Enterprise Diversified 10-Q 16 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 13, 2015
Document And Entity Information
Entity Registrant Name	SITESTAR CORP
Entity Central Index Key	1,096,934
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		74,085,705
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Real estate - held-for-resale	$ 2,467,223	$ 2,293,061
Real estate - held for investment, net	1,281,814	1,107,402
Cash and cash equivalents	142,277	369,694
Accounts receivable, net	16,289	21,811
Prepaid expenses	1,316	1,340
Property, plant and equipment, net	146,314	146,314
Goodwill, net	1,166,494	1,166,494
Other assets	200,010	200,056
Total assets	5,421,737	5,306,172
LIABILITIES
Accounts payable	46,014	14,963
Accrued expenses	34,225	34,315
Deferred revenue	260,393	273,440
Notes payable	900,615	900,615
Total liabilities	$ 1,241,247	$ 1,223,333
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 shares issued in 2015 and 2014 and 74,085,705 shares outstanding in 2015 and 2014	$ 91,326	$ 91,326
Additional paid-in capital	13,880,947	13,880,947
Treasury stock, at cost, 17,240,758 common shares	(789,518)	(789,518)
Accumulated deficit	(9,002,265)	(9,099,916)
Total stockholders' equity	4,180,490	4,082,839
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 5,421,737	$ 5,306,172

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred Stock Par Value	$ 0.001	$ 0.001
Preferred Stock Shares Authorized	10,000,000	10,000,000
Preferred Stock Shares Issued	0	0
Preferred Stock Shares Outstanding	0	0
Common Stock Par Value	$ 0.001	$ 0.001
Common Stock Shares Authorized	300,000,000	300,000,000
Common Stock Shares Issued	91,326,463	91,326,463
Common Stock Shares Outstanding	74,085,705	74,085,705
Common Shares Treasury Stock	17,240,758	17,240,758

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
REVENUE
Internet	$ 393,407	$ 463,711	$ 1,219,459	$ 1,482,563
Real estate	31,550	33,955	93,348	225,663
Revenue	424,957	497,666	1,312,807	1,708,226
COST OF REVENUE
Internet	146,785	140,073	417,427	493,424
Real estate	24,222	18,114	69,151	178,053
Cost of Revenue	171,007	158,187	486,578	671,477
GROSS PROFIT	253,950	339,479	826,229	1,036,749
OPERATING EXPENSES:
Selling general and administrative expenses	196,851	245,151	727,507	735,840
INCOME FROM OPERATIONS	57,099	94,328	98,722	300,909
OTHER INCOME (EXPENSES):
Other income	$ 1,302	2,386	$ 1,072	2,919
Interest expense		(320)		(2,684)
TOTAL OTHER INCOME	$ 1,302	2,066	$ (1,072)	235
INCOME BEFORE INCOME TAXES	$ 58,401	$ 96,394	$ 97,650	301,144
INCOME TAXES (EXPENSE) BENEFIT				(74,275)
NET INCOME	$ 58,401	$ 96,394	$ 97,650	$ 226,869
BASIC AND DILUTED EARNINGS PER SHARE	$ 0	$ 0	$ 0	$ 0
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED	74,085,705	74,085,705	74,085,705	74,085,705

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 97,650	$ 226,869
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and impairment	25,625	19,140
Allowance for doubtful accounts	$ (292)	(2,658)
Deferred income taxes		74,275
(Increase) decrease in accounts receivable	$ 5,814	9,962
(Increase) decrease in prepaid expenses	$ 23	211
(Increase) decrease in real estate held for investment		(293,255)
(Increase) decrease in real estate held for resale	$ (374,199)
Increase (decrease) in accounts payable	31,051	21,508
Increase (decrease) in accrued expenses	(90)	6,603
Decrease in deferred revenue	(13,047)	(27,896)
Net cash provided by (used in) operating activities	(227,465)	34,759
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in other assets held for resale	48	8
Net cash provided by (used in) investing activities	$ 48	8
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest accrued on notes payable - stockholders		4,041
Net cash provided by (used in) financing activities		4,041
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	$ (227,417)	38,808
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	369,694	118,469
CASH AND CASH EQUIVALENTS - END OF PERIOD	142,277	157,277
Supplemental Disclosures of Cash Flow Information
Income Taxes Paid	0	0
Interest Expense Paid	0	$ 0
Real Estate Reclassification	$ 200,037

