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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the transition period ________ to _________

                           COMMISSION FILE NO. 0-25677

                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                   DELAWARE                             51-0384117
        (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)              IDENTIFICATION NO.)

                          STEFAN - GEORGE - RING 19-23
                              81929 MUNICH, GERMANY
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                  49-89-993-150
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                 (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL
                       YEAR IF CHANGED SINCE LAST REPORT)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Number  of  shares  outstanding  of the  issuer's  class of  Common  Stock as of
September 30, 2000: 23,355,663

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<PAGE>







                                TABLE OF CONTENTS

                                                                       PAGE
                                                                       ----
PART I  FINANCIAL INFORMATION ......................................     3
   ITEM 1.  FINANCIAL STATEMENTS ...................................     3
   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             AND RESULTS OF OPERATIONS .............................    10
   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
             MARKET RISK ...........................................    16

PART II  OTHER INFORMATION .........................................    17
   ITEM 1.  LEGAL PROCEEDINGS ......................................    17
   ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS ..............    17
   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ........................    17
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ....    17
   ITEM 5.  OTHER INFORMATION ......................................    17
   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K .......................    17

SIGNATURES .........................................................    17


                                       2


<PAGE>


                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.

                           CONSOLIDATED BALANCE SHEETS

                                                     December 31,  September 30,
                                                         1999         2000
                                                         ----         ----
                                                     (in thousands, except share
                                                        data) - (Unaudited)
 ASSETS
   Cash and cash equivalents .......................     e72,879      e18,123
   Short-term investments ..........................      41,048       32,683
   Accounts receivable--trade, net of allowance
    for doubtful accounts of Euro 1,187,000 and
    Euro 1,422,000 at December 31, 1999 and
    September 30, 2000 respectively ................       9,120       11,041
   Other receivables ...............................       5,029        6,288
   Restricted investments ..........................      10,045       15,512
   Prepaid expenses and other assets ...............       2,191        1,095
                                                        --------     --------
   Total current assets ............................     140,312       84,742

   Property and equipment, net .....................      28,349       46,183
   Product development costs, net ..................       3,082        2,314
   Goodwill, net ...................................      26,120       27,411
   Deferred income taxes ...........................      20,676       30,888
   Restricted investments ..........................      47,938       13,295
   Other assets ....................................      20,009       19,392
                                                        --------     --------

TOTAL ASSETS .......................................    e286,486     e224,225
                                                        ========     ========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
     Overdrafts and short-term borrowings ..........        e435         e424
     Trade accounts payable ........................      18,146       10,765
     Other accrued liabilities .....................      15,076        8,439
     Current portion long term debt and
      capital lease obligations ....................       1,720        1,057
     Accrued personnel costs .......................       2,681        1,839
                                                        --------     --------
          Total current liabilities ................      38,058       22,524

     Long-term debt ................................     177,557      170,739
     Capital lease obligations .....................       2,426        2,652
SHAREHOLDERS' EQUITY
   Common stock $.001 par value, 50,000,000
    shares authorized, 20,970,000 and
    23,355,663 shares issued and outstanding
    at December 31, 1999 and September 30, 2000
    respectively ...................................          19           20
   Preferred stock $.001 par value,
    50,000,000 shares authorized, 4,793,000 and
    3,180,000 issued and outstanding December 31,
    1999 and September 30, 2000 respectively .......           3            2
     Additional paid in capital ....................     123,818      129,466
     Accumulated deficit ...........................     (53,885)     (99,808)
     Other comprehensive income (loss) .............      (1,510)      (1,370)
                                                        --------     --------
     Total shareholders' equity ....................      68,445       28,310
                                                        --------     --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .........    e286,486     e224,225
                                                        ========     ========



           See accompanying notes to consolidated financial statements

                                       3


<PAGE>


                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.

