1003390--9/28/2007--SILVERSTAR_HOLDINGS

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RISKS ASSOCIATED WITH OUR SUBSIDIARIES Many of our titles have short lifecycles and fail to generate significant revenues. We may fail to anticipate changing consumer preferences. We may not be able to protect our proprietary rights. We may be subject to intellectual propriety claims. Rating systems for entertainment software, potential legislation and consumer opposition could inhibit sales of our products. We operate in a highly competitive industry. If our products contain defects, our business could be harmed significantly. We rely on independent third parties to develop a number of our software products. The software game market has gravitated towards mass merchant retailers. We may face difficultly obtaining access to retail shelf space necessary to market and sell our products effectively. We permit our customers to return our products and to receive pricing concessions which could reduce our net revenues and results of operations. Technology changes rapidly in our business, and if we fail to anticipate or successfully implement new technologies, the quality, timeliness and competitiveness of our products and services will suffer. Our business is highly dependent on the success, timely release and availability of new video game platforms, on the continued availability of existing video game platforms, as well as our ability to have commercially successful products developed for these platforms. The video game hardware manufacturers set the royalty rates and other fees that we must pay to publish games for their platforms, and therefore have significant influence on our costs. If one or more of these manufacturers adopt a different fee structure for future game consoles, our profitability will be materially impacted. RISKS ASSOCIATED WITH OUR OPERATIONS There is no assurance that we can successfully implement our business plan that calls for the acquisition of additional entertainment software titles and businesses to create a larger presence in the marketplace. If we are unable to successfully integrate acquisitions, our revenue growth and future profitability may be negatively impacted. Covenants in our agreements relating to our Variable Rate Secured Convertible Debentures due April 30, 2010 may limit our flexibility and prevent us from taking certain actions, which could adversely affect our ability to execute our business strategy . Since a significant amount of our assets are denominated in foreign currency and since we conduct business internationally, we are subject to currency and foreign regulatory risks. We currently are disputing a tax liability with the South African revenue service and we may be forced to expense additional amounts in this matter. We depend on the continued services of key personnel. RISKS RELATING TO OUR COMMON STOCK The price of our common stock is highly volatile. Since we do not intend to declare dividends in the foreseeable future, the return on your investment will depend upon the appreciation of the market price of your shares. Anti-takeover measures in our Bye-laws could adversely affect the voting power of the holders of our common stock. The rights of shareholders under Bermuda law may not be as extensive as the rights of shareholders under the laws of jurisdictions in the United States. Our common stock may be delisted from NASDAQ. Our common stock may become subject to the Commission s penny stock rules.

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1003390--9/28/2007--SILVERSTAR_HOLDINGS_LTD