1. BASIS OF PRESENTATION AND SI

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 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 (SEC). 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 U.S. Generally Accepted Accounting Principles (GAAP) have been omitted pursuant to such 1regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K. The results for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015. Significant Accounting Policies See the Notes to Consolidated Financial Statements in the Company’s 2014 Annual Report on Form 10-K. Recently Issued Accounting Pronouncements No new accounting pronouncement issued or effective during this fiscal quarter has had or is expected to have a material impact on the consolidated financial statements. Income Per Share The basic income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has no potentially dilutive securities. The following table represents the calculations of basic and diluted income per share: For the three months ended September 30, 2015 and 2014: 2015 2014 Net income (loss) available to common shareholders $ 58,401 $ 96,394 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00 For the nine months ended September 30, 2015 and 2014: 2015 2014 Net income (loss) available to common shareholders $ 97,650 $ 226,869 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00

2. COMMON STOCK

2. COMMON STOCK	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
2. COMMON STOCK	NOTE 2 – COMMON STOCK During the nine months ended September 30, 2015 and 2014, the Company issued no shares of common stock and repurchased no treasury shares.

3. SEGMENT INFORMATION

3. SEGMENT INFORMATION	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
3. SEGMENT INFORMATION	NOTE 3 – SEGMENT INFORMATION The Company has three business units with separate management and reporting infrastructures that offer different products and services. The business units have been aggregated into three reportable segments: Corporate, Real estate and Internet. The Corporate group is the holding company which oversees the operations of the Internet group and arranges financing. The real estate group invests in, refurbishes and markets real estate for resale. The Internet group provides Internet access to customers throughout the U.S. and Canada. The Company evaluates the performance of its operating segments based on income from operations, before income taxes, accounting changes, non-recurring items, and interest income and expense. Summarized financial information concerning the Company's reportable segments is shown in the following tables for the three months ended September 30, 2015 and 2014: September 30, 2015 Corporate Real estate Internet Consolidated Revenue $ — $ 31,550 $ 393,407 $ 424,957 Operating income (loss) $ (21,306 ) $ (244 ) $ 78,649 $ 57,099 Depreciation and amortization $ — $ 8,517 $ — $ 8,517 Interest expense $ — $ — $ — $ — Real estate $ — $ 3,749,037 $ — $ 3,749,037 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,749,037 $ 1,672,700 $ 5,421,737 September 30, 2014 Corporate Real estate Internet Consolidated Revenue $ — $ 33,955 $ 463,711 $ 497,666 Operating income (loss) $ (40,923 ) $ 15,841 $ 119,410 $ 94,328 Depreciation and amortization $ — $ 8,309 $ — $ 8,309 Interest expense $ — $ — $ 320 $ 320 Real estate $ — $ 3,517,721 $ — $ 3,517,721 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,517,721 $ 1,716,649 $ 5,234,370 Summarized financial information concerning the Company's reportable segments is shown in the following tables for the nine months ended September 30, 2015 and 2014: September 30, 2015 Corporate Real estate Internet Consolidated Revenue $ — $ 93,348 $ 1,219,459 $ 1,312,807 Operating income (loss) $ (301,337 ) $ 1,481 $ 398,578 $ 98,722 Depreciation and amortization $ — $ 25,625 $ — $ 25,625 Interest expense $ — $ — $ — $ — Real estate $ — $ 3,749,037 $ — $ 3,749,037 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,749,037 $ 1,672,700 $ 5,421,737 September 30, 2014 Corporate Real estate Internet Consolidated Revenue $ — $ 225,663 $ 1,482,563 $ 1,708,226 Operating income (loss) $ (128,284 ) $ 47,610 $ 381,583 $ 300,909 Depreciation and amortization $ — $ 19,140 $ — $ 19,140 Interest expense $ — $ — $ 2,684 $ 2,684 Real estate $ — $ 3,517,721 $ — $ 3,517,721 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,517,321 $ 1,716,649 $ 5,234,370

