for the signature page) to Exhibit 10.01 are
                  incorporated by reference to the corresponding lettered exhibits
                  in
                  Exhibit 10.01 to the Company&#8217;s Current Report on Form 8-K filed March 8,
                  2006, the signature page to Exhibit C to Exhibit 10.01 is incorporated
                  by
                  reference to Exhibit C to Exhibit 10.01 to the Company&#8217;s Current Report on
                  Form 8-K filed April 21, 2006 and the remainder of Exhibit 10.01
                  is filed
                  herewith.</font></div>
              </td>
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              <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(3)</sup></font></td>
              <td align="left">
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                  by reference to Exhibit 10.02 to the Company&#8217;s Current Report on Form 8-K
                  filed March 8, 2006 except for the signature page which is incorporated
                  by
                  reference to Exhibit C to Exhibit 10.01 to the Company&#8217;s Current Report on
                  Form 8-K filed April 21,
                  2006.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report to be signed on its behalf by the undersigned, hereunto
      duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>SAN
              HOLDINGS, INC.</strong></font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;May
              9,
              2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Robert
              C.
              Ogden</font></td>
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            <td>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Name:&#160;&#160;&#160;
                Robert C. Ogden</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Title:&#160;&#160;&#160;&#160;&#160;
                Vice President,&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Chief
                Financial
                Officer and Secretary</font></div>
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{"company-data": {"conformed-name": "SAN HOLDINGS INC", "cik": "0000799097", "assigned-sic": "3572", "irs-number": "840907969", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-16423", "film-number": "06819409"}, "business-address": {"street1": "9800 MT PYRAMID COURT", "street2": "SUITE 130", "city": "ENGLEWOOD", "state": "CO", "zip": "80112", "phone": "3036603933"}, "mail-address": {"street1": "9800 MT PYRAMID COURT", "street2": "SUITE 130", "city": "ENGLEWOOD", "state": "CO", "zip": "80112"}, "former-company": [{"former-conformed-name": "CITADEL ENVIRONMENTAL GROUP INC", "date-changed": "19961129"}, {"former-conformed-name": "CITADEL ASSET MANAGEMENT LTD", "date-changed": "19920703"}]}
Unassociated Document
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
Pursuant
      to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
      of
      Report: May 4, 2006
SAN
      HOLDINGS, INC.
(Exact
      name of registrant as specified in its charter)
Colorado
0-16423
84-0907969
(State
                or other jurisdiction of incorporation)
(Commission
                File Number)
(IRS
                Employer Identification Number)
9800
      Pyramid Court, Suite 130, Englewood, CO 80112
(Address
      of Principal Executive Offices) (Zip Code)
(303)
      660-3933
Registrant's
      telephone number, including area code
None
(Former
      name or former address, if changed since last report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:
o
Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)
o
Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)
o
Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))
o
Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))
Item
      1.01 Entry into a Material Definitive Agreement
On
      May 4,
      2006 (the "Closing Date"), SAN Holdings, Inc. (the "Company") entered into a
      Securities Purchase Agreement (the "May 2006 Securities Purchase Agreement"), by
      and between the Company and Millennium Partners, L.P. (the "May 2006
      Purchaser"). The Securities Purchase Agreement is filed as an exhibit to this
      Report. Pursuant to the May 2006 Securities Purchase Agreement, the Company
      issued the securities described in Item 3.02 to this Report, the description
      of
      which is incorporated herein by reference, and the Company also granted certain
      registration rights described below.
The
      Company granted registration rights to the May 2006 Purchaser with respect
      to
      some of the securities purchased under the May 2006 Securities Purchase
      Agreement pursuant to the Registration Rights Agreement, dated and effective
      as
      of February 28, 2006 (the "Registration Rights Agreement"), among the Company,
      the May Purchaser, the March 2006 Purchasers (as defined in Item 3.02) and
      the
      April 2006 Purchasers (as defined in Item 3.02). The Registration Rights
      Agreement was previously filed as an exhibit to the Company's Current Report on
      Form 8-K filed with the Securities and Exchange Commission ("SEC") on March 8,
      2006 (the "March 2006 Current Report"). The revised signature page to the
      Registration Rights Agreement executed by the May 2006 Purchaser was filed
      as an
      exhibit to the Company's Current Report on Form 8-K filed with the SEC on April
      21, 2006 (the "April 2006 Current Report").
