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, 2002

[  ]  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.)

                 15303     VENTURA BOULEVARD, SUITE 1510, SHERMAN OAKS, CA 91403
                           (Address of principal executive offices)

                                 (818) 380-8180
                           (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, 2002 - 98,624,892 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, 2002         2-3

         Condensed Consolidated Statements of Operations for
         the three months ended March 31, 2002 and 2001                     4

         Condensed Consolidated Statements of Cash Flows for
         the three months ended March 31, 2002 and 2001                    5-6

         Notes to Condensed Consolidated Financial Statements              7-9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                        10-15

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                 15

Item 2.  Change in Securities and Use of Proceeds                          15

Item 3.  Defaults Upon Senior Securities                                   15

Item 4.  Submission of Matters to a Vote of Security Holders               15

Item 5.  Other Information                                                 15

Item 6.  Exhibits and Reports on Form 8-K                                  15

SIGNATURES                                                                 16

Part III.  EXHIBITS





                                       1
<PAGE>



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements


                      SITESTAR CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2002
                                  (Unaudited)

                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                     $     309,074
   Accounts receivable, net of allowance of $465,545                   406,938
   Inventory                                                           112,277
   Other current assets                                                114,252
                                                                 -------------

     Total current assets                                              942,541

PROPERTY AND EQUIPMENT, net                                            404,379
CUSTOMER LIST, net                                                     953,535
GOODWILL                                                             2,472,719
INVESTMENTS                                                             95,000
                                                                 -------------

TOTAL ASSETS                                                     $   4,868,174
                                                                 =============















       See the accompanying notes to the consolidated financial statements


                                        2
<PAGE>


                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEET, CONTINUED
                                 MARCH 31, 2002
                                  (Unaudited)


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
   Accounts payable and accrued expenses                         $     474,256
   Deferred revenue                                                    158,572
   Convertible debenture                                               151,612
   Line of credit                                                       78,672
   Note payable - stockholders, current portion                        123,078
   Notes payable, current portion                                      190,489
   Capital lease obligations, current portion                           13,740
                                                                 -------------

     Total current liabilities                                       1,190,419

NOTES PAYABLE - STOCKHOLDERS, less current portion                     443,957
NOTES PAYABLE, less current portion                                    165,939
CAPITAL LEASE OBLIGATIONS, less current portion                          8,083
                                                                 -------------

TOTAL LIABILITIES                                                    1,808,398
                                                                 -------------

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, 300,000,000 shares
    authorized, 98,624,892 shares issued and outstanding                98,625
   Additional paid-in capital                                       13,608,541
   Accumulated deficit                                             (10,647,390)
                                                                 --------------

     Total stockholders' equity                                      3,059,776
                                                                 -------------
TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                                          $   4,868,174
                                                                 =============




       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, 2002 AND 2001
                                  (Unaudited)

                                                        2002          2001
                                                   ------------  -------------


REVENUE                                            $  1,135,232  $     912,174

COST OF REVENUE                                         528,165        327,980
                                                   ------------  -------------

GROSS PROFIT                                            607,067        584,194

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                                636,453        732,145
                                                   ------------  -------------

LOSS FROM OPERATIONS                                    (29,386)      (147,951)

OTHER INCOME (EXPENSES)
  Other income                                                -         83,204
  Increase in market value of marketable
   securities                                                 -         41,242
  Interest expense                                      (54,473)      (102,773)
                                                   ------------- -------------

LOSS BEFORE INCOME TAXES                                (83,859)      (126,278)

INCOME TAXES                                                  -              -
                                                   ------------  -------------

NET LOSS                                           $    (83,859) $    (126,278)
                                                   ============  =============

BASIC AND DILUTED LOSS PER SHARE                   $      (0.00) $       (0.00)
                                                   ============  =============

WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                 98,116,426     62,554,634
                                                   ============  =============






       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, 2002 AND 2001
                                  (Unaudited)

