SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 22, 2000
SITESTAR CORPORATION
(Exact name of registrant as specified in its charter)
000-27763
(Commission File Number)
NEVADA 88-0397234
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
16133 VENTURA BOULEVARD, SUITE 635, ENCINO, CALIFORNIA 91436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 981-4519
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective November 22, 2000, we have consummated the acquisition of FRE
Enterprises, Inc. and FRE Communications, Inc., both Virginia corporations
(collectively doing business as "Lynchburg.net")in exchange for 16,583,980
shares of Sitestar Common Stock for 100% of the outstanding shares of
Lynchburg.net. Effective upon the closing of the acquisition, we issued
12,437,985 shares of our Common Stock and have reserved 4,145,995 shares of
Common Stock that we have agreed to issue on the third anniversary of the
acquisition based on certain contingencies. The certain contingencies are
related to potential unrecorded and unknown liabilities. Sitestar used a market
price of $0.20 per share to determine the amount of shares issued and reserved
to Lynchburg.net. The market price was determined by taking the average closing
price of Sitestar's common stock for an eight day trading period starting
November 6, 2000 and ending November 15, 2000. The aggregate purchase
consideration for Lynchburg.net based on the number of shares issued and
reserved multiplied by the average market price of $0.20 per share is
$3,316,796.
Lynchburg.net is an Internet service provider, web development and computer
sales and service company based in Lynchburg, Virginia. As of October 31, 2000,
(i) Lynchburg.net provided Internet access, computer sales and service and other
Internet services to approximately 3,400 customers in the Southern Virginia area
and (ii) its estimated revenues for the ten months ended October 31, 2000 were
$1.45 million. Based on our current estimates we believe that Lynchburg.net's
annualized revenues would be approximately $1.75 million for the fiscal year
ending December 31, 2000.
We believe the acquisition of Lynchburg.net would enhance our primary
strategy of consolidating small Internet service providers in the rural markets
of the mid-Atlantic region by enlarging our service footprint. This recent
acquisition increases our Internet access customer base to over 10,000
subscribers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
It is impracticable to provide the required financial statements for the
acquired business referred to in Item 2 above. The registrant intends to file
such financial statements as soon as practicable but not later than 60 days
after the report on Form 8-K must be filed with respect to such acquisition.
(b) Pro forma Financial Information.
It is impracticable to provide the required pro forma fiancial information
for the acquired business referred to in Item 2 above. The registrant intends to
file such financial statements as soon as practicable but not later than 60 days
after the report on Form 8-K must be filed with respect to such acquisition.
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(c) Exhibits.
There is attached hereto the following exhibit:
Exhibit
Number Exhibit Title/Description
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99.1 Purchase Agreement by and between Sitestar Corporation and FRE
Enterprises, Inc., dated as of November 2, 2000.
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.
Date: December 7, 2000 Sitestar Corporation
(Registrant)
By: /s/ Frederick Manlunas
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Frederick Manlunas
Chairman
