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 September 30, 2000

      [ ] 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 November 14, 2000 - 26,953,657 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

       Condensed Consolidated Balance Sheet as of September 30, 2000      3-4

       Condensed Consolidated Statements of Operations for
       the three months ended September 30, 2000 and 1999
       (Unaudited)                                                        5

       Condensed Consolidated Statements of Operations for
       the nine months ended September 30, 2000 and 1999 (Unaudited)      6

       Condensed Consolidated Statements of Cash Flows for
       the nine months ended September 30, 2000 and 1999 (Unaudited)      7-8

       Notes to Condensed Consolidated Financial Statements               9-10

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                        11-16

Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                             17

Item 2.    Change in Securities and Use of Proceeds                      17

Item 3.    Defaults Upon Senior Securities                               17

Item 4.    Submission of Matters to a Vote of Security Holders           17

Item 5.    Other Information                                             17

Item 6.    Exhibits and Reports on Form 8-K                              17

SIGNATURES                                                               18

Part III.  EXHIBITS

                                       2

<PAGE>


PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

                      SITESTAR CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2000


                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                  $        77,455
   Marketable securities                                              705,697
   Accounts receivable, less allowance for
     doubtful accounts of $140,000                                    142,199
   Other current assets                                                68,822
                                                              ---------------

     Total current assets                                             994,173

PROPERTY AND EQUIPMENT, net                                           396,913
DEFERRED LOAN COSTS                                                   271,565
CUSTOMER LIST, net                                                  1,930,085
EXCESS OF COST OVER FAIR VALUE OF
   NET ASSETS ACQUIRED, net                                         2,358,621
INVESTMENTS                                                           160,000
OTHER ASSETS                                                           16,045
                                                              ---------------

TOTAL ASSETS                                                  $     6,127,402
                                                              ===============






       See the accompanying notes to the consolidated financial statements



                                       3
<PAGE>


                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEET, Continued
                               SEPTEMBER 30, 2000

                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
   Accounts payable                                           $       195,604
   Accrued expenses                                                   201,066
   Deferred revenue                                                   121,309
   Due to stockholder                                                  20,000
   Convertible debenture                                              985,000
   Note payable - stockholders, current portion                       233,025
   Notes payable, current portion                                      72,050
   Capital lease obligations, current portion                          49,185
                                                              ---------------

     Total current liabilities                                      1,877,239

NOTES PAYABLE - STOCKHOLDERS, less current portion                     53,884
NOTES PAYABLE, less current portion                                   422,823
CAPITAL LEASE OBLIGATIONS, less current portion                        10,068
                                                              ---------------

TOTAL LIABILITIES                                                   2,364,014
                                                              ---------------
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, 25,735,816 shares issued and outstanding               25,736
   Additional paid-in capital                                       9,127,327
   Accumulated deficit                                             (5,389,675)
                                                              ---------------

     Total stockholders' equity                                     3,763,388
                                                              ---------------
TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                                       $     6,127,402
                                                              ===============


See the accompanying notes to the consolidated financial statements



                                       4
<PAGE>

<TABLE>
<CAPTION>
                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

                                                                 2000              1999
                                                          ---------------   ---------------

<S>                                                       <C>               <C>
REVENUE                                                   $       474,387   $        18,684

COST OF REVENUE                                                   203,082            22,740
                                                          ---------------   ---------------

GROSS PROFIT (LOSS)                                               271,305            (4,056)

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                                          743,710         2,094,687

LOSS (GAIN) FROM OPERATIONS OF BUSINESS
 TRANSFERRED UNDER CONTRACTUAL
 OBLIGATIONS                                                            -           (53,223)
                                                          ---------------   ----------------

LOSS FROM OPERATIONS                                             (472,405)       (2,045,520)

OTHER INCOME (EXPENSES)
  Gain on sale of assets                                                -                 -
  Increase in market value of marketable securities                30,697                 -
  Interest expense                                               (149,445)          (11,772)
                                                          ----------------  ----------------

LOSS BEFORE INCOME TAXES                                         (591,153)       (2,057,292)

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

NET LOSS                                                  $      (591,153)  $    (2,057,292)
                                                          ================  ================

BASIC AND DILUTED LOSS PER SHARE                          $        (0.02)   $         (0.11)
                                                          ===============   ================

WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                           24,999,007        18,600,036
                                                          ===============   ===============
</TABLE>