                                                         2002          2001
                                                     ----------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                           $  (83,859)  $   (126,278)
  Adjustments to reconcile net loss to net
   cash provided by (used in) operating activities:
    Depreciation and amortization expense               187,246        281,502
    Amortization of debt financing costs                      -         61,218
    Increase in market value of marketable
     securities                                               -        (41,242)
    Stock issued in lieu of compensation
     and professional fees                              125,000         42,582
  Value of common shares cancelled                            -        (83,204)
  Net purchases of marketable securities                      -        (71,959)
  (Increase) decrease in:
    Accounts receivable                                  16,757        (19,976)
    Inventory                                           (22,277)        11,633
    Other assets                                        (22,888)        39,998
  Increase (decrease) in:
    Accounts payable and accrued expenses               108,528       (112,106)
    Deferred revenue                                     (4,022)       (22,559)
                                                     ----------   ------------
Net cash provided by (used in) operating activities     304,485        (40,391)
                                                     ----------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                       -              (999)
                                                     ----------   ------------
Net cash provided by (used in) investing activities        -              (999)
                                                     ----------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net change in line of credit                           (1,137)             -
  Repayment of notes payable                            (54,004)       (12,360)
  Repayment of convertible debenture                   (325,000)             -
  Repayment of notes payable - stockholders             (10,473)       (10,478)
  Payment on capital lease obligation                   (10,752)        (7,848)
                                                     ----------   ------------
Net cash provided by (used in) financing activities    (401,366)      (30,686)
                                                     ----------   ------------
NET (DECREASE) INCREASE IN CASH
   AND CASH EQUIVALENTS                                 (96,881)       (72,076)

CASH AND CASH EQUIVALENTS -
   BEGINNING OF PERIOD                                  405,955        289,294
                                                     ----------   ------------
CASH AND CASH EQUIVALENTS -
   END OF PERIOD                                     $  309,074   $    217,218
                                                     ==========   ============

       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, 2002 AND 2001 (CONTINUED)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

During the three  months  ended  March 31, 2002 and 2001,  the  Company  paid no
income taxes and interest of approximately $ 54,000 and $ 25,000, respectively.


NON-CASH INVESTING AND FINANCING TRANSACTIONS:

During the three  months  ended March 31,  2002,  the Company  issued  3,720,238
shares of  common  stock for  executive  compensation  of  $125,000  and  issued
2,000,000 shares of common stock to the original Sitestar.net  shareholders that
represented  the  contingent  shares to be issued if no  additional  liabilities
arose  during  the  first two years  after the  acquisition.  The value of these
shares issued was $60,000 which is recorded as additional goodwill.

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,  issue 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.  These  financial
statements should be read in conjunction with the audited consolidated financial
statements  and footnotes  for the year ended  December 31, 2001 included in the
Company's  Annual  Report on Form 10-KSB.  The results of the three months ended
March 31, 2002 are not necessarily  indicative of the results to be expected for
the full year ending December 31, 2002.


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, 2002 the Company has outstanding
500,000 warrants to purchase shares of common stock at $0.77.


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 were due on May 1,
2001. 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.

As of March  31,  2002,  the  holder of the  debentures  converted  $513,388  in
principal  and  $90,822 of  accrued  interest  into  13,100,906  and  5,176,365,
respectively,  shares of the Company's common stock.  Also as of March 31, 2002,
the Company has repaid $335,000 of this debenture in cash.




                                       7
<PAGE>

                              SITESTAR CORPORATION
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 4 - COMMON STOCK

During the three  months  ended March 31,  2002,  the Company  issued  3,720,238
shares of common stock for executive  compensation of $125,000 which were valued
at the market value at the date of issuance.

In addition, in January 2002 the Company issued 2,000,000 shares of common stock
to the original Sitestar.net shareholders that represented the contingent shares
to be issued if no additional liabilities arose during the first two years after
the acquisition.  The value of these shares issued was $60,000 which is recorded
as additional goodwill in the accompanying  financial  statements.  The value of
the shares issued was the market value of the shares at the date of issuance.


