NEVADA
(State
or other jurisdiction of
incorporation
or organization)
|
88-0397234
(I.R.S.
Employer Identification No.)
|
Page Number
|
|||
PART
I. FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
||
Condensed
Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December
31, 2007 (audited)
|
4-5
|
||
Condensed
Consolidated Statements of Income for the three months ended June 30, 2008
and 2007 (unaudited)
|
6
|
||
Condensed
Consolidated Statements of Income for the six months ended June 30, 2008
and 2007 (unaudited)
|
7
|
||
Condensed
Consolidated Statements of Cash Flows for the six months ended June 30,
2008 and 2007 (unaudited)
|
8-9
|
||
Notes
to unaudited Condensed Consolidated Financial Statements
|
10-32
|
||
Item
2.
|
Management's
Discussion and Analysis
|
33-40
|
|
Item
3.
|
Controls
and Procedures
|
40-43
|
|
Part
II.
|
OTHER
INFORMATION
|
44
|
|
Item
1.
|
Legal
Proceedings
|
44
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
44
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
44
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
44
|
|
Item
5.
|
Other
Information
|
44
|
|
Item
6.
|
Exhibits
|
44
|
|
SIGNATURES
|
45
|
2008
|
2007
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Restated
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 347,391 | $ | 232,249 | ||||
Accounts
receivable, net of allowance of $61,556 and
$22,641
|
680,346 | 299,863 | ||||||
Prepaid
expenses
|
43,905 | 16,529 | ||||||
Total
current assets
|
1,071,642 | 548,641 | ||||||
PROPERTY
AND EQUIPMENT, net
|
229,664 | 236,782 | ||||||
CUSTOMER
LIST, net of accumulated amortization of $6,603,388 and
$5,237,054
|
4,763,176 | 5,480,635 | ||||||
GOODWILL,
net of impairment
|
1,288,559 | 1,288,559 | ||||||
Deferred
tax asset
|
158,231 | - | ||||||
OTHER
ASSETS
|
645,933 | 677,267 | ||||||
TOTAL
ASSETS
|
$ | 8,157,205 | $ | 8,231,884 |
2008
|
2007
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Restated
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 35,027 | $ | 78,713 | ||||
Accrued
income taxes
|
169,508 | - | ||||||
Accrued
expenses
|
120,548 | 138,021 | ||||||
Deferred
revenue
|
1,365,811 | 1,361,606 | ||||||
Notes
payable
|
739,500 | 1,268,866 | ||||||
Total
current liabilities
|
2,430,394 | 2,847,206 | ||||||
NOTES
PAYABLE, less current portion
|
1,434,377 | 1,694,836 | ||||||
NOTES
PAYABLE - STOCKHOLDERS, less current portion
|
599,677 | 686,687 | ||||||
TOTAL
LIABILITIES
|
4,464,448 | 5,228,729 | ||||||
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,
91,326,463 and 91,326,463 shares issued and outstanding
on June 30, 2008 December 31, 2007 respectively
|
91,326 | 91,326 | ||||||
Additional
paid-in capital
|
13,880,947 | 13,880,947 | ||||||
Treasury
stock, at cost, 2,955,147 common shares on
June 30, 2008 and December 31, 2007
|
(63,030 | ) | (63,030 | ) | ||||
Accumulated
deficit
|
(10,216,486 | ) | (10,906,088 | ) | ||||
Total
stockholders’ equity
|
3,692,757 | 3,003,155 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 8,157,205 | $ | 8,231,884 |
2008
|
2007
|
|||||||
Restated
|
||||||||
REVENUE
|
$ | 2,614,699 | $ | 1,528,733 | ||||
COST
OF REVENUE
|
562,583 | 539,981 | ||||||
GROSS
PROFIT
|
2,052,116 | 988,752 | ||||||