      See the accompanying notes to the consolidated financial statements

                                       5
<PAGE>

<TABLE>
<CAPTION>
                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

                                                                  2000              1999
                                                          ---------------   ---------------

<S>                                                       <C>               <C>
REVENUE                                                   $     1,290,774   $        18,684

COST OF REVENUE                                                   639,467            22,740
                                                          ---------------   ---------------

GROSS PROFIT (LOSS)                                               651,307            (4,056)

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                                        2,090,377         2,198,517

LOSS FROM OPERATIONS OF BUSINESS
 TRANSFERRED UNDER CONTRACTUAL
 OBLIGATIONS                                                       42,233            40,786
                                                          ---------------   ---------------

LOSS FROM OPERATIONS                                           (1,481,303)       (2,243,359)

OTHER INCOME (EXPENSES)
  Gain on sale of assets                                          363,831                 -
  Increase in market value of marketable securities                30,697                 -
  Interest expense                                               (252,648)          (11,772)
                                                          ----------------  ----------------

LOSS BEFORE INCOME TAXES                                       (1,339,423)       (2,255,131)

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

NET LOSS                                                  $    (1,339,423)  $    (2,255,131)
                                                          ================  ================

BASIC AND DILUTED LOSS PER SHARE                          $        (0.05)   $         (0.12)
                                                          ===============   ================

WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                           24,507,376        18,600,036
                                                          ===============   ===============
</TABLE>

      See the accompanying notes to the consolidated financial statements

                                       6
<PAGE>
<TABLE>
<CAPTION>
                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

                                                                 2000              1999
                                                          ---------------   ---------------
<S>                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                               $    (1,339,423)  $    (2,255,131)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
   Depreciation and amortization expense                        1,147,082             8,273
   Compensation expense paid by principal shareholders                            2,000,000
   Amortization of debt financing costs                           148,792                 -
   Gain on the sale of assets                                    (363,831)                -
   Increase in market value of marketable securities              (30,697)
   Loss from operations of business transferred under
     contractual arrangements                                      42,233            40,786
Stock issued in lieu of compensation
      and professional fees                                       224,313                 -
   (Increase) decrease in:
     Accounts receivable                                           (7,925)                -
   Other assets                                                     2,801                 -
   Increase (decrease) in:
     Accounts payable and accrued expenses                        102,429          (149,137)
     Deferred revenue                                             (37,650)                -
     Advances from stockholder                                          -            27,000
                                                          ---------------   ---------------
Net cash used in operating activities                            (111,876)         (328,209)
                                                          ----------------  ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                             (26,446)           (5,830)
   Purchase of  marketable securities                            (675,000)          (75,000)
   Proceeds from sale of assets                                    34,703                 -
                                                          ---------------   ---------------
Net cash used in investing activities                            (666,743)          (80,830)
                                                          ----------------  ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in book overdraft                                           -            36,973
   Advances from stockholder, net                                  24,450           215,696
   Proceeds from notes payable                                          -           416,309
   Proceeds from convertible debenture                          1,000,000                 -
   Proceeds from capital contributions                                              155,671
   Payment of loan fees                                          (110,000)                -
   Repayment of notes payable                                     (45,719)         (354,218)
   Repayment of notes payable - stockholders                      (20,479)                -
   Payment on capital lease obligation                            (37,506)           (6,583)
                                                          ---------------   ----------------
Net cash provided by financing activities                         810,746           463,848
                                                          ---------------   ---------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS               32,127            54,809
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                    45,328                -
                                                          ---------------   --------------
CASH AND CASH EQUIVALENTS - END OF PERIOD                 $        77,455   $        54,809
                                                          ===============   ================
</TABLE>
      See the accompanying notes to the consolidated financial statements

                                       7
<PAGE>

                      SITESTAR CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (continued)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

During the nine months ended  September  30, 2000 and 1999,  the Company paid no
income taxes and interest of approximately $74,000 and
$11,700, respectively.


NON-CASH INVESTING AND FINANCING TRANSCATIONS:

During the nine months ended September 30, 2000, the Company converted  $471,372
of debt, which includes $224,313 of compensation and professional services, into
1,575,990 shares of the Company's common stock.






















      See the accompanying notes to the consolidated financial statements


                                       8
<PAGE>

                              SITESTAR CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

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
nine months  ended  September  30, 2000 are not  necessarily  indicative  of the
results to be expected for the full year ending December 31, 2000.


