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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: 12pt; FONT-FAMILY: Times New Roman">UNITED
      STATES</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: 12pt; FONT-FAMILY: Times New Roman">SECURITIES
      AND EXCHANGE COMMISSION</font></div>
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      D.C. 20549 </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: 16pt; FONT-FAMILY: Times New Roman">FORM
      8-K</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">CURRENT
      REPORT </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">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: June 20, 2006</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: 20pt; FONT-FAMILY: Times New Roman"><u>SAN
      Holdings, Inc.</u></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">(Exact
      name of registrant as specified in its charter)</font></div>
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            </td>
            <td valign="top" width="2%">&#160;</td>
            <td valign="top" width="32%" style="border-bottom: black thin solid;">
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            </td>
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            <td valign="top" width="32%" style="border-bottom: black thin solid;">
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                </font></div>
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                or other jurisdiction of incorporation)</font></div>
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            <td valign="top" width="32%">
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                File Number)</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">(IRS
                Employer Identification Number)</font></div>
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      Pyramid Court, Suite 130, Englewood, CO 80112</u></font></div>
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      of Principal Executive Offices) (Zip Code)</font></div>
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      660-3933</u></font></div>
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      telephone number, including area code</font></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"><br></div>
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      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="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><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
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      communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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      material pursuant to Rule 14a-12 under
      the Exchange Act (17 CFR 240.14a-12) </font></div>
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      communications pursuant to Rule
      14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </font></div>
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      communications pursuant to Rule
      13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit
      Report or Completed Interim Review.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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>(a)
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      June
      20, 2006, the Audit Committee of SAN Holdings, Inc. (the &#8220;Company&#8221;) determined
      that the Company&#8217;s accounting for the first closing in March 2006 of its private
      placement transaction (the &#8220;Private Placement&#8221;) required adjustment. As a
      result, the Audit Committee in consultation with management concluded that
      the
      Company&#8217;s interim financial statements as of and for the quarter ended March 31,
      2006 should not be relied upon.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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
      issue
      of the Company&#8217;s accounting for the March 2006 closing of the Private Placement
      arose in connection with a review of comments received from the staff of the
      Securities and Exchange Commission (&#8220;SEC&#8221;) in a review of the Company&#8217;s periodic
      SEC filings. The Company intends to file restated 2006 interim financial
      statements on Form 10-Q/A for the quarter ended March 31, 2006 to adjust the
      calculation and classification of amounts assigned to the Company&#8217;s series A
      convertible preferred stock and warrants to purchase shares of the Company&#8217;s
      common stock issued in the March 2006 closing of the Private
      Placement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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">While
      the
      Company is not aware of any other accounting issues requiring adjustment, there
      can be no assurances that the Company will not find additional accounting issues
      requiring adjustment in the future.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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">Management
      and the Audit Committee of the Company have discussed the matters in this Item
      4.02(a) with the Company&#8217;s independent accountants, Grant Thornton LLP.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></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"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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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          <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>
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          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font size="2">SAN HOLDINGS, INC.</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>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</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/
              John
              Jenkins</font></td>
          </tr>
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            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">John
              Jenkins, Chief Executive Officer</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td>&#160;</td>
            <td colspan="2" width="0"><font size="2">Date: June 22,
              2006</font></td>
          </tr>

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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": "06919397"}, "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"}]}
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: June 20, 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
(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
      4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit
      Report or Completed Interim Review.
(a)
On
      June
      20, 2006, the Audit Committee of SAN Holdings, Inc. (the "Company") determined
      that the Company's accounting for the first closing in March 2006 of its private
      placement transaction (the "Private Placement") required adjustment. As a
      result, the Audit Committee in consultation with management concluded that
      the
      Company's interim financial statements as of and for the quarter ended March 31,
      2006 should not be relied upon.
The
      issue
      of the Company's accounting for the March 2006 closing of the Private Placement
      arose in connection with a review of comments received from the staff of the
      Securities and Exchange Commission ("SEC") in a review of the Company's periodic
      SEC filings. The Company intends to file restated 2006 interim financial
      statements on Form 10-Q/A for the quarter ended March 31, 2006 to adjust the
      calculation and classification of amounts assigned to the Company's series A
      convertible preferred stock and warrants to purchase shares of the Company's
      common stock issued in the March 2006 closing of the Private
      Placement.
While
      the
      Company is not aware of any other accounting issues requiring adjustment, there
      can be no assurances that the Company will not find additional accounting issues
      requiring adjustment in the future.
Management
      and the Audit Committee of the Company have discussed the matters in this Item
      4.02(a) with the Company's independent accountants, Grant Thornton LLP.
2
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.
By:
/s/
              John
              Jenkins
John
              Jenkins, Chief Executive Officer
Date: June 22,
              2006
3