NOTE 5 - SEGMENT INFORMATION

The Company has four business units that have separate  management and reporting
infrastructures  that offer different products and services.  The business units
have  been  aggregated  into  four  reportable  segments:  Corporate,  Internet,
Development and Retail.  The Corporate group is the holding company and oversees
the operating of the other  business  units.  The Corporate  group also arranges
financing for the entire  organization.  The Internet  group  provides  Internet
access to customers in the  Martinsville  and Lynchburg,  Virginia and Mt. Airy,
North  Carolina  areas.  The  Development   group  provides   customer  software
programming  to companies,  principally  in the  manufacturing  industries.  The
Retail group operates a retail computer store in Lynchburg,  Virginia as well as
providing computer training to customers.

The Company evaluates the performance of its operating  segments based on income
from operations,  before income taxes, accounting changes,  non-recurring items,
and interest income and expense.

Summarized financial information concerning the Company's reportable segments is
shown in the following table for the three months ended March 31, 2002 and 2001:

<TABLE>
<CAPTION>

                                                  March 31, 2002
                            --------------------------------------------------------------
                             Corporate   Internet    Development     Retail   Consolidated
                            ----------  ----------   -----------   ---------  ------------
    <S>                     <C>         <C>          <C>           <C>        <C>
    Revenue                 $        -  $  866,466   $    81,914   $ 186,852  $  1,135,232
    Operating income (loss) $ (207,302) $  129,469   $     1,062   $  47,385  $    (29,386)
    Depreciation and
      amortization          $    1,320  $  173,194   $    11,832   $     900  $    187,246
    Interest expense        $   (7,012) $  (47,322)  $      (180)  $      41  $    (54,473)
    Goodwill                $        -  $3,588,700   $         -   $       -  $  3,588,700
    Identifiable assets     $  301,366  $4,164,758   $    28,880   $ 373,170  $  4,868,174
</TABLE>


                                  8
<PAGE>


                              SITESTAR CORPORATION
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 5 - SEGMENT INFORMATION (Continued)

<TABLE>
<CAPTION>
                                                  March 31, 2001
                            --------------------------------------------------------------
                             Corporate   Internet    Development     Retail   Consolidated
                            ----------  ----------   -----------   ---------  ------------
    <S>                     <C>         <C>          <C>           <C>        <C>
    Revenue                 $        -  $  666,646   $    50,579   $ 194,949  $    912,174
    Operating loss          $ (217,638) $   78,205   $   (36,965)  $  28,447  $   (147,951)
    Depreciation and
      amortization          $      825  $  278,029   $     1,748   $     900  $    281,502
    Interest expense        $   82,627  $   20,836   $         -   $    (690) $    102,773
</TABLE>


NOTE 6 - RECENTLY ISSUED ACCOUNTING PROUNCEMENTS

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets." SFAS No. 142 changes the accounting  for goodwill from an  amortization
method to an impairment-only approach.  Amortization of goodwill (which amounted
to approximately  $119,000 per quarter in the past), including goodwill recorded
in past business combinations,  will cease upon adoption of this statement.  The
Company  adopted  SFAS No.  142 on  January  1,  2002  and as a result  will not
amortize goodwill after December 31, 2001.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment of
Long-Lived  Assets  and for  Long-Lived  Assets  to Be  Disposed  Of."  SFAS 144
addresses  financial  accounting and reporting for the impairment or disposal of
long-lived  assets.  SFAS 144 requires  that  long-lived  assets be reviewed for
impairment  whenever  events  or  changes  in  circumstances  indicate  that its
carrying  amount may not be  recoverable  and is measured by a comparison of the
carrying amount of an asset to undiscounted future net cash flows expected to be
generated by the asset. If the carrying amount of an asset exceeds its estimated
future  undiscounted  cash flows,  an impairment  charge is  recognized  for the
amount by which the carrying  amount of the asset  exceeds the fair value of the
asset. SFAS 144 requires companies to separately report discontinued  operations
and extends  that  reporting  to a  component  of an entity that either has been
disposed  of (by  sales,  abandonment  or in a  distribution  to  owners)  or is
classified as held for sale. Assets to be disclosed are reported at the lower of
the  carrying  amount or fair value less costs to sell.  The Company has adopted
SFAS 144 on January 1, 2002.  The  provisions of this  statement for assets held
for sale or other  disposal  generally are required to be applied  prospectively
after the adoption date to newly initiated disposal  activities and,  therefore,
will depend on future actions  initiated by management.  As a result,  we cannot
determine  the  potential  effects  that  adoption  of SFAS 144 will have on our
consolidated financial statements with respect to future disposal decisions,  if
any.