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. There are no common stock equivalents.


NOTE 3 - SALE OF ASSETS

On  September  30,  1999,  the  Company  sold all of the  assets  related to the
Company's  international  food  distribution  business,  also  known as  Holland
American  International  Specialties  ("HAIS").  The acquirer of the assets is a
partnership  with the  partners  being a group of  stockholders  of the Company.
Given that the sale was not an  arms-length  transaction,  the  Company  had the
business valued by an independent appraiser to determine the fair value purchase
price. The sales price was $900,000, which is to be paid as follows: 1) $200,000
is to be  offset  against  the  Company's  liability  to the a  stockholder,  2)
$654,000  for the buyer's  assumption  of all trade,  short-term  and  long-term
liabilities,  and 3) the remaining  $46,000 in the form of a note payable to the
Company in six annual  installments of $15,333 each plus accrued  interest at 8%
per annum.  The Company  was  required to defer the gain on this sale until such
time as the  purchasers  are able to refinance the debt of HAIS.  During the 2nd
quarter of 2000 the  purchasers  were able to refinance the debt and the Company
has recognized a $314,515 gain on the sale of HAIS.

In January 2000, the Company sold certain  assets and  liabilities of its wholly
owned subsidiary,  Sitestar,  Inc. for $34,703 in cash plus a note receivable in
the amount of $10,000.  The Company  recognized a gain on sale of these  certain
assets  of  $49,316.   The  Company   retained  the  "Sitestar"   trademark  and
"Sitestar.com" URL.

                                       9
<PAGE>
                              SITESTAR CORPORATION
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued

NOTE 4 - 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 common stock at a rate equal to the
lowest of $.70 or 60% of the average of the three  lowest  closing bid price for
the 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 will capitalize  $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)
as debt issuance costs and amortize this amount over the term of the debentures.
In addition,  the warrants  issued in connection  with these  debentures have an
exercise  price  below the market  value of the  Company's  stock on the date of
issuance,  therefore the Company will  capitalize an additional  $67,500  (which
represents  the  difference in the market value at the date of issuance less the
$.77 exercise price times the number of warrants  issued) of debt issuance costs
associated with the issuance of the 250,000 warrants that will be amortized over
the term of these debentures.

The Company and the above  debenture  holders  have also agreed  that,  upon the
declaration of effectiveness of the Registration  Statement to be filed pursuant
to the  Registration  Rights  Agreement,  provided that the trading price of the
Common  Stock  is at  least  $1.00  for the ten (10)  consecutive  trading  days
immediately  preceding  the  Effective  Date,  the  debenture  holders  will  be
obligated to purchase,  and the Company  shall be obligated to sell and issue to
the debenture holders,  additional  debentures in the aggregate principal amount
of Five  Hundred  Thousand  ($500,000)  and  additional  warrants to purchase an
aggregate of 250,000  shares of Common Stock for an aggregate  purchase price of
Five Hundred Thousand Dollars  ($500,000),  with the closing of such purchase to
occur within thirty (30) days of the Effective Date. The terms of the Additional
Debentures  and the  Additional  Warrants shall be identical to the terms of the
Debentures  and the  Warrants  as  described  above,  provided  that the Initial
Conversion  Price (as defined in the Debentures)  for the Additional  Debentures
shall be seventy-seven hundredths of one dollar ($.77).

On August 14,  2000,  the  Company  issued  another  Convertible  Debenture  for
$500,000  to the  holders of the  above-mentioned  debenture  for the same terms
described above. Thus, bringing the total to $1,000,000.

Note 5 - MARKETABLE SECURITIES

The Company currently classifies all its marketable securities as trading, which
are presented as current  assets.  Securities  accounted for as trading  include
common  stock of a publicly  traded  company  and are  reported  at fair  value,
adjusted for changes in market value.  Realized  gains and losses and unrealized
holding  gains and losses,  net of tax, on trading  securities  are  included in
earnings.  Realized  gains or losses on the sale of  securities  are  determined
using the specific-identification method.

                                       10
<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, 1999  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 changed our  corporate  focus from that of a food holding  company to an
Internet  holding company with the  acquisition of Sitestar,  Inc. in July 1999.
Soon after  concluding this  acquisition,  we started  focusing 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 which 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 its core
holdings.

     Our Internet services  subsidiary began providing  Internet services to its
customers  in 1996 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.