4. NOTES PAYABLE

4. NOTES PAYABLE	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
4. NOTES PAYABLE	NOTE 4 - NOTES PAYABLE This USA Telephone note payable is due and is currently in litigation. At September 30, 2015, and December 31, 2014, the balance consist of the following: 2015 2014 Non-interest bearing amount due on acquisition of USA Telephone customers per contract payable in thirty six monthly installments starting January 2008. $ 900,615 $ 900,615 Litigation United Systems Access, Inc., et al. v. SiteStar Corporation, Civil Action, Docket No. CV-13-161, (York County Superior Court). This is a breach of contract claim, whereby Plaintiff has alleged that SiteStar has failed to pay the amounts owed on a Promissory Note. SiteStar has filed a counterclaim for damages for overpayments and breach of contract associated with Plaintiff’s misrepresentation of the customer lists and was shorted revenues associated the number of customers contracted for. Plaintiff seeks monetary damages in the amount of $900,615. SiteStar is currently contesting the Litigation. The estimate of the upper limit of a potential loss is $900,615 which has been accrued. A judicial settlement conference was held in June with no agreement reached. Management is vigorously defending this claim.

5. RELATED PARTY

5. RELATED PARTY	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
5. RELATED PARTY	NOTE 5 – RELATED PARTY The Company leases its office building in Lynchburg, Virginia, from its Director and CEO on a five-year lease expiring April 30, 2017. For the nine months ended September 30, 2015 and 2014, the Company paid $66,000 and $95,353 for rent on this office building. In addition, the Company rents a building used for storage of appliances and supplies which is located in Salem, VA, from this same individual. For the nine months ended September 30, 2015 and 2014, the Company paid $4,500 and $4,500 for rent on this building.

6. SUBSEQUENT EVENTS

6. SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
6. SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS In October 2015, the Company paid its corporate attorney the remaining $30,000 balance in legal fees related to the Moore Shareholder Group Settlement Agreement. (A total of $132,000 in legal fees were incurred by the Company related to this settlement.)

1. BASIS OF PRESENTATION AND 12

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	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 (SEC). 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 U.S. Generally Accepted Accounting Principles (GAAP) have been omitted pursuant to such 1regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K. The results for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.
Significant Accounting Policies	Significant Accounting Policies See the Notes to Consolidated Financial Statements in the Company’s 2014 Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements No new accounting pronouncement issued or effective during this fiscal quarter has had or is expected to have a material impact on the consolidated financial statements.
Income Per Share	Income Per Share The basic income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has no potentially dilutive securities. The following table represents the calculations of basic and diluted income per share: For the three months ended September 30, 2015 and 2014: 2015 2014 Net income (loss) available to common shareholders $ 58,401 $ 96,394 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00 For the nine months ended September 30, 2015 and 2014: 2015 2014 Net income (loss) available to common shareholders $ 97,650 $ 226,869 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00

1. BASIS OF PRESENTATION AND 13

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Income Per Share	2015 2014 Net income (loss) available to common shareholders $ 58,401 $ 96,394 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00 For the nine months ended September 30, 2015 and 2014: 2015 2014 Net income (loss) available to common shareholders $ 97,650 $ 226,869 Weighted average number of common shares 74,085,705 74,085,705 Basic and diluted income per share $ 0.00 $ 0.00

3. SEGMENT INFORMATION (Tables)

3. SEGMENT INFORMATION (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Segment Information	Corporate Real estate Internet Consolidated Revenue $ — $ 31,550 $ 393,407 $ 424,957 Operating income (loss) $ (21,306 ) $ (244 ) $ 78,649 $ 57,099 Depreciation and amortization $ — $ 8,517 $ — $ 8,517 Interest expense $ — $ — $ — $ — Real estate $ — $ 3,749,037 $ — $ 3,749,037 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,749,037 $ 1,672,700 $ 5,421,737 September 30, 2014 Corporate Real estate Internet Consolidated Revenue $ — $ 33,955 $ 463,711 $ 497,666 Operating income (loss) $ (40,923 ) $ 15,841 $ 119,410 $ 94,328 Depreciation and amortization $ — $ 8,309 $ — $ 8,309 Interest expense $ — $ — $ 320 $ 320 Real estate $ — $ 3,517,721 $ — $ 3,517,721 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,517,721 $ 1,716,649 $ 5,234,370 Summarized financial information concerning the Company's reportable segments is shown in the following tables for the nine months ended September 30, 2015 and 2014: September 30, 2015 Corporate Real estate Internet Consolidated Revenue $ — $ 93,348 $ 1,219,459 $ 1,312,807 Operating income (loss) $ (301,337 ) $ 1,481 $ 398,578 $ 98,722 Depreciation and amortization $ — $ 25,625 $ — $ 25,625 Interest expense $ — $ — $ — $ — Real estate $ — $ 3,749,037 $ — $ 3,749,037 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,749,037 $ 1,672,700 $ 5,421,737 September 30, 2014 Corporate Real estate Internet Consolidated Revenue $ — $ 225,663 $ 1,482,563 $ 1,708,226 Operating income (loss) $ (128,284 ) $ 47,610 $ 381,583 $ 300,909 Depreciation and amortization $ — $ 19,140 $ — $ 19,140 Interest expense $ — $ — $ 2,684 $ 2,684 Real estate $ — $ 3,517,721 $ — $ 3,517,721 Intangible assets $ — $ — $ 1,166,494 $ 1,166,494 Total assets $ — $ 3,517,321 $ 1,716,649 $ 5,234,370