                                       9
<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 our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2001 included in our 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 a  technology  holding  company with a broad  strategy of  acquiring  and
investing in technology related  enterprises.  Our primary strategy is acquiring
and operating small independent Internet Service Providers in the rural areas of
the  mid-Atlantic  region.  Our specific mission is to develop our operating ISP
subsidiaries and future ISP  acquisitions  into a successful  collaborative  ISP
network.  We intend to  achieve  this  success  by  harnessing  the  synergistic
potentials  that  exists  among  these  acquisitions  by  consolidating  all the
administrative functions and streamlining the corporate functions that may exist
with each acquisition.

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

Our Internet operating  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.



                                       10
<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 the  development  of computer  software for companies
principally  in the  manufacturing  industries  and from  sales  from our retail
computer store in Lynchburg, Virginia and Mt. Airy, North Carolina.

On July 1, 2001, we acquired 100% of the equity and voting  interest of Advanced
Internet  Services,  Inc., a North Carolina  corporation which is a successor in
interest to two sole proprietorships one having the same name as the corporation
and the other with the name  Professional  Data Systems  (collectively  "ADVI").
ADVI is an Internet service  provider  located in Mt. Airy, North Carolina.  The
purchase price was $965,980,  which consisted of $150,000 in cash,  6,021,818 of
our common shares valued at $301,091 a non-interest  bearing promissory note for
$1,199,990 payable in 24 quarterly installments of $49,995 and transaction costs
of $30,000.  However,  due to the  non-interest  bearing  nature of the note, we
imputed a discount rate of 36% to calculate the present value of the note.  This
discount  rate is an  estimate of our  current  cost of  capital.  Based on this
calculation, the present value of the non-interest promissory note is $484,889.

We believe the acquisition of ADVI, with about 3,000 subscribers,  enhanced ours
primary strategy of consolidating  small Internet service providers in the rural
markets of the mid-Atlantic  region by enlarging our service footprint.  We also
believe  this  transaction  opened  other  acquisition  opportunities  for us to
further  increase  our presence in the northern  areas of North  Carolina.  This
recent  acquisition  increases our Internet  access customer base to over 15,000
subscribers.  This acquisition included goodwill of $702,642 that is the premium
we paid to have the  opportunity  to  generate  revenues  and  earnings  in this
market.  Furthermore,  this  acquisition  generated  us cost  savings  with  the
integration and consolidation of ADVI's corporate and  administrative  functions
with our existing  infrastructure.  This estimated cost savings,  along with the
accretive  nature of the  transaction  from an operating cash flow  perspective,
will further allow us to enhance our revenue  streams and increase our operating
cash flow.


RESULTS OF OPERATIONS

        The  following  tables show  financial  data for the three  months ended
March 31, 2002 and 2001.  Operating  results for any period are not  necessarily
indicative of results for any future period.





                                       11
<PAGE>

<TABLE>
<CAPTION>

                                      FOR THE THREE MONTHS ENDED MARCH 31, 2002
                               CORPORATE  INTERNET   DEVELOPMENT    RETAIL       TOTAL
                               ---------  ---------  -----------   ---------  -----------
<S>                            <C>        <C>        <C>           <C>        <C>
Revenue                        $       -  $ 866,466  $    81,914   $ 186,852  $ 1,135,232
Cost of revenue                        -    383,236       37,313     107,616      528,165
                               ---------  ---------  -----------   ---------  -----------
Gross profit                           -    483,230       44,601      79,236      607,067
Operating expenses               207,302    353,761       43,539      31,851      636,453
                               ---------  ---------  -----------   ---------  -----------
Income (loss) from operations   (207,302)   129,469        1,062      47,385      (29,386)
Other income (expense)         (   7,012)   (47,322)        (180)         41      (54,473)
                               ---------  ---------  -----------   ---------  -----------
Net income (loss)              $(214,314) $  82,147  $       882   $  47,426  $   (83,859)
                               =========  =========  ===========   =========  ============