OPERATING
EXPENSES:
|
||||||||
Selling
general and administrative expenses
|
1,618,940 | 845,150 | ||||||
INCOME
FROM OPERATIONS
|
433,176 | 143,602 | ||||||
OTHER
INCOME (EXPENSES)
|
(36,297 | ) | (54,082 | ) | ||||
INCOME
BEFORE INCOME TAXES
|
396,879 | 89,520 | ||||||
INCOME
TAXES
|
(73,477 | ) | - | |||||
NET
INCOME
|
$ | 470,356 | $ | 89,520 | ||||
BASIC
AND DILUTED EARNINGS PER SHARE
|
$ | 0.00 | $ | 0.00 | ||||
WEIGHTED
AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
|
91,326,463 | 88,063,305 |
2008
|
2007
|
|||||||
Restated
|
||||||||
REVENUE
|
$ | 5,159,244 | $ | 2,968,714 | ||||
COST
OF REVENUE
|
1,387,801 | 931,006 | ||||||
GROSS
PROFIT
|
3,771,443 | 2,037,708 | ||||||
OPERATING
EXPENSES:
|
||||||||
Selling
general and administrative expenses
|
2,984,032 | 1,553,545 | ||||||
INCOME
FROM OPERATIONS
|
787,411 | 484,163 | ||||||
OTHER
INCOME (EXPENSES)
|
(86,532 | ) | (86,075 | ) | ||||
INCOME
BEFORE INCOME TAXES
|
700,879 | 398,088 | ||||||
INCOME
TAXES
|
11,277 | - | ||||||
NET
INCOME
|
$ | 689,602 | $ | 398,088 | ||||
BASIC
AND DILUTED EARNINGS PER SHARE
|
$ | 0.01 | $ | 0.01 | ||||
WEIGHTED
AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
|
91,326,463 | 88,063,305 |
2008
|
2007
|
|||||||
Restated
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 689,602 | $ | 398,088 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization expense
|
1,486,286 | 658,676 | ||||||
Bad
debt expense
|
38,914 | 3,723 | ||||||
(Increase)
decrease in:
|
||||||||
Accounts
receivable
|
(419,398 | ) | (46,115 | ) | ||||
Prepaid
expenses
|
(27,376 | ) | 4,189 | |||||
Deferred
tax asset
|
(158,231 | ) | ||||||
Increase
(decrease) in:
|
||||||||
Accounts
payable
|
(43,686 | ) | (76,101 | ) | ||||
Accrued
expenses
|
(17,474 | ) | (205,606 | ) | ||||
Deferred
revenue
|
4,207 | 51,819 | ||||||
Accrued
income taxes
|
169,508 | - | ||||||
Net
cash provided by operating activities
|
1,722,352 | 788,673 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Other
assets held for resale
|
500 | 24,834 | ||||||
Purchase
of property and equipment
|
(12,000 | ) | (21,033 | ) | ||||
Purchase
of non-compete
|
(70,000 | ) | (40,000 | ) | ||||
Purchase
of customer list
|
(648,875 | ) | (987,585 | ) | ||||
Net
cash (used in) investing activities
|
(730,375 | ) | (1,023,784 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net
proceeds from notes payable
|
350,855 | 675,043 | ||||||
Repayment
of notes payable – stockholders
|
(87,010 | ) | (55,753 | ) | ||||
Repayment
of notes payable
|
(1,140,680 | ) | (280,644 | ) | ||||
Net
cash provided by (used in) financing activities
|
(876,835 | ) | 338,646 | |||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
115,142 | 103,535 | ||||||
CASH
AND CASH EQUIVALENTS –BEGINNING OF PERIOD
|
232,249 | 129,453 | ||||||
CASH
AND CASH EQUIVALENTS -END OF PERIOD
|
$ | 347,391 | $ | 232,988 |
CURRENT
ASSETS
|
Previously
Reported
|
Net
Change
|
Restated
|
|||||||||
Total
current assets
|
$ | 1,071,642 | $ | $ | 1,071,642 | |||||||
PROPERTY
AND EQUIPMENT, net
|
229,664 | 229,664 | ||||||||||
CUSTOMER
LIST, net of accumulated amortization of $6,603,388 and
$5,237,054
|
4,763,176 | 4,763,176 | ||||||||||
GOODWILL,
net of impairment
