UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
                                   (Mark One)

             [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

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

       For the transition period from ________________ to _______________

                                    000-27763
                            (Commission file number)

                              SITESTAR CORPORATION
        (Exact name of small business issuer as specified in its charter)

                 Nevada                                  88-0397234
      (State or other jurisdiction                      (IRS Employer
    of incorporation or organization)                Identification No.)

              16133 Ventura Boulevard, Suite 635, Encino, CA 91436
                    (Address of principal executive offices)

                                 (818) 981-4519
                           (Issuer's telephone number)


              (Former name, former address and former fiscal year,
                         if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act 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 [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity. As of March 31, 2001 - 66,175,158 shares of Common Stock

Transitional Small Business Disclosure Format (check one):  Yes [   ]   No [X]



<PAGE>


                              SITESTAR CORPORATION
                                      Index

                                                                          Page
                                                                         Number

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

         Condensed Consolidated Balance Sheet as of March 31, 2001         2-3

         Condensed Consolidated Statements of Operations for
         the three months ended March 31, 2001 and 2000                     4

         Condensed Consolidated Statements of Cash Flows for
         the three months ended March 31, 2001 and 2000                    5-6

         Notes to Condensed Consolidated Financial Statements              7-8

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                        9-12

Part II  OTHER INFORMATION

Item 1.  Legal Proceedings                                                 13

Item 2.  Change in Securities and Use of Proceeds                          13

Item 3.  Defaults Upon Senior Securities                                   13

Item 4.  Submission of Matters to a Vote of Security Holders               13

Item 5.  Other Information                                                 13

Item 6.  Exhibits and Reports on Form 8-K                                  14

SIGNATURES                                                                 14

Part III.  EXHIBITS


                                       1
<PAGE>


PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

                      SITESTAR CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2001
                                  (Unaudited)

                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                  $       217,218
   Marketable securities                                              677,012
   Accounts receivable, net                                           183,831
   Inventory                                                           81,230
   Other current assets                                                60,861
                                                              ---------------

     Total current assets                                           1,220,152

PROPERTY AND EQUIPMENT, net                                           463,226
DEFERRED LOAN COSTS                                                    46,097
CUSTOMER LIST, net                                                  1,064,998
EXCESS OF COST OVER FAIR VALUE OF
   NET ASSETS ACQUIRED, net                                         2,066,612
INVESTMENTS                                                           210,000
                                                              ---------------
TOTAL ASSETS                                                  $     5,071,085
                                                              ===============





See the accompanying notes to the consolidated financial statements

                                       2
<PAGE>


                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEET, Continued
                                 MARCH 31, 2001

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                  (Unaudited)

CURRENT LIABILITIES
   Accounts payable and accrued expenses                      $       389,523
   Deferred revenue                                                   138,482
   Convertible debenture                                              564,057
   Note payable - stockholders, current portion                       131,337
   Notes payable, current portion                                      52,125
   Capital lease obligations, current portion                          30,767
   Net liabilities of discontinued operations                          29,343
                                                              ---------------

     Total current liabilities                                      1,335,634
                                                              ---------------
NOTES PAYABLE - STOCKHOLDERS, less current portion                     46,367
NOTES PAYABLE, less current portion                                   412,335
CAPITAL LEASE OBLIGATIONS, less current portion                        13,036
                                                              ---------------

TOTAL LIABILITIES                                                   1,807,372
                                                              ---------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Preferred Stock, $.001 par value, 10,000,000 shares
     authorized, 0 shares issued and outstanding                            -
   Common Stock, $.001 par value, 75,000,000 shares
    authorized, 66,175,158 shares issued and outstanding               66,176
   Additional paid-in capital                                      12,615,554
   Accumulated deficit                                             (9,418,017)
                                                              ----------------

     Total stockholders' equity                                     3,263,713
                                                              ----------------
TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                                       $     5,071,085
                                                              ===============


See the accompanying notes to the consolidated financial statements


                                       3

<PAGE>
                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                  (Unaudited)