EBITDA                         $(205,982) $ 302,663  $    12,894   $  48,285  $   157,860
   Corporate expenses paid
     with common stock           125,000          -            -           -      125,000
                               ---------  ---------  -----------   ---------  -----------
Adjusted EBITDA                $ (80,982) $ 302,663  $    12,894   $  48,285  $   282,860
                               =========  =========  ===========   =========  ============
</TABLE>


<TABLE>
<CAPTION>
                                      FOR THE THREE MONTHS ENDED MARCH 31, 2001
                               CORPORATE  INTERNET   DEVELOPMENT    RETAIL       TOTAL
                               ---------  ---------  -----------   ---------  -----------
<S>                            <C>        <C>        <C>           <C>        <C>
Revenue                        $       -  $ 666,646  $    50,579   $ 194,949  $   912,174
Cost of revenue                        -    190,374       50,224      87,382      327,980
                               ---------  ---------  -----------   ---------  -----------
Gross profit                           -    476,272          355     107,567      584,194
Operating expenses               217,638    398,067       37,320      79,120      732,145
                               ---------  ---------  -----------   ---------  -----------
Income (loss) from operations   (217,638)    78,205      (36,965)     28,447     (147,951)
Other income (expense)            41,819    (20,836)           -         690       21,673
                               ---------  ---------  -----------   ---------  -----------
Net income (loss)              $(175,819)    57,369      (36,965)     29,137  $  (126,278)
                               =========  =========  ===========   =========  ===========

EBITDA                         $ (92,367)   357,982      (36,965)     29,347      257,997
   Corporate expenses paid
     with common stock            42,542          -            -           -       42,542
                               ---------  ---------  -----------   ---------  -----------
Adjusted EBITDA                $ (49,825) $ 357,982  $   (36,965)  $  29,347  $   300,539
                               =========  =========  ===========   =========  ===========
</TABLE>


                                       12
<PAGE>

-------------------
(1) EBITDA  (earnings  before interest,  taxes,  depreciation and  amortization)
consists  of  revenue  less cost of revenue  and  operating  expense.  EBITDA is
provided  because it is a measure  commonly  used by  investors  to analyze  and
compare companies on the basis of operating performance.  EBITDA is presented to
enhance  an  understanding  of our  operating  results  and is not  intended  to
represent  cash flows or results of operations  in accordance  with GAAP for the
periods indicated. EBITDA is not a measurement under GAAP and is not necessarily
comparable with similarly titled measures for other companies. See Liquidity and
Capital  Resource  section  for  further   discussion  of  cash  generated  from
operations.

Adjusted EBITDA represents earnings/(loss) before depreciation and amortization,
interest  income  and  expense,   income  tax  expense   (benefit),   equity  in
profit/(loss)  of  unconsolidated  affiliates,  impairment in value of goodwill,
stock based compensation, gain/(loss) on assets and other extraordinary items.

Adjusted  EBITDA is presented  because the Company  believes it is an acceptable
financial  indicator  of the  Company's  ability to meet  future  debt  service,
capital  expenditure  and working capital  requirements.  Adjusted EBITDA is not
determined in accordance  with  generally  accepted  accounting  principles.  It
should not be considered in isolation or as an  alternative  to net income as an
indicator  of  operating  performance  or as an  alternative  to cash  flow as a
measure  of  liquidity.  In  addition,  the  Company's  adjusted  EBITDA  is not
comparable  to those of other  companies,  which may determine  adjusted  EBITDA
differently.


THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO MARCH 31, 2001

REVENUE. Revenue for the three months ended March 31, 2002 increased by $223,058
or 24.5% from  $912,174 for the three months ended March 31, 2001 to  $1,135,232
for the same period in 2002.  The increase is attributed to the  acquisition  of
Advance  Internet  in  July  2001.  The  Internet  revenue   generated  by  this
acquisitions  in the 1st quarter of 2002 was  $279,547.  We expect our  Internet
revenue to continue to grow  through an increase in our  subscriber  base and by
future acquisitions.

