Sitestar Pays off Ex-Convertible Debenture Holders [February 28, 2005]

LYNCHBURG, Va., Feb 28, 2005 (BUSINESS WIRE) -- Sitestar Corporation (SYTE), an Internet Service Provider (ISP) and computer services company, today announced that it has fulfilled the obligations set forth in the convertible debenture settlement agreement. The remaining balance of $259,734 was paid in cash.

Frank R. Erhartic, Jr., CEO of Sitestar Corporation, commented, "We are thrilled to finally get this behind us. Since I became CEO of the company over two years ago, settling this convertible debenture issue has been one of my top goals. The convertible debentures caused our shares to become diluted and our stock price has suffered. By eliminating this type of financing, we should no longer have to sell our shares at a significant discount to pay off debt. I believe our company is much stronger now."

"It feels good to pay off the last remaining liabilities associated with the convertible debentures," says Daniel Judd, CFO for Sitestar. "Having resolved this issue, we can now give our full attention to providing our shareholders with value. This situation has been resolved without any additional adverse effects on the results of operations."

Sitestar Corporation issued one million dollars worth of convertible debentures in 2000. Since then, the stock plummeted from about $1.00 per share to a low of $0.006. Over the last year, the stock has seen an increase of well over 500 percent.

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).

For more information, visit one of the following Web sites: www.sitestar.com, www.sitestar.net, www.lynchburg.net, www.surfwithus.net, www.advi.net, www.computersbydesign.com or www.recharge.net.

SOURCE: Sitestar Corporation