                                                      2001             2000
                                                 -------------   -------------
REVENUE                                          $     861,595   $     357,925

COST OF REVENUE                                        277,756         173,524
                                                 -------------   -------------

GROSS PROFIT                                           583,839         184,401

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                               694,825         656,710

LOSS (GAIN) FROM OPERATIONS OF BUSINESS
 TRANSFERRED UNDER CONTRACTUAL
 OBLIGATIONS                                                 -          42,233
                                                 -------------   -------------
LOSS FROM OPERATIONS                                  (110,986)       (514,542)

OTHER INCOME (EXPENSES)
  Gain on sale of assets                                     -          49,316
  Other income                                          83,204               -
  Increase in market value of marketable
    securities                                          41,242               -
  Interest expense                                    (102,773)        (37,569)
                                                 --------------  --------------
LOSS BEFORE DISCONTINUED
  OPERATIONS AND INCOME TAXES                          (89,313)       (502,795)

LOSS FROM OPERATIONS ON
  DISCONTINUED OPERATIONS                               36,965          11,576
                                                 -------------   -------------
LOSS BEFORE INCOME TAXES                              (126,278)       (514,371)

INCOME TAXES                                                 -               -
                                                 -------------   -------------
NET LOSS                                         $    (126,278)  $    (514,371)
                                                 ==============  ==============
BASIC AND DILUTED LOSS PER SHARE
  FROM CONTINUING OPERAIONS                      $       0.00    $       (0.02)

BASIC AND DILUTED LOSS PER SHARE
  FROM DISCONTINUED OPERATIONS                           0.00             0.00
                                                 -------------   -------------

BASIC AND DILUTED LOSS PER SHARE                 $       0.00    $       (0.02)
                                                 =============   ==============
WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                62,554,634      24,159,826
                                                 =============   =============

See the accompanying notes to the consolidated financial statements

                                       4
<PAGE>
                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                  (Unaudited)

                                                          2001          2000
                                                      -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                           $  (126,278)  $  (514,371)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
   Depreciation and amortization expense                  281,502       382,104
   Amortization of debt financing costs                    61,218             -
   Gain on the sale of assets                                   -       (49,316)
   Increase in market value of marketable securities      (41,242)            -
   Loss from operations of business transferred
     under contractual arrangements                             -        42,233
   Stock issued in lieu of compensation
      and professional fees                                42,582             -
   Value of common shares cancelled                       (83,204)            -
   Net purchases of marketable securities                 (71,959)            -
   (Increase) decrease in:
     Accounts receivable                                  (19,976)      (25,894)
     Inventory                                             11,633             -
     Other assets                                          39,998        (9,522)
   Increase (decrease) in:
     Accounts payable and accrued expenses               (112,106)       82,238
     Deferred revenue                                     (22,559)        5,557
     Advances from stockholder                                  -        59,427
                                                      -----------   -----------
Net cash used in operating activities                     (40,391)      (27,544)
                                                      ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                        (999)       (8,739)
   Proceeds from sale of assets                                 -        34,703
                                                      -----------   -----------
Net cash provided by (used in) investing activities          (999)       25,964
                                                      ------------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of notes payable                             (12,360)       (4,581)
   Repayment of notes payable - stockholders              (10,478)            -
   Payment on capital lease obligation                     (7,848)       (8,342)
                                                      ------------  ------------
Net cash provided by (used in) financing activities       (30,686)      (12,923)
                                                      ------------  ------------
NET (DECREASE) INCREASE IN CASH
   AND CASH EQUIVALENTS                                   (72,076)      (14,503)
CASH AND CASH EQUIVALENTS -
   BEGINNING OF PERIOD                                    289,294        45,328
                                                      -----------   -----------
CASH AND CASH EQUIVALENTS -
   END OF PERIOD                                      $   217,218   $    30,825
                                                      ===========   ============

See the accompanying notes to the consolidated financial statements

                                       5
<PAGE>



                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (continued)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

During the three  months  ended  March 31, 2001 and 2000,  the  Company  paid no
income taxes and interest of approximately $ 25,000 and $38,000, respectively.


