Sitestar Corporation Cancels 20% of Its Issued Shares [December 1, 2004]

LYNCHBURG, Va., Dec 1, 2004 (BUSINESS WIRE) -- Sitestar Corporation (SYTE), a publicly traded Internet Service Provider (ISP) and computer services company, announced today that it has recently reduced its outstanding shares by 21,783,901 or approximately 20% of the shares of the Company's common stock. The cancellations are related to the Stock Redemption Agreement of December 4, 2002 with former officers and a recent surrender of stock relating to the sale of Sitestar's software development division. Current outstanding shares are now 87,955,241.

"The stock cancellation was done to further strengthen our stock price and increase shareholder value," says Frank R. Erhartic, Jr., CEO of Sitestar. "This is not the first time we have cancelled outstanding shares and it won't be the last. Earlier this year we canceled $8,859,786 shares and we are currently in the process of canceling over ten million more. Increasing shareholder value is one of my top priorities. We feel that reducing our outstanding shares, strengthening our balance sheet and increasing revenues and net profits, is a great way to do this."

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.

About Sitestar Corporation

Sitestar Corporation is a mid-Atlantic Internet Service Provider (ISP) and computer services company offering a broad range of services to business and residential customers. Sitestar's main customer base is primarily in the Virginia and North Carolina markets but also sells most of its services nationwide. Sitestar's wholly owned subsidiaries provide narrow and broadband Internet access, Web-hosting and design services, computer sales and repair and other technology-related solutions to its residential and business customers.

Sitestar's wholly owned subsidiaries include Sitestar.net (http://www.sitestar.net), Sitestar Applied Technologies (http://www.sitestarapplied.net), SurfWithUs.Net (http://www.surfwithus.net), Lynchburg.net (http://www.lynchburg.net), Advanced Internet Services (http://www.advi.net), Computers by Design (http://www.computersbydesign.com) and CBD Toner Recharge (http://www.recharge.net).

SOURCE: Sitestar Corporation