4. NOTES PAYABLE (Tables)

4. NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Notes Payable	2015 2014 Non-interest bearing amount due on acquisition of USA Telephone customers per contract payable in thirty six monthly installments starting January 2008. $ 900,615 $ 900,615

1. BASIS OF PRESENTATION AND 16

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Income Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounting Policies [Abstract]
Net income (loss) available to common shareholders	$ 58,401	$ 96,394	$ 97,650	$ 226,869
Weighted average number of common shares	74,085,705	74,085,705	74,085,705	74,085,705
Basic and diluted income per share	$ 0	$ 0	$ 0	$ 0

3. SEGMENT INFORMATION - Segmen

3. SEGMENT INFORMATION - Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest expense		$ 320		$ 2,684
Corporate
Revenue
Operating income (loss)	$ (21,306)	$ (40,923)	$ (301,337)	$ (128,284)
Depreciation and amortization
Interest expense
Real estate
Intangible assets
Total assets
Real Estate
Revenue	$ 31,550	$ 33,955	$ 93,348	$ 225,663
Operating income (loss)	(244)	15,841	1,481	47,610
Depreciation and amortization	$ 8,517	$ 8,309	$ 25,625	$ 19,140
Interest expense
Real estate	$ 3,749,037	$ 3,517,721	$ 3,749,037	$ 3,517,721
Intangible assets
Total assets	$ 3,749,037	$ 3,517,721	$ 3,749,037	$ 3,517,321
Internet
Revenue	393,407	463,711	1,219,459	1,482,563
Operating income (loss)	$ 78,649	$ 119,410	$ 398,578	$ 381,583
Depreciation and amortization
Interest expense		$ 320		$ 2,684
Real estate
Intangible assets	$ 1,166,494	$ 1,166,494	$ 1,166,494	$ 1,166,494
Total assets	1,672,700	1,716,649	1,672,700	1,716,649
Consolidated
Revenue	424,957	497,666	1,312,807	1,708,226
Operating income (loss)	57,099	94,328	98,722	300,909
Depreciation and amortization	$ 8,517	8,309	$ 25,625	19,140
Interest expense		320		2,684
Real estate	$ 3,749,037	3,517,721	$ 3,749,037	3,517,721
Intangible assets	1,166,494	1,166,494	1,166,494	1,166,494
Total assets	$ 5,421,737	$ 5,234,370	$ 5,421,737	$ 5,234,370

4. NOTES PAYABLE - Notes Payabl

4. NOTES PAYABLE - Notes Payable (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Non-interest bearing amount due on acquisition of USA Telephone customers per contract payable in thirty six monthly installments starting January 2008.	$ 900,615	$ 900,615

4. NOTES PAYABLE (Details Narra

4. NOTES PAYABLE (Details Narrative)	Sep. 30, 2015USD ($)
Payables and Accruals [Abstract]
Potential Litigation Loss	$ 900,615

5. RELATED PARTY (Details Narra

5. RELATED PARTY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Office Building
Rent Expense	$ 66,000	$ 95,353
Storage Space
Rent Expense	$ 4,500	$ 4,500

6. SUBSEQUENT EVENTS (Details N

6. SUBSEQUENT EVENTS (Details Narrative)	1 Months Ended
	Nov. 13, 2015USD ($)
Subsequent Events [Abstract]
Legal Fees	$ 30,000