NON-CASH INVESTING AND FINANCING TRANSCATIONS:

During the three months ended March 31, 2001, the Company converted  $192,443 of
the convertible  debenture into 4,581,984 shares of common stock, issued 875,098
shares of common stock for professional  services valued at $42,582 and canceled
1,457,562 shares of common stock valued at $83,204.





See the accompanying notes to the consolidated financial statements



                                       6
<PAGE>


                              SITESTAR CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The unaudited Condensed  Consolidated Financial Statements have been prepared by
Sitestar  Corporation  (the "Company" or "Sitestar"),  pursuant to the rules and
regulations of the Securities and Exchange Commission. The information furnished
herein reflects all  adjustments  (consisting of normal  recurring  accruals and
adjustments)  which are,  in the  opinion  of  management,  necessary  to fairly
present the operating results for the respective  periods.  Certain  information
and  footnote  disclosures  normally  present in annual  consolidated  financial
statements prepared in accordance with generally accepted accounting  principles
have been  omitted  pursuant to such rules and  regulations.  The results of the
three months ended March 31, 2001 are not necessarily  indicative of the results
to be expected for the full year ending December 31, 2001.


NOTE 2 - EARNINGS PER SHARE

In 1997, the Financial  Accounting  Standard Board ("FASB") issued  Statement of
Financial  Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No.
128 replaced the  previously  reported  primary and fully  diluted  earnings per
share with basic and diluted  earnings per share.  Unlike  primary  earnings per
share,  basic  earnings  per share  excludes  any  dilutive  effects of options,
warrants, and convertible securities. Diluted earnings per share is very similar
to the previously  reported fully diluted earnings per share. Basic earnings per
share is computed using the weighted-average number of common shares outstanding
during the period. Common equivalent shares are excluded from the computation if
their effect is anti-dilutive.  As of March 31, 2001 the Company has outstanding
500,000 warrants to purchase shares of common stock at $0.77.



                                       7
<PAGE>


                              SITESTAR CORPORATION
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued

NOTE 3 - CONVERTIBLE DEBENTURE

On May 11,  2000,  the Company  issued two  convertible  debentures  aggregating
$500,000.  The  debentures  bear interest at 12% per annum and are due on May 1,
2001. The debentures are convertible  into shares of the Company's  common stock
at a rate equal to the lowest of $.70 or 60% of the average of the three  lowest
closing bid prices for the  Company's  common  stock  during the 20 trading days
immediately preceding the conversion date. In addition,  the Company also issued
three-year  warrants to purchase an aggregate of 250,000  shares of common stock
at an  initial  exercise  price  of $0.77  per  share.  Due to the  preferential
conversion  feature of these  debentures  the Company has recognized a financing
charge of $242,857  (which  represents the value of additional  shares  issuable
upon  conversion  at the $.70  conversion  price  verses  the  number  of shares
issuable  upon  conversion  at the  market  value at the date of  issuance).  In
addition,  the warrants  issued in connection  with these  debentures  have been
valued at $121,543 using the  Black-Scholes  model.  Since these debentures were
convertible  on  issuance  the  preferential   conversion  costs  were  expensed
immediately and the value of the options is being  recognized as financing costs
over the term of the debentures.

On August 14,  2000,  the  Company  issued  another  two  convertible  debenture
aggregating  $500,000 to the holders of the  above-mentioned  debentures for the
same terms  described  above,  except for the due date of August  14,  2001.  In
connections  with these debentures the Company has recognized a financing charge
in connection with the  preferential  conversion  feature of $333,333 and valued
the 250,000 warrants issued in connection with these debentures at $13,332 using
the Black-Scholes model. Since these debentures were convertible on issuance the
preferential  conversion  costs were expensed  immediately  and the value of the
options is being recognized as financing costs over the term of the debentures.

From  inception  to March  31,  2001,  the  holder of the  debentures  converted
$435,943  in  principal  and  $36,533 of accrued  interest  into  6,924,903  and
652,363, respectively, shares of the Company's common stock.