|
1,288,559 | 1,288,559 | ||||||||||
DEFERRED
TAX ASSET
|
- | 158,231 | 158,231 | |||||||||
OTHER
ASSETS
|
645,933 | 645,933 | ||||||||||
TOTAL
ASSETS
|
$ | 7,998,974 | $ | 158,231 | $ | 8,157,205 |
CURRENT
LIABILITIES
|
Previously
Reported
|
Net
Change
|
Restated
|
|||||||||
Accrued
income taxes
|
$ | - | $ | 169,508 | $ | 169,508 | ||||||
Total
current liabilities
|
2,260,886 | 169,508 | 2,430,394 | |||||||||
TOTAL
LIABILITIES
|
4,294,940 | 169,508 | 4,464,448 | |||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||||
Accumulated
deficit
|
(10,205,209 | ) | (11,277 | ) | (10,216,486 | ) | ||||||
Total
stockholders' equity
|
3,704,034 | (11,277 | ) | 3,692,757 | ||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 7,998,974 | $ | 158,231 | $ | 8,157,205 |
Previously
Reported
|
Net
Change
|
Restated
|
||||||||||
REVENUE
|
$ | 2,614,699 | $ | - | $ | 2,614,699 | ||||||
COST
OF REVENUE
|
562,583 | - | 562,583 | |||||||||
GROSS
PROFIT
|
2,052,116 | - | 2,052,116 | |||||||||
OPERATING
EXPENSE
|
1,618,940 | - | 1,618,940 | |||||||||
INCOME
FROM OPERATIONS
|
433,176 | - | 433,176 | |||||||||
OTHER
INCOME (EXPENSE)
|
(36,297 | ) | - | (36,297 | ) | |||||||
INCOME
BEFORE INCOME TAXES
|
396,879 | - | 396,879 | |||||||||
INCOME
TAXES
|
- | (73,477 | ) | (73,477 | ) | |||||||
NET
INCOME
|
$ | 396,879 | $ | (73,477 | ) | $ | 470,356 | |||||
BASIC
AND DILUTED INCOME PER SHARE
|
$ | 0.00 | $ | - | $ | 0.00 | ||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED
|
91,326,463 | - | 91,326,463 |
Previously
Reported
|
Net
Change
|
Restated
|
||||||||||
REVENUE
|
$ | 5,159,244 | $ | - | $ | 5,159,244 | ||||||
COST
OF REVENUE
|
1,387,801 | - | 1,387,801 | |||||||||
GROSS
PROFIT
|
3,771,443 | - | 3,771,443 | |||||||||
OPERATING
EXPENSE
|
2,984,032 | - | 2,984,032 | |||||||||
INCOME
FROM OPERATIONS
|
787,411 | - | 787,411 | |||||||||
OTHER
INCOME (EXPENSE)
|
(86,532 | ) | - | (86,532 | ) | |||||||
INCOME
BEFORE INCOME TAXES
|
700,879 | - | 700,879 | |||||||||
INCOME
TAXES
|
- | 11,277 | 11,277 | |||||||||
NET
INCOME
|
$ | 700,879 | $ | 11,277 | $ | 689,602 | ||||||
BASIC
AND DILUTED INCOME PER SHARE
|
$ | 0.01 | $ | - | $ | 0.01 | ||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED
|
91,326,463 | - | 91,326,463 |
Previously
Reported
|
Net
Change
|
Restated
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
income
|
$ | 700,879 | $ | (11,277 | ) | $ | 689,602 | |||||
(Increase)
decrease in deferred tax asset
|
- | (158,231 | ) | (158,231 | ) | |||||||
Increase
(decrease) in accrued income taxes
|
- | 169,508 | 169,508 | |||||||||
Net
cash provided by operating activities
|
1,722,352 | - | 1,722,352 | |||||||||
Net
cash used in investing activities
|
(730,375 | ) | - | (730,375 | ) | |||||||
Net
cash used in financing activities
|
(876,835 | ) | - | (876,835 | ) | |||||||
NET
INCREASE IN CAHS AND CASH EQUIVALENTS
|
115,142 | - | 115,142 | |||||||||
CASH
AND CASH EQUIVALENTS – BEGINNING OF YEAR
|
232,249 | - | 232,249 | |||||||||
CASH
AND CASH EQUIVALENTS – END OF YEAR
|
$ | 347,391 | $ | - | $ | 347,391 |
2008
|
2007
|
|||||||
Net
income available to common shareholders
|
$ | 470,356 | $ | 89,520 | ||||
Weighted
average number of common shares
|
