There exists no such book that does what you want. There is no book that has both sightreading exercises and explanations AND "ALSO" explains theory as well. You are looking at separate books altogether. There are thousands of free sheet music scores on imslp.org and also dozens an dozens of free music theory books on imslp.org. So many that it would take you 30 years to go through them! Download the sheet music in treble clef if you want to read on guitar. You can download muic for guitar, flute, clarinet and also even violin, and keyboard. Try playing the 40 Bach chorales on guitar - both staves. For beginning reading Mel Bay 1 an Berklee Moern Method 1 are what the world uses for learning sightreading - but the reality is that Jaco Pastorius even in his own words said that "he just got a hold of every piece of music he could get his hands on and taught himself." Download Bach flute pieces and try to play those on guitar - same clef same notes.