NOTE 4 - COST OF REVENUE

In the  first  quarter  of  2001,  the  Company  recognized  a  credit  from its
communication   supplier  of  approximately   $49,700  for  a  retroactive  rate
adjustment.


NOTE 5 - DISCONTINUED OPERATIONS

The Company has recently  decided to spin off the content  services  division of
its wholly owned subsidiary,  Sitestar.net,  Inc. into a separate public company
focused in content development. The Company has accounted for this division as a
discontinued  operation in the accompanying  financial  statements.  The Company
does not expect to recognize a loss from the disposition of this division.

                                       8
<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations

GENERAL

         The following  discussion  and analysis  should be read in  conjunction
with the Company's  consolidated  financial statements and related footnotes for
the year ended  December 31, 2000  included in its Annual Report on Form 10-KSB.
The  discussion  of results,  causes and trends should not be construed to imply
any  conclusion  that such  results or trends will  necessarily  continue in the
future.

OVERVIEW

         We are an Internet holding company and focus on acquiring and investing
in Internet-based enterprises.  Our mission is to develop our Internet operating
subsidiaries  and future  investments in other Internet  enterprises into highly
focused and successful  stand-alone Internet businesses.  We intend to achieve a
fast-track development process by tapping the services, support and knowledge of
individuals  and  organizations  that have  extensive  experience  in developing
Internet concepts and technologies.

         In July 1999, we began to implement  our current  strategy of acquiring
and  investing  in emerging  Internet  based  enterprises  to create a broad and
diverse  set of core  Internet  businesses  that  deliver  a  variety  of online
solutions.   In   addition  to   developing   and   integrating   Internet-based
technologies,  our primary  objective  is to create a mix of Internet  operating
companies and Internet-related portfolio investments that will enhance the value
of our core holdings.

         Our Internet  services  subsidiaries  provide Internet  services to our
customers by  providing  Internet  access and enhanced  products and services to
small and medium sized  enterprises in selected high growth  markets.  We target
primarily small and medium sized enterprise  customers  located in selected high
growth  secondary  markets.  We currently  provide our  customers  with Internet
access and enhanced products and services in the mid-Atlantic area of the United
States.  We have  designed  our  comprehensive  suite of enhanced  products  and
services  to meet the  expanding  needs of our  customers  and to  increase  our
revenue per customer. The products and services we provide include:

o         Internet access services;
o         Web design services;
o         Web hosting services;
o         End to end e-commerce solutions;
o         Online marketing consulting; and
o         Management of mission critical Internet applications.

                                       9
<PAGE>

         Our  Internet  service  provider  operating  subsidiaries  derive their
income from the excess of the Internet  service  prices we charge our  customers
over  the  cost  of  service  we pay our  suppliers.  Additionally,  our  retail
customers  pay for services by cash or credit card while we pay our suppliers on
extended terms. As a result, we are able to increase our working capital between
the time we receive  payment for  services  and the time we are  required to pay
suppliers.  We also generate income from sales from our retail computer store in
Lynchburg, Virginia.

         We just recently  announced that we will spin off the content  services
division of our wholly  owned  subsidiary,  Sitestar.net,  Inc.  into a separate
public company focused in content  development.  This spin off should take place
in the second or third quarter of 2001.

RESULTS OF OPERATION

Three Months Ended March 31, 2001 vs. March 31, 2000

REVENUES.  Revenue  for the three  months  ended  March 31,  2001  increased  by
$503,670 or 140.7% from  $357,925  for the three  months ended March 31, 2000 to
$861,595  for the same  period  in  2001.  The  increase  is  attributed  to the
acquisition  of  Lynchburg.net  in November  2000,  which  generated  revenue of
approximately  $380,000 for the three  months ended March 31, 2001.  The revenue
from  Sitestar.net  for the three months ended March 31, 2001 also  increased by
approximately  $124,000  when  compared  to the same  period  in  2000.  Of this
$124,000  increase,  approximately  $60,000 relates to the sales of ZipEd, which
offers computer training to busy professionals.