91,326,463 | 88,063,305 | ||||||
Basic
and diluted income per share
|
$ | .00 | $ | .00 |
2008
|
2007
|
|||||||
Net
income available to common shareholders
|
$ | 689,602 | $ | 398,088 | ||||
Weighted
average number of common shares
|
91,326,463 | 88,063,305 | ||||||
Basic
and diluted income per share
|
$ | .01 | $ | .01 |
June 30, 2008
|
||||||||||||
Corporate
|
Internet
|
Consolidated
|
||||||||||
Revenue
|
$ | - | $ | 2,614,699 | $ | 2,614,699 | ||||||
Operating
Income (loss)
|
$ | (26,239 | ) | $ | 459,415 | $ | 433,176 | |||||
Depreciation
and amortization
|
$ | - | $ | 763,876 | $ | 763,876 | ||||||
Interest
expense
|
$ | - | $ | 38,832 | $ | 38,832 | ||||||
Intangible
assets
|
$ | - | $ | 6,427,429 | $ | 6,427,429 | ||||||
Total
assets
|
$ | - | $ | 8,157,205 | $ | 8,157,205 |
June 30, 2007
|
||||||||||||
Corporate
|
Internet
|
Consolidated
|
||||||||||
Revenue
|
$ | - | $ | 1,528,733 | $ | 1,528,733 | ||||||
Operating
Income (loss)
|
$ | (40,247 | ) | $ | 183,850 | $ | 143,603 | |||||
Depreciation
and amortization
|
$ | - | $ | 353,438 | $ | 353,438 | ||||||
Interest
expense
|
$ | - | $ | 49,713 | $ | 49,713 | ||||||
Intangible
assets
|
$ | - | $ | 3,526,436 | $ | 3,526,436 | ||||||
Total
assets
|
$ | - | $ | 4,551,859 | $ | 4,551,859 |
June 30, 2008
|
||||||||||||
Corporate
|
Internet
|
Consolidated
|
||||||||||
Revenue
|
$ | - | $ | 5,159,244 | $ | 5,159,244 | ||||||
Operating
Income (loss)
|
$ | (69,708 | ) | $ | 857,119 | $ | 787,411 | |||||
Depreciation
and amortization
|
$ | - | $ | 1,486,286 | $ | 1,486,286 | ||||||
Interest
expense
|
$ | - | $ | 110,518 | $ | 110,518 | ||||||
Intangible
assets
|
$ | - | $ | 6,427,429 | $ | 6,427,429 | ||||||
Total
assets
|
$ | - | $ | 8,157,205 | $ | 8,157,205 |
June 30, 2007
|
||||||||||||
Corporate
|
Internet
|
Consolidated
|
||||||||||
Revenue
|
$ | - | $ | 2,968,714 | $ | 2,968,714 | ||||||
Operating
Income (loss)
|
$ | (43,726 | ) | $ | 527,889 | $ | 484,163 | |||||
Depreciation
and amortization
|
$ | - | $ | 658,676 | $ | 658,676 | ||||||
Interest
expense
|
$ | - | $ | 85,182 | $ | 85,182 | ||||||
Intangible
assets
|
$ | - | $ | 3,526,436 | $ | 3,526,436 | ||||||
Total
assets
|
$ | - | $ | 4,551,859 | $ | 4,551,859 |
Customer
list
|
$ | 93,992 | ||
Non-compete
agreement
|
10,000 | |||
Equipment
|
10,000 | |||
Deferred
revenue
|
(5,522 | ) | ||
Purchase
price
|
$ | 108,470 |
2007
|
||||
Net
sales
|
$ | 3,023,928 | ||
Gross
profit
|
$ | 2,078,171 | ||
Selling,
general and administrative expenses
|
$ | 1,584,665 | ||
Net
income
|
$ | 407,431 | ||
Basic
income per share
|
$ | 0.00 |
Accounts
receivable
|
$ | (2,098 | ) | |
Customer
list
|
870,680 | |||
Non-compete
agreement
|
25,000 | |||
Equipment
|
10,000 | |||
Deferred
revenue
|
(101,130 | ) | ||
Purchase
price
|
$ | 802,452 |
2007
|
||||
Net
sales
|
$ | 3,489,856 | ||
Gross
profit
|
$ | 2,422,055 | ||
Selling,
general and administrative expenses
|
$ | 1,779,152 | ||
Net
income
|
$ | 556,828 | ||
Basic
income per share
|
$ | 0.01 |
Accounts
receivable
|
$ | 3,880 | ||
Customer
list
|
58,549 | |||
Non-compete
agreement
|
5,000 | |||
Deferred
revenue
|
(21,800 | ) | ||
Purchase
price
|
$ | 45,629 |
2007
|
||||
Net
sales
|
$ | 3,012,248 | ||
Gross
profit
|
