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      STATES</font></div>
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      AND EXCHANGE COMMISSION</font></div>
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      D.C. 20549</font></div>
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      8-K</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">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: November 11, 2005 </font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">SAN
                Holdings, Inc.</font></div>
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                name of registrant as specified in its
                charter)</font></div>
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    <div align="left">
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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>
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            <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>
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            <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>
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                or other jurisdiction of incorporation)</font></div>
            </td>
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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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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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>
            </td>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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 style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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>
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      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>
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              <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>
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              <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>
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              <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
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            </td>
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            </td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
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    <div>&#160;</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"><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
      November 11, 2005, SANZ Inc. (&#8220;SANZ&#8221;) and Solunet Storage, Inc. (&#8220;Solunet&#8221; and,
      together with SANZ, the &#8220;Subsidiaries&#8221;), each wholly owned subsidiaries of SAN
      Holdings, Inc. (the &#8220;Company&#8221;) entered into that certain Tenth Amendment to
      Credit Agreement and Waiver of Defaults (the &#8220;Tenth Amendment&#8221;) with Wells Fargo
      Bank, National Association, acting through its Wells Fargo Business Credit
      operating division (&#8220;Wells Fargo&#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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Credit Agreement that was amended by the Tenth Amendment provides the Company
      with a revolving credit line with Wells Fargo to borrow up to $12 million,
      subject to availability based on a borrowing base calculation. Wells Fargo
      may
      declare the loan in default if the Subsidiaries do not meet certain financial
      performance measures. At September 1, 2005, the Subsidiaries were not in
      compliance with certain of those covenants; however, Wells Fargo did not issue
      a
      formal, written notice of default. Under the Tenth Amendment, Wells Fargo
      granted the Subsidiaries a waiver of non-compliance on these covenants.
</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
      November 16, 2005 (the &#8220;Issue Date&#8221;), SAN Holdings, Inc. (the &#8220;Company&#8221;) issued
      to the Company&#8217;s majority shareholder, Sun Solunet LLC (&#8220;Sun Solunet&#8221;), a stock
      purchase warrant (the &#8220;Guaranty Warrant&#8221;) to purchase 6,539,490 shares of the
      Company&#8217;s common stock, no par value per share (the &#8220;Common Stock&#8221;) at an
      exercise price of $0.001 per share. The Guaranty Warrant is immediately
      exercisable. The form of the Guaranty Warrant was previously filed as an exhibit
      to the Company&#8217;s Amended Current Report on Form 8-K/A filed with the Securities
      and Exchange Commission on April 3, 2003 (the &#8220;April 2003 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Common Stock issuable by the Company upon the exercise of the Guaranty Warrant
      represents approximately 7% of the Company&#8217;s outstanding Common Stock as of the
      Issue Date. As a result, giving effect to the exercise of the Guaranty Warrant
      (but not to the exercise of any other outstanding warrants or options), Sun
      Solunet now holds approximately 66% of the outstanding common stock of the
      Company (inclusive of the Guaranty Warrant).</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 received no cash proceeds from the issuance of the Guaranty Warrant.
      If
      the entire Guaranty Warrant is exercised, the Company will receive a total
      of
      approximately $6,539. However, no assurance can be given that the Guaranty
      Warrant will be exercised.</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
      Guaranty Warrant was issued to Sun Solunet in partial consideration for a
      guaranty provided by an affiliate of Sun Solunet (the &#8220;Guarantor&#8221;) on the
      revolving credit line of up to $13 million of the Company with Harris N.A.
      (formerly known as Harris Trust and Savings Bank) (&#8220;Harris Trust&#8221;) pursuant to a
      letter agreement dated March 31, 2003 (&#8220;Credit Support Agreement&#8221;), among the
      Company, Sun Solunet and the Guarantor in a transaction exempt from registration
      pursuant to Regulation D promulgated under the Securities Act of 1933 and/or
      Section 4(2) of the Securities Act of 1933. The Credit Support Agreement was
      filed as an exhibit to the Company&#8217;s April 2003 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      number of shares exercisable under the Guaranty Warrant issued to Sun Solunet
      on
      the Issue Date was determined pursuant to a formula set forth in the Credit
      Support Agreement and is based on the amount that the outstanding guarantee
      provided on behalf of the Company by the Guarantor on the credit line with
      Harris Trust exceeds $3.0 million as of the Issue Date. Until the Company
      reduces the guaranteed debt to $3.0 million or less, it will be required to
      issue additional warrants to Sun Solunet at six-month intervals in the future
      (each May and November), according to formulas applicable to each such date,
      as
      disclosed in the Company&#8217;s Annual Report on Form 10-K for the fiscal year ended
      December 31, 2004. As of the Issue Date, the Company has outstanding borrowings
      on the Harris Trust revolving credit line of approximately $12
      million.</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="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)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;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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              <td width="2%">&#160;</td>
              <td align="justify" valign="top" width="80%">&#160;</td>
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              <td width="2%">&#160;</td>
              <td align="justify" valign="top" width="80%">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="right" valign="top" width="9%">
                <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">10.01</font></div>
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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">Tenth
                  Amendment to Credit Agreement and Waiver of Defaults dated as of
                  November
                  11, 2005 among SANZ Inc., Solunet Storage Inc. and Wells Fargo
                  Bank,
                  National Association, acting through its Wells Fargo Business Credit
                  operating division </font></div>
              </td>
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              <td width="2%">&#160;</td>
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              <td align="right" valign="top" width="9%">&#160;</td>
              <td width="2%">&#160;</td>
              <td align="justify" valign="top" width="80%">&#160;</td>
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                <div>*</div>
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              <td align="left">
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                  by reference to Annex A of Exhibit 2.3 to the Registrant&#8217;s amended Current
                  Report on Form 8-K/A filed on April 3,
                  2003.</font></div>
              </td>
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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>
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      <div id="FTR">
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    <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>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SAN
              HOLDINGS, INC.</strong></font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
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          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;November
              17, 2005</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/&#160;Robert
              C. Ogden</font></td>
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          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Robert
                C. Ogden, Vice President, Chief Financial Officer and Secretary</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</font></div>
            </td>
          </tr>
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            <td>&#160;</td>
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            <td>&#160;</td>
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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": "051212226"}, "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: November 11, 2005
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
      November 11, 2005, SANZ Inc. ("SANZ") and Solunet Storage, Inc. ("Solunet" and,
      together with SANZ, the "Subsidiaries"), each wholly owned subsidiaries of SAN
      Holdings, Inc. (the "Company") entered into that certain Tenth Amendment to
      Credit Agreement and Waiver of Defaults (the "Tenth Amendment") with Wells Fargo
      Bank, National Association, acting through its Wells Fargo Business Credit
      operating division ("Wells Fargo").