COST OF  REVENUES.  Costs of revenue for the three  months  ended March 31, 2001
increased  by $104,232 or 60.1% from  $173,524  for the three months ended March
31,  2000 to  $277,756  for the  same  period  in  2001.  Cost of  revenue  as a
percentage of revenue  decreased from 48.5% for the three months ended March 31,
2000 to 32.2%  for the three  months  ended  March 31,  2001.  The  decrease  is
attributed  to  lower  communication  costs.  We were  able to  negotiate  lower
communications  costs  from our  major  supplier  in  throughout  2000  which as
significantly  improved  our gross  margin.  In the first  quarter  of 2001,  we
recognized a credit from our  communications  supplier of approximately  $49,700
for a retroactive rate  adjustment.  Without this adjustment cost of revenue for
the three months ended March 31, 2001 as a percentage of revenue would have been
38%.

SELLING,  GENERAL  AND  ADMINISTRATIVE.   Selling,  general  and  administrative
expenses for the three months ended March 31, 2001  increased by $38,115 or 5.8%
from $656,710 for the three months ended March 31, 2000 to $694,825 for the same
period in 2001.  The largest  component of selling,  general and  administrative
expenses is  depreciation  and  amortization  that  amounted to $382,104 for the
three  months  March 31,  2000 and  $281,502  for the same  period in 2001.  The
decrease in depreciation and amortization is due to the write down of intangible
assets at December  31,  2000 of  $1,860,000  related to assets of  Sitestar.net


                                       10
<PAGE>

which has resulted in a decrease in  amortization  expense  going  forward.  The
decrease in  amortization  of  intangible  assets at  Sitestar.net  is offset by
increase in amortization of intangible  assets  established with the purchase of
Lynchburg.net in November 2000. Excluding depreciation and amortization, selling
general and  administrative  expenses increased by $138,717 for the three months
ended March 31, 2001 as  compared to the same period in 2000.  This  increase is
due to the operating expenses associated with Lynchburg.net.

GAIN ON SALE OF ASSETS.  During the three months March 31, 2000, we sold certain
assets of our  Sitestar,  Inc.  division  and  recognized a gain on such sale of
$49,316. No such assets sale occurred in 2001.

OTHER INCOME. During the three months ended March 31, 2001, certain stockholders
surrendered a total of 1,457,562  valued at $83,204.  We determined the value of
the shares surrendered based on the market value of the common stock on the date
of surrender.  The surrendered shares were originally issued in connections with
our acquisition of Sitestar, Inc. in July 1999. We claimed that the stockholders
of Sitestar,  Inc. made incorrect  representation to us prior to our acquisition
of Sitestar,  Inc. and these stockholders have agreed to surrender approximately
one half of the shares issued in connection with this acquisition.

INCREASE IN VALUE OF MARKETABLE SECURITIES.  During the three months ended March
31, 2001, we recognized  $41,242 in recognized gains on the increase in value of
marketable  securities.  We have  classified  the  marketable  securities in our
portfolio as trading securities. No such gains were present in 2000.

INTEREST  EXPENSE.  Interest  expense for the three  months ended March 31, 2001
increased by $65,204 or 173.6% from $37,569 for the three months ended March 31,
2000 to  $102,773  for the  same  period  in 2001.  The  increase  is  primarily
attributed to the amortization of financing cost of $61,218  associated with the
convertible debentures.


LIQUIDITY AND CAPITAL RESOURCES

         Our business plan has required, and is expected to continue to require,
substantial capital to fund the growth of our operations,  capital expenditures,
and expansion of sales and marketing capabilities and acquisitions.