$ | 2,069,364 | ||
Selling,
general and administrative expenses
|
$ | 1,574,506 | ||
Net
income
|
$ | 408,212 | ||
Basic
income per share
|
$ | 0.00 |
Customer
list
|
$ | 4,292,656 | ||
Non-compete
agreement
|
350,000 | |||
Deferred
revenue
|
(892,656 | ) | ||
Purchase
price
|
$ | 3,750,000 |
2007
|
||||
Net
sales
|
$ | 5,414,537 | ||
Gross
profit
|
$ | 3,832,067 | ||
Selling,
general and administrative expenses
|
$ | 2,837,206 | ||
Net
income
|
$ | 836,354 | ||
Basic
income per share
|
$ | 0.01 |
Customer
list
|
$ | 62,223 | ||
Non-compete
agreement
|
5,000 | |||
Accounts
receivable
|
2,343 | |||
Deferred
revenue
|
(22,858 | ) | ||
Purchase
price
|
$ | 46,708 |
2007
|
||||
Net
sales
|
$ | 3,014,532 | ||
Gross
profit
|
$ | 2,075,328 | ||
Selling,
general and administrative expenses
|
$ | 1,600,071 | ||
Net
income
|
$ | 387,043 | ||
Basic
income per share
|
$ | 0.00 |
Customer
list
|
$ | 40,512 | ||
Non-compete
agreement
|
5,000 | |||
Accounts
receivable
|
2,328 | |||
Equipment
|
10,000 | |||
Deferred
revenue
|
(12,019 | ) | ||
Purchase
price
|
$ | 45,821 |
2007
|
||||
Net
sales
|
$ | 3,017,652 | ||
Gross
profit
|
$ | 2,081,752 | ||
Selling,
general and administrative expenses
|
$ | 1,560,864 | ||
Net
income
|
$ | 434,080 | ||
Basic
income per share
|
$ | 0.00 |
Customer
list
|
$ | 250,000 | ||
Non-compete
agreement
|
5,000 | |||
Deferred
revenue
|
(25,100 | ) | ||
Purchase
price
|
$ | 229,900 |
2007
|
||||
Net
sales
|
$ | 3,063,214 | ||
Gross
profit
|
$ | 2,122,779 | ||
Selling,
general and administrative expenses
|
$ | 1,575,355 | ||
Net
income
|
$ | 459,305 | ||
Basic
income per share
|
$ | 0.01 |
Customer
list
|
$ | 277,965 | ||
Non-compete
agreement
|
50,000 | |||
Deferred
revenue
|
(64,208 | ) | ||
Purchase
price
|
$ | 263,757 |
2007
|
||||
Net
sales
|
$ | 3,102,412 | ||
Gross
profit
|
$ | 2,158,066 | ||
Selling,
general and administrative expenses
|
$ | 1,583,428 | ||
Net
income
|
$ | 488,563 | ||
Basic
income per share
|
$ | 0.01 |
Customer
list
|
$ | 15,428 | ||
Non-compete
agreement
|
5,000 | |||
Accounts
receivable
|
164 | |||
Equipment
|
2,000 | |||
Deferred
revenue
|
(4,050 | ) | ||
Purchase
price
|
$ | 18,542 |
2007
|
||||
Net
sales
|
$ | 2,975,291 | ||
Gross
profit
|
$ | 2,043,813 | ||
Selling,
general and administrative expenses
|
$ | 1,554,602 | ||
Net
income
|
$ | 403,136 | ||
Basic
income per share
|
$ | 0.00 |
Customer
list
|
$ | 400,000 | ||
Non-compete
agreement
|
10,000 | |||
Deferred
revenue
|
(50,000 | ) | ||
Purchase
price
|
$ | 360,000 |
2008
|
2007
|
|||||||
Current
provision:
|
||||||||
Federal
|
$ | 144,082 | $ | - | ||||
State
|
25,426 | - | ||||||
Deferred
provision:
|
||||||||
Federal
|
(134,496 | ) | 211,047 | |||||
State
|
(23,735 | ) | 37,244 | |||||
Valuation allowance | - | (248,291 | ) | |||||
Total
income tax provision
|
$ | 11,277 | $ | - |
2008
|
2007
|
|||||||
Accounts
receivable
|
$ | 24,622 | 9,056 | |||||
Amortization
of Intangible assets
|
2,686,028 | $ | 2,177,997 | |||||
Loss
carry-forward
|
- | 365,367 | ||||||
Less
valuation allowance
|
2,552,420 | 2,552,420 | ||||||
Deferred
tax asset
|
$ | 158,231 | $ | - |
2008
|
2007
|
|||||||
Bank
note payable in monthly interest and principal payments of $1,784.