COST OF  REVENUE.  Costs of revenue  for the three  months  ended March 31, 2002
increased  by $200,185 or 61.0% from  $327,980  for the three months ended March
31, 2001 to $528,165  for the same period in 2002.  As a  percentage  of revenue
cost of revenue has increased from 35.9% to 46.5%.  The increase as a percentage
of revenue is  principally  due some rebates we received from our major supplier
of Internet services during the 1st quarter of 2001.

OPERATING EXPENSES. Operating expenses for the three months ended March 31, 2002
decreased by $95,692 or 13.1% from $732,145 for the three months ended March 31,
2001 to $636,453 for the same period in 2002. The largest component of operating
expense is depreciation and amortization that amounted to $281,502 for the three
months  ended  March 31,  2001 and  $187,246  for the same  period in 2002.  The
decrease in depreciation and amortization is due to the adoption of SFAS No. 142
on January 1, 2002 which no longer requires us to amortize our goodwill balance.


                                       13
<PAGE>

OTHER INCOME. During the three months ended March 31, 2001, certain stockholders
surrendered  a total of 1,457,562  shares of common stock 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. .

GAIN FROM MARKETABLE  SECURITIES.  During the three months ended March 31, 2001,
we recognized $41,242 in gains on the sale of marketable securities.  During the
three  months  ended  March  31,  2002  we  recognized  no such  gains.  We have
classified the marketable securities in our portfolio as trading securities.

INTEREST  EXPENSE.  Interest  expense for the three  months ended March 31, 2002
decreased by $48,300 from  $102,773 for the three months ended March 31, 2001 to
$54,473  for the same  period  in 2002.  This  decrease  was a result of no loan
amortization  charges  related  to the  convertible  debenture  during the three
months ended March 31, 2002.


LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2002, we generated  EBITDA at our operating
subsidiary level of $363,842.  This amount was offset by EBITDA at the corporate
level of  $(205,982).  However,  at the  corporate  level  we paid  for  certain
salaries of $125,000 by issuing  shares of our common  stock  rather than paying
these expenses with cash.  After taking into account these non-cash  expenses at
the corporate  level the actual net cash spent at the  corporate  level was only
$80,982.  The following table  illustrates the actual cash flow generated during
the three months ended March 31, 2002:

    EBITDA generated at the operating subsidiary level       $       363,842
    EBITDA generated at the corporate level                         (205,982)
    Corporate expenses paid with common stock                        125,000
                                                             ---------------
             ADJUSTED EBITDA                                 $       282,860
                                                             ===============


During the three  months  ended  March 31,  2002,  we paid down our  convertible
debenture  by  $325,000.  We also  repaid  notes  payable  and  notes  payable -
stockholders of approximately $54,000 and $10,000 respectively.

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 were due on May 1, 2001. 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 were due on
August 14, 2001. These convertible  debentures are currently callable at anytime
since it is past  its  maturity  date.  The  debenture  holders  can call  these
debentures  upon  sufficient  written  advance  notice  as  agreed  upon  in the
convertible debenture agreement.


                                       14
<PAGE>

As of March  31,  2002,  the  holder of the  debentures  converted  $513,388  in
principal  and  $90,822 of  accrued  interest  into  13,100,906  and  5,176,365,
respectively,  shares of the Company's common stock.  Also as of March 31, 2002,
the Company has repaid $335,000 of this debenture in cash.

We  believe  that  our  existing  cash  and  cash  equivalents,  and  short-term
investments  and cash  flow  from  operations,  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 Internet  Service  Providers 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.


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


                                       15
<PAGE>


Item 5.  Other Information

     Not applicable


Item 6.  Exhibits and Reports on Form 8-K

     (a)     Exhibits

          None

     (b)     Reports on Form 8-K

          None








                                       16
<PAGE>



                                   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 20, 2002





                                       17