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

                                       11
<PAGE>

Results of Operation
--------------------
     On September  30, 1999,  the Company sold all of the assets  related to the
Company's  international  food  distribution  business,  also  known as  Holland
American  International  Specialties  ("HAIS").  The acquirer of the assets is a
partnership  with the  partners  being a group of  stockholders  of the Company.
Given that the sale was not an  arms-length  transaction,  the  Company  had the
business valued by an independent appraiser to determine the fair value purchase
price. The sales price was $900,000, which is to be paid as follows: 1) $200,000
is to be  offset  against  the  Company's  liability  to the a  stockholder,  2)
$654,000  for the buyer's  assumption  of all trade,  short-term  and  long-term
liabilities,  and 3) the remaining  $46,000 in the form of a note payable to the
Company in six annual  installments of $15,333 each plus accrued  interest at 8%
per annum.  The Company  was  required to defer the gain on this sale until such
time as the  purchasers  are able to refinance the debt of HAIS.  During the 2nd
quarter of 2000 the  purchasers  were able to refinance the debt and the Company
has recognized a $314,515 gain on the sale of HAIS.

     On December 15, 1999,  we completed  the  acquisition  of another  Internet
Company, Neocom  Microspecialists,  Inc., recently renamed,  Sitestar.net,  Inc.
("Neocom").  The intangible assets purchased as a result of recent  acquisitions
represent  approximately 76% of our total assets and  approximately  109% of our
stockholders' equity.  Further,  amortization of these intangible assets will be
the largest  single  expense  item in our  statement of  operations  and will be
approximately  $1.4 million in 2000. This material  concentration  of intangible
assets  increases  the risk of a large  charge to earnings in the event that the
recoverability  of these  intangible  assets is  impaired.  If we are  unable to
recover the costs of these intangible assets,  our financial  performance may be
negatively  impacted in the coming periods  through a write down or write off of
these intangible assets. In addition, the intangible assets could increase, thus
increasing the yearly  amortization,  if any of the 2,000,000  contingent shares
are issued in connection with the Neocom acquisition.

     In January 2000,  the Company sold certain  assets and  liabilities  of its
wholly  owned  subsidiary,  Sitestar,  Inc.  for  $34,703  in  cash  plus a note
receivable  in the amount of $10,000.  The Company  recognized a gain on sale of
these certain assets of $49,316.  The Company retained the "Sitestar"  trademark
and "Sitestar.com" URL.

     Prior to our change in corporate  focus from that of a food holding company
to that of an Internet  holding  company,  we generated all of our revenues from
sales of specialty food products. We have historically derived a majority of our
revenues from small independent specialty food retail customers.  From inception
until July 1999, we generated  revenues  exclusively  from  wholesale and retail
sales of our food  products.  We derived  income from our  wholesale  and retail
sales  from the  excess  of the  wholesale  and  retail  prices we  charged  our
customers  over the  product  costs we paid our  suppliers.  We had a  wholesale
program  in  which  we sold  bulk  quantities  of  specialty  food  products  to
registered retailers at wholesale prices. In this program, we purchased products
from suppliers at a distributor's  discounted  price and derived income from the
difference  between this  discounted  price and the wholesale  price we charged.
Additionally,  our retail customers paid for orders by cash or credit card while
we paid our suppliers on extended terms.  As a result,  we were able to increase
our working capital between the time we received payment for orders and the time
we were required to pay suppliers.

                                       12
<PAGE>

     As a result of our change in corporate focus from a food holding company to
an  Internet  holding  company,  we now have two other  sources of  income.  Our
e-commerce operating subsidiaries now derive our income from commissions. We are
agents  of our  fulfillment  centers  and  merely  generate  our  revenues  from
commissions per transaction,  which represent the gross selling price charged to
our customers less the amount we pay to the  fulfillment  center.  Our customers
pay us directly  and we remit the cost of the goods to our  fulfillment  centers
less our agreed upon commission  amount.  As a result of this  arrangement,  the
extent of our financial  agreement with our fulfillment centers are relegated to
the periodic  transfer and remittance of our product costs. We do not take title
to the goods sold on our e-commerce sites,  which eliminates any inventory risks
on our part. We forward all orders  directly to our fulfillment  centers,  which
eliminates the need to take possession of the goods and merchandise  sold on our
e-commerce  sites.  Our fulfillment  centers ship the purchased good directly to
our  customers on our behalf.  The shipping and handling  costs related to every
transaction  are added to the total cost of the goods  sold which the  customers
have to bear.