Interest is payable prime plus 4.5%, (9.75% and 9.75% as of June 30, 2008
and December 31, 2007 respectively). The note is guaranteed by a
stockholder of the Company and secured by a deed of trust against personal
residences of three stockholders. Also, the bank has a blanket lien
against all other current and future assets of
Sitestar.net.
|
46,702 | 58,242 | ||||||
Bank
line of credit reissued on April 12, 2008 with a principal limit of
$300,000. Interest is payable at an annual rate of prime plus
.25% (7.50% as of December 31, 2007). The note is secured by a
deed of trust on the Company’s building and is personally guaranteed by
officers and directors of the Company.
|
- | 300,000 |
Non-interest
bearing amount due on acquisition of AlaNet Internet Services payable in
eleven monthly installments of $4,276 through April 2008.
|
- | 20,807 | ||||||
Bank
note payable in twelve monthly interest and principal payments of $30,650.
Interest is payable at an annual rate of 9.25%. The note
is guaranteed by officers and directors of the Company and secured by
shares of Company stock owned by the officers and directors of the
Company.
|
149,756 | 322,048 | ||||||
Bank
note payable in twenty four monthly interest and principal payments of
$21,167. Interest is payable at an annual rate of
8.5%. The note is guaranteed by officers and directors of
the Company and secured by shares of Company stock owned by officers and
directors of the Company.
|
327,951 | 438,264 | ||||||
Bank
bridge note originally payable on February 1, 2008. Interest is payable at
an annual rate of 8.5%. The note was refinanced on February 21,
2008 at an annual interest rate of 8.5% and is payable in twelve payments
of $21,760 and is personally guaranteed by officers and directors of the
Company and secured by real estate owned by officers and directors of the
Company.
|
168,777 | 250,000 | ||||||
Non-interest
bearing amount due on acquisition of USA Telephone payable in thirty six
monthly installments starting January 2008.
|
1,315,615 | 1,574.341 | ||||||
Non-interest
bearing amount due on acquisition of Comcation payable in five monthly
installments starting April 2008.
|
7,827 | - | ||||||
Non-interest
bearing amount due on acquisition of N2theNet payable in eleven monthly
installments starting May 2008.
|
34,813 | - | ||||||
Non-interest
bearing amount due on acquisition of Dial Assurance payable in six monthly
installments starting June 2008
|
57,441 | - | ||||||
Non-interest
bearing amount due on acquisition of AdaNet payable in five monthly
installments starting July 2008
|
14,705 | - |
Non-interest
bearing amount due on acquisition of USA Telephone payable in 60 days from
closing.