The
      Credit Agreement that was amended by the Tenth Amendment provides the Company
      with a revolving credit line with Wells Fargo to borrow up to $12 million,
      subject to availability based on a borrowing base calculation. Wells Fargo
      may
      declare the loan in default if the Subsidiaries do not meet certain financial
      performance measures. At September 1, 2005, the Subsidiaries were not in
      compliance with certain of those covenants; however, Wells Fargo did not issue
      a
      formal, written notice of default. Under the Tenth Amendment, Wells Fargo
      granted the Subsidiaries a waiver of non-compliance on these covenants.
Item
      3.02 Unregistered Sales of Equity Securities.
On
      November 16, 2005 (the "Issue Date"), SAN Holdings, Inc. (the "Company") issued
      to the Company's majority shareholder, Sun Solunet LLC ("Sun Solunet"), a stock
      purchase warrant (the "Guaranty Warrant") to purchase 6,539,490 shares of the
      Company's common stock, no par value per share (the "Common Stock") at an
      exercise price of $0.001 per share. The Guaranty Warrant is immediately
      exercisable. The form of the Guaranty Warrant was previously filed as an exhibit
      to the Company's Amended Current Report on Form 8-K/A filed with the Securities
      and Exchange Commission on April 3, 2003 (the "April 2003 Current Report").
The
      Common Stock issuable by the Company upon the exercise of the Guaranty Warrant
      represents approximately 7% of the Company's outstanding Common Stock as of the
      Issue Date. As a result, giving effect to the exercise of the Guaranty Warrant
      (but not to the exercise of any other outstanding warrants or options), Sun
      Solunet now holds approximately 66% of the outstanding common stock of the
      Company (inclusive of the Guaranty Warrant).
The
      Company received no cash proceeds from the issuance of the Guaranty Warrant.
      If
      the entire Guaranty Warrant is exercised, the Company will receive a total
      of
      approximately $6,539. However, no assurance can be given that the Guaranty
      Warrant will be exercised.
The
      Guaranty Warrant was issued to Sun Solunet in partial consideration for a
      guaranty provided by an affiliate of Sun Solunet (the "Guarantor") on the
      revolving credit line of up to $13 million of the Company with Harris N.A.
      (formerly known as Harris Trust and Savings Bank) ("Harris Trust") pursuant to a
      letter agreement dated March 31, 2003 ("Credit Support Agreement"), among the
      Company, Sun Solunet and the Guarantor in a transaction exempt from registration
      pursuant to Regulation D promulgated under the Securities Act of 1933 and/or
      Section 4(2) of the Securities Act of 1933. The Credit Support Agreement was
      filed as an exhibit to the Company's April 2003 Current Report.
The
      number of shares exercisable under the Guaranty Warrant issued to Sun Solunet
      on
      the Issue Date was determined pursuant to a formula set forth in the Credit
      Support Agreement and is based on the amount that the outstanding guarantee
      provided on behalf of the Company by the Guarantor on the credit line with
      Harris Trust exceeds $3.0 million as of the Issue Date. Until the Company
      reduces the guaranteed debt to $3.0 million or less, it will be required to
      issue additional warrants to Sun Solunet at six-month intervals in the future
      (each May and November), according to formulas applicable to each such date,
      as
      disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended
      December 31, 2004. As of the Issue Date, the Company has outstanding borrowings
      on the Harris Trust revolving credit line of approximately $12
      million.
-2-
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
Form
                  of Warrant
10.01
Tenth
                  Amendment to Credit Agreement and Waiver of Defaults dated as of
                  November
                  11, 2005 among SANZ Inc., Solunet Storage Inc. and Wells Fargo
                  Bank,
                  National Association, acting through its Wells Fargo Business Credit
                  operating division
*
Incorporated
                  by reference to Annex A of Exhibit 2.3 to the Registrant's amended Current
                  Report on Form 8-K/A filed on April 3,
                  2003.
-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: November
              17, 2005
By:
/s/ Robert
              C. Ogden
Robert
                C. Ogden, Vice President, Chief Financial Officer and Secretary
-4-