     Our Internet service provider operating  subsidiary derives its 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 are operating under an oral agreement with our  fulfillment  centers and
have no long-term obligations to continue the relationship with them if we deem,
solely  at our own  discretion,  that it is no longer  in our best  interest  to
continue the current  arrangements.  However,  we intend to  formalize  official
written fulfillment agreements with them as soon as practicable.

     Net revenues for our e-commerce  subsidiaries consist of commissions earned
per  transaction  upon  shipment of products and  acceptance  of products by our
customers net of any allowance for future returns.

     We have a limited  operating  history on which to base an evaluation of our
business and  prospects.  You must consider our prospects in light of the risks,
expenses and  difficulties  frequently  encountered  by companies in their early
stage of development, particularly companies in new and rapidly evolving markets
such as online  commerce.  To address  these  risks,  we must obtain  sufficient
operating capital,  maintain and expand our customer base,  continue to increase
our product  offerings,  successfully  implement  our  business,  marketing  and
promotional  strategies,  continue to develop our order  processing  technology,
respond to competitive  developments in the specialty food market,  and attract,
retain and motivate  qualified  personnel.  We cannot assure you that we will be
successful  in  addressing  these risks and our failure  could be harmful to our
business, prospects, financial condition and results of operations.


                                       13
<PAGE>


Internet Operations
-------------------
     Our Internet  operations are  represented by our current  Internet  service
provider and  e-commerce  operating  subsidiaries.  Due to our change in primary
corporate  focus,  these will be the industry  segments in which we are going to
focus.  Our costs would  include  expenses  associated  with running an Internet
holding  company.  These expenses are mainly  related to the  maintenance of the
corporate  office,  payroll,  legal,  accounting,  public  relations  and  other
administrative expenses.

Three Months Ended September 30, 2000
-------------------------------------
     REVENUES. Net revenues for our Internet service provider subsidiary consist
of services and sales to  customers.  Revenues are  recognized  upon delivery of
service.  Net revenues for our  e-commerce  subsidiaries  consist of commissions
earned per  transaction  upon shipment of products and acceptance of products by
our customers net of any  allowance  for future  returns.  Revenue for the three
months  ended  September  30,  2000 was  $474,387  of which all was  related  to
providing  Internet  and  development  services  to  customers.  Revenue for the
quarter  ended  September  30, 2000  increase  approximately  23% over the prior
quarter. As a result of our acquisition  strategy and our recent acquisitions of
Internet  service  providers and e-commerce  companies,  we expect to experience
strong revenue growth in the coming years.

     COST OF  REVENUES.  Cost of  revenues  consists  primarily  of the costs of
products  and  services  sold to  customers  and actual  outbound  shipping  and
handling  costs.  Cost of revenues for the three months ended September 30, 2000
was $203,082.  Our cost of revenue as a percentage of sales for the three months
ended  September  30, 2000 has  decreased to 43% from 56% for the 1st quarter of
2000 due to an approximate 20% decrease in our telecommunications  costs and the
fact that we have been able to service more customers for approximately the same
fixed cost as incurred  in the prior  quarters.  As a result of our  acquisition
strategy  and  our  recent   acquisitions  of  Internet  service  providers  and
e-commerce  companies,  we expect to have an increase in our cost of revenues as
our revenues increase.

     SELLING,  GENERAL AND ADMINISTRATIVE.  Sales and marketing expenses consist
primarily of advertising  and promotional  expenditures  and payroll and related
expenses  for  personnel  engaged in sales and  marketing  activities.  Selling,
general and  administrative  expenses  were  $743,710 for the three months ended
September 30, 2000.  This  represents a decrease of $1,350,977  from the general
and  administrative  expense  incurred for the three months ended  September 30,
1999. This decrease is primarily attributable to a $2,000,000 charge incurred in
the third  quarter of 1999  related to stock issued to an officer of the company
for  compensation.   If  this  charge  is  removed,  the  selling,  general  and
administrative  expenses increased by approximately $650,000 which is attributed
to an increase in  personnel,  an increase in corporate  expenses as a result of
our shift in corporate focus and amortization of intangible assets of $358,614.