|
50,290 | - | ||||||
Less
current portion
|
(739,500 | ) | (1,268,866 | ) | ||||
Long-term
portion
|
$ | 1,434,377 | $ | 1,694,836 |
Twelve
months ending June 30, 2009
|
$ | 739,500 | ||
Twelve
months ending June 30, 2010
|
1,429,774 | |||
Twelve
months ending June 30, 2011
|
4,603 | |||
Twelve
months ending June 30, 2012
|
- | |||
Twelve
months ending June 30, 2013
|
- | |||
Thereafter
|
- | |||
Total
|
$ | 2,173,877 |
For the six months ended June 30, 2008 (unaudited)
|
||||||||||||
Corporate
|
Internet
|
Total
|
||||||||||
Revenue
|
$ | - | $ | 5,159,244 | $ | 5,159,244 | ||||||
Cost
of revenue
|
- | 1,387,801 | 1,387,801 | |||||||||
Gross
profit
|
- | 3,771,443 | 3,771,443 | |||||||||
Operating
expenses
|
69,708 | 2,914,324 | 2,984,032 | |||||||||
Income
(loss) from operations
|
(69,708 | ) | 857,119 | 787,411 | ||||||||
Other
income (expense)
|
- | (86,532 | ) | (86,532 | ) | |||||||
Income
before income taxes
|
(69,708 | ) | 770,587 | 700,879 | ||||||||
Income
taxes
|
(11,277 | ) | - | (11,277 | ) | |||||||
Net
income (loss)
|
$ | (80,985 | ) | $ | 770,587 | $ | 689,602 |
For the six months ended June 30, 2007 (unaudited)
|
||||||||||||
Corporate
|
Internet
|
Total
|
||||||||||
Revenue
|
$ | - | $ | 2,968,714 | $ | 2,968,714 | ||||||
Cost
of revenue
|
- | 931,006 | 931,006 | |||||||||
Gross
profit
|
- | 2,037,708 | 2,037,708 | |||||||||
Operating
expenses
|
43,726 | 1,509,819 | 1,553,545 | |||||||||
Income
(loss) from operations
|
(43,726 | ) | 527,889 | 484,163 | ||||||||
Other
income (expense)
|
- | (86,075 | ) | (86,075 | ) | |||||||
Income
before income taxes
|
(43,726 | ) | 441,814 | 398,088 | ||||||||
Income
taxes
|
- | - | - | |||||||||
Net
income (loss)
|
$ | (43,726 | ) | $ | 441,814 | $ | 398,088 |
For the six months ended June 30, 2008
|
||||||||||||
|
Corporate
|
Internet
|
Total
|
|||||||||
EBITDA
|
$ | (69,708 | ) | $ | 2,367,391 | $ | 2,297,683 | |||||
Interest
expense
|
- | (110,518 | ) | (110,518 | ) | |||||||
Taxes
|
(11,277 | ) | - | (11,277 | ) | |||||||
Depreciation
|
- | (19,118 | ) | (19,118 | ) | |||||||
Amortization
|
- | (1,467,168 | ) | (1,467,168 | ) | |||||||
Net
income (loss)
|
$ | (80,985 | ) | $ | 770,587 | $ | 689,602 |
For the six months ended June 30, 2007
|
||||||||||||
Corporate
|
Internet
|
Total
|
||||||||||
EBITDA
|
$ | (43,726 | ) | $ | 1,186,279 | $ | 1,142,553 | |||||
Interest
expense
|
- | (85,182 | ) | (85,182 | ) | |||||||
Taxes
|
- | - | - | |||||||||
Depreciation
|
- | (30,731 | ) | (30,731 | ) | |||||||
Amortization
|
- | (628,552 | ) | (628,552 | ) | |||||||
Net
income (loss)
|
$ | (43,726 | ) | $ | 441,814 | $ | 398,088 |
2008
|
2007
|
|||||||
EBITDA
for the six months ended June 30,
|
$ | 2,297,683 | $ | 1,142,553 | ||||
Interest
expense
|
(110,518 | ) | (85,182 | ) | ||||
Taxes
|
(11,277 | ) | - | |||||
Depreciation
|
(19,118 | ) | (30,731 | ) | ||||
Amortization
|
1,467,168 | ) | (628,552 | ) | ||||
Net
income for the six months ended June 30,
|
$ | 689,602 | $ | 398,088 |
2008
|
2007
|
|||||||||||||||
Current
|
$ | 307,983 | 45 | % | $ | 171,446 | 57 | % | ||||||||
30
< 60
|
191,975 | 28 | % | 72,337 | 24 | % | ||||||||||
60
+
|
180,388 | 27 | % | 56,080 | 19 | % | ||||||||||
Total
|
$ | 680,346 | 100 | % | $ | 299,863 | 100 | % |
SITESTAR
CORPORATION
|
||
Date:
October 8, 2009
|
||
By:
|
/s/ Frank Erhartic,
Jr.
|
|
Frank
Erhartic, Jr.
|
||
President,
Chief Executive Officer
|
||
(Principal
Executive Officer and
|
||
Principal
Accounting Officer)
|
||
Date:
October 8, 2009
|
||
By:
|
/s/ Daniel A.
Judd.
|
|
Daniel
A. Judd
|
||
Chief
Financial Officer
|
||
(Principal
Financial Officer)
|