         On May 11,  2000  we  issued  two  convertible  debentures  aggregating
$500,000.  The  debentures  bear interest at 12% per annum and are due on May 1,
2001. The debentures are  convertible  into shares of our common stock at a rate
equal to the lowest of $.70 or 60% of the  average of the three  lowest  closing
bid prices for our common stock during the 20 trading days immediately preceding
the conversion date. In addition, we also issued three-year warrants to purchase
an aggregate of 250,000 shares of our common stock at an initial  exercise price
of  $0.77  per  share.  Due to the  preferential  conversion  feature  of  these
debentures we have recognized a financing  charge of $242,857 (which  represents
the value of additional  shares  issuable upon conversion at the $.70 conversion
price verses the number of shares  issuable upon  conversion at the market value
at the date of issuance).  In addition,  the warrants  issued in connection with
these debentures have been valued at $121,543 using the Black-Scholes  model and
such  expense  will be  recognized  as  financing  costs  over  the  term of the
debentures.

                                       11
<PAGE>

         On August 14, 2000, we issued another two convertible  debenture for an
aggregate of $500,000 to the holders of the  above-mentioned  debentures for the
same terms described above. The debenture bears interest at 12% per annum and is
due on August 14, 2001. In connections  with this debenture we have recognized a
financing  cost in  connection  with  the  preferential  conversion  feature  of
$333,333  and  valued  the  250,000  warrants  issued  in  connection  with this
debenture at $13,332 using the  Black-Scholes  model. The expense related to the
warrants will be recognized as financing costs over the term of the debenture.

         From  inception to  March  31, 2001,  the  holder  of  the   debentures
converted  $435,943 in principal and $36,533 of accrued  interest into 6,924,903
and 652,363, respectively,  shares of the Company's common stock. The holders of
the  debentures  also  intend to convert  the  remaining  principal  and accrued
interest into common stock.

         We believe that our existing cash and cash equivalents,  and short-term
investments,  will be  sufficient  to  meet  our  working  capital  and  capital
expenditure  requirements for at least the next 12 months.  Additional financing
may not be available when needed or, if available,  such financing may not be on
terms  favorable to our  shareholders  or us. If such  sources of financing  are
insufficient  or  unavailable,  or if we experience  shortfalls  in  anticipated
revenue or increases in anticipated  expenses,  we may need to slow down or stop
the  expansion of our  e-commerce  business,  including  our ISPs and reduce our
marketing and development efforts.
Any of these events could harm our business,  financial  condition or results of
operations.


Forward looking statements

         This report  contains  certain  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange  Act of  1934,  as  amended.  Stockholders  are
cautioned that all  forward-looking  statements  involve risks and  uncertainty,
including  without  limitation,  our ability to expand our customer  base,  make
strategic acquisitions,  general market conditions, and competition and pricing.
Although we believe the assumptions  underlying the  forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
contained in the report will prove to be accurate.


                                       12
<PAGE>

Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings

     None


Item 2.    Change in Securities and Use of Proceeds

     None


Item 3.    Defaults Upon Senior Securities

     None


Item 4.    Submission of Matters to a Vote of Security Holders

     Not applicable


Item 5.    Other Information

     Not applicable




                                       13
<PAGE>


Item 6.    Exhibits and Reports on Form 8-K

     (a) Exhibits

          None

     (b) Reports on Form 8-K

         On February 5, 2001,  the Company filed  Amendment No. 1 to the Current
Report on Form 8-K  dated  November  22,  2000 (the  "Report")  relating  to the
Company's  acquisition of FRE  Enterprises,  Inc.  ("FRE").  The purpose of this
Amendment was to amend Item 7(a) to provide the financial  statements of FRE and
Item 7(b) to provide the required pro forma  financial  information  relating to
the business  combination between the Company and FRE on September 30, 2000 that
were unavailable at the time the Company filed the Report.

         On February  16, 2001 the  Company  filed a Current  Report on Form 8-K
announcing  that  effective  February  13,  2001,  the Board of Directors of the
Company approved the change of accountants.  On February 13, 2001, management of
the  Company  dismissed  Merdinger  Fruchter  Rosen & Corso,  P.C.  and  engaged
Stonefield  Josephson,  Inc. of Santa  Monica,  California,  as its  independent
public accountants.



                                   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 thereunto duly authorized.

                              SITESTAR CORPORATION



                          By:  /s/ Frederick T. Manlunas
                               --------------------------
                               Frederick T. Manlunas
                               Chairman of the Board


Date:  May 15, 2001


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