Item
      3.02 Unregistered Sales of Equity Securities
On
      the
      Closing Date, the Company offered and sold to the May 2006 Purchaser a total
      of
      30 units ("Units"), each Unit consisting of:
(a)
one
      share
      of the Company's newly designated convertible series A preferred stock, no par
      value per share ("Series A Preferred Stock") initially convertible into 333,333
      shares of the Company's common stock, no par value per share ("Common Stock");
(b)
a
      warrant
      to purchase 166,667 shares of Common Stock exercisable for five years from
      the
      Closing Date at an initial exercise price of $0.30 per share expiring five
      years
      from the Closing Date; and
(c)
a
      warrant
      to purchase 166,667 shares of Common Stock exercisable for five years from
      the
      Closing Date at an initial exercise price of $0.50 per share (together with
      the
      warrants described in clause (b) above, the "Warrants") expiring five years from
      the Closing Date.
The
      Units
      were issued pursuant to the May 2006 Securities Purchase Agreement and were
      offered and sold to an accredited investor 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"). The consideration received by the Company
      from the May 2006 Purchaser for the purchase of the Units on the Closing Date
      was $1,500,000 cash, less approximately $150,000 in fees and expenses paid
      to
      the placement agent pursuant to an agreement with the Company in connection
      with
      the Private Placement.
The
      sale
      of Units issued on the Closing Date was the third closing in the Private
      Placement. The initial closing occurred on March 2, 2006 (the "Initial Closing
      Date"). The Units issued on the Initial Closing Date were issued pursuant to the
      Securities Purchase Agreement, dated and effective as of February 28, 2006,
      by
      and among the Company and the purchasers that executed a signature page thereto
      (the "March 2006 Purchasers") as described in the Company's Annual Report on
      Form 10-K for the fiscal year ended December 31, 2005. The second closing
      occurred on April 18, 2006 (the "Second Closing Date"). The Units issued on the
      Second Closing Date were issued pursuant to the Securities Purchase Agreement,
      dated and effective as of the Second Closing Date, by and among the Company
      and
      the purchasers that executed a signature page thereto (the "April 2006
      Purchasers"), as described in the April 2006 Current Report.
2
The
      voting powers, designation, conversion rights, preferences, limitations,
      restrictions and relative rights of the Series A Preferred Stock and the holders
      thereof are set forth in the Articles of Amendment to the Company's Second
      Amended and Restated Articles of Incorporation that was previously filed as
      an
      exhibit to the Company's March 2006 Current Report. The terms of the Warrants,
      including but not limited to their rights and preferences and the exercise
      features are set forth in the form of Warrant included as an exhibit to this
      Report, and are substantially similar to the Warrants issued on the Initial
      Closing Date.
Item
      9.01 Financial Statements and Exhibits
(c)
      Exhibits
The
      following is a complete list of exhibits filed as part of this Report. Exhibit
      numbers correspond to the numbers in the exhibit table of Item 601 of Regulation
      S-K.
Exhibit
                No.
Description
4.01
Designation
                of Series A Preferred Stock
(1)
10.01
Securities
                Purchase Agreement, dated as of May 4, 2006, by and between the Company
                and Millennium Partners, L.P.
(2)
10.02
Registration
                Rights Agreement, dated as of February 28, 2006, by and among the
                Company
                and the purchasers that executed a signature page thereto
(3)
10.03
Form
                of the Company Common Stock Purchase Warrants issued on March 2,
                2006
                (Included in Exhibits D and E of Exhibit 10.01)
(1)
Incorporated
                  by reference to Exhibit 4.01 to the Company's Current Report on Form 8-K
                  filed March 8, 2006.
(2)
Exhibits
                  A, B and C (except for the signature page) to Exhibit 10.01 are
                  incorporated by reference to the corresponding lettered exhibits
                  in
                  Exhibit 10.01 to the Company's Current Report on Form 8-K filed March 8,
                  2006, the signature page to Exhibit C to Exhibit 10.01 is incorporated
                  by
                  reference to Exhibit C to Exhibit 10.01 to the Company's Current Report on
                  Form 8-K filed April 21, 2006 and the remainder of Exhibit 10.01
                  is filed
                  herewith.
(3)
Incorporated
                  by reference to Exhibit 10.02 to the Company's Current Report on Form 8-K
                  filed March 8, 2006 except for the signature page which is incorporated
                  by
                  reference to Exhibit C to Exhibit 10.01 to the Company's Current Report on
                  Form 8-K filed April 21,
                  2006.
3
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report to be signed on its behalf by the undersigned, hereunto
      duly authorized.
SAN
              HOLDINGS, INC.
Date: May
              9,
              2006
By:
/s/ Robert
              C.
              Ogden
Name:   
                Robert C. Ogden
Title:     
                Vice President,
Chief
                Financial
                Officer and Secretary
4