     INTEREST EXPENSE. Interest expense for the three months ended September 30,
2000 includes amortization of $97,589 of debt issuance costs associated with the
$1,000,000 convertible debentures.


                                       14
<PAGE>

Nine Months Ended September 30, 2000
------------------------------------
     REVENUES.  Revenue  for the  nine  months  ended  September  30,  2000  was
$1,290,774  of which all was  related  to  providing  Internet  and  development
services to customers.  As a result of our  acquisition  strategy and our recent
acquisitions of Internet service providers and e-commerce  companies,  we expect
to experience strong revenue growth in the coming years.

     COST OF  REVENUES.  Cost of  revenues  consists  primarily  of the costs of
products  and  services  sold to  customers  and actual  outbound  shipping  and
handling  costs.  Cost of revenues for the nine months ended  September 30, 2000
was  $639,467.   As  a  result  of  our  acquisition  strategy  and  our  recent
acquisitions of Internet service providers and e-commerce  companies,  we expect
to have a substantial increase in our cost of revenues as our revenues increase.

     SELLING,  GENERAL AND ADMINISTRATIVE.  Sales and marketing expenses consist
primarily of advertising  and promotional  expenditures  and payroll and related
expenses  for  personnel  engaged in sales and  marketing  activities.  Selling,
general and  administrative  expenses were  $2,090,377 for the nine months ended
September 30, 2000.  This represents a decrease of $108,140 from the general and
administrative  expense  incurred for the nine months ended  September 30, 1999.
This decrease is primarily  attributable to a $2,000,000  charge incurred in the
third  quarter of 1999  related to stock issued to an officer of the company for
compensation. If this charge is removed, the selling, general and administrative
expenses  increased by  approximately  $1.9 million  which is  attributed  to an
increase in  personnel,  an increase  in  corporate  expenses as a result of our
shift in corporate focus and amortization of intangible assets of $1,075,842.

     INTEREST EXPENSE.  Interest expense for the nine months ended September 30,
2000 includes  amortization  of $148,792 of debt issuance costs  associated with
the $1,000,000 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 common stock at a rate equal to the
lowest of $.70 or 60% of the average of the three  lowest  closing bid price for
the 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 common  stock at an initial  exercise  price of $0.77 per
share.  Due to the preferential  conversion  feature of these debentures we will
capitalize  $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) as debt
issuance  costs and  amortize  this amount over the term of the  debentures.  In
addition,  the  warrants  issued in  connection  with these  debentures  have an
exercise  price below the market value of the our stock on the date of issuance,
therefore  we will  capitalize  an  additional  $67,500  (which  represents  the
difference  in the market value at the date of issuance  less the $.77  exercise
price times the number of warrants  issued) of debt  issuance  costs  associated
with the issuance of the 250,000  warrants that will be amortized  over the term
of these debentures.

                                       15
<PAGE>

         We and the above  debenture  holders  have also agreed  that,  upon the
declaration of effectiveness of the Registration  Statement to be filed pursuant
to the  Registration  Rights  Agreement,  provided that the trading price of the
Common  Stock  is at  least  $1.00  for the ten (10)  consecutive  trading  days
immediately  preceding  the  Effective  Date,  the  debenture  holders  will  be
obligated  to  purchase,  and we shall  be  obligated  to sell and  issue to the
debenture holders,  additional  debentures in the aggregate  principal amount of
Five  Hundred  Thousand  ($500,000)  and  additional  warrants  to  purchase  an
aggregate of 250,000  shares of Common Stock for an aggregate  purchase price of
Five Hundred Thousand Dollars  ($500,000),  with the closing of such purchase to
occur within thirty (30) days of the Effective Date. The terms of the Additional
Debentures  and the  Additional  Warrants shall be identical to the terms of the
Debentures  and the  Warrants  as  described  above,  provided  that the Initial
Conversion  Price (as defined in the Debentures)  for the Additional  Debentures
shall be seventy-seven hundredths of one dollar ($.77).

     On August 14, 2000, the Company issued  another  Convertible  Debenture for
$500,000  to the  holders of the  above-mentioned  debenture  for the same terms
described above.

     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,  the  ability  to  expand  our  Internet  services,  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.


                                       16
<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

Item 6.    Exhibits and Reports on Form 8-K

     (a) Exhibits

27.1 - Financial Data Schedule

     (b) Reports on Form 8-K

     None



                                       17
<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:  November 14, 2000









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