                         CONSOLIDATED STATEMENTS OF LOSS
                                   (Unaudited)


                                       Three months ended    Nine months ended
                                           September 30         September 30
                                        -----------------     -----------------
                                         1999       2000       1999       2000
                                         ----       ----       ----       ----
                                         (in thousands, except per share data)
Revenue
     Internet Projects .............      e953     e1,143     e3,211     e3,151
     Network Services ..............     4,999      8,403     10,505     22,861
                                       -------    -------    -------    -------
Total revenues .....................     5,952      9,546     13,716     26,012
Direct cost of services ............     3,492      6,528      7,874     17,074
                                       -------    -------    -------    -------
Gross margin .......................     2,460      3,018      5,842      8,938
Other costs and expenses
    Network operations .............     2,143      2,201      5,071      5,980
    General and administrative
     expenses ......................     4,045      3,770      8,357     15,258
    Sales and marketing expenses ...     2,402      2,358      7,130      9,776
    Research and development .......     1,829        564      3,531      1,273
    Depreciation and amortization ..     2,379      4,398      4,927     13,517
                                       -------    -------    -------    -------
Total Other costs and expenses .....    12,798     13,291     29,016     45,804
Operating loss .....................   (10,338)   (10,273)   (23,173)   (36,866)
Interest expense ...................     7,657      8,562      7,716     27,502
Interest income ....................     1,679      1,327      2,031      4,653
Foreign currency gains (losses) ....      (606)    (3,883)      (606)    (9,158)
                                       -------    -------    -------    -------
Loss before taxes and minority
 interest ..........................   (16,922)   (21,391)   (29,463)   (68,873)
Income tax benefit .................     7,846      3,814     12,716     10,207
                                       -------    -------    -------    -------
Net loss before minority interest ..    (9,076)   (17,577)   (16,748)   (58,666)
Minority interest ..................        --         --         94         --
                                       -------    -------    -------    -------
Net loss before Extraordinary items     (9,076)   (17,577)   (16,654)   (58,666)
Extraordinary items:
    Profit on early extinguishment
     of debt (net of tax) ..........        --     12,743         --     12,743
                                       -------    -------    -------    -------
Net loss ...........................   e(9,076)   e(4,834)  e(16,654)  e(45,923)
                                       =======    =======    =======    =======
Earnings per share
    Basic and diluted
    Loss per share before
     extraordinary items ...........     (0.44)     (0.76)     (0.85)     (2.53)
    Gain per share for extraordinary
     items .........................        --       0.55         --       0.55
                                       -------    -------    -------    -------
    Net loss per share .............     (0.44)     (0.21)     (0.85)     (1.98)
                                       =======    =======    =======    =======
Number of shares used to compute
 earnings per share ................    20,737     23,236     19,526     23,156
                                       =======    =======    =======    =======



           See accompanying notes to consolidated financial statements


                                       4

<PAGE>

                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                           For nine months ended
                                                               September 30,
                                                          ----------------------
                                                            1999         2000
                                                            ----         ----
Cash Flows from Operating Activities:                       (in thousands)
Net loss .............................................    e(16,654)    e(45,923)

Adjustments to reconcile net loss to net
 cash used by operations:
    Deferred tax credit ..............................     (13,021)     (10,212)
    Depreciation and amortization ....................       4,927       13,517
    Provision for losses on accounts receivable ......         170         (235)
    Amortization of bond discount ....................       1,265        4,215
    Accreted interest expense on long term debt ......       1,181        7,601
    Profit on early extinguishment of debt ...........          --      (12,743)
    Foreign currency translation loss ................         606        9,158

Changes in operating assets and liabilities:
    Trade accounts receivable ........................      (2,308)      (1,686)
    Other receivables ................................        (801)      (1,260)
    Other assets .....................................      (8,858)          39
    Prepaid expenses and other current assets ........        (233)       1,097
    Trade accounts payable ...........................       3,323       (7,381)
    Other accrued expenses and liabilities ...........       5,518       (6,636)
    Accrued personnel costs ..........................         681         (842)
                                                          --------     --------
       Total changes in operating assets
         and liabilities .............................      (2,678)     (16,669)
                                                          --------     --------
     Net cash (used in) operating activities .........     (24,204)     (51,291)

Cash Flows from Investing Activities:
Purchase of short term investments ...................          --      (35,740)
Proceeds from sale of short term investments .........          67       79,838
Purchase of property and equipment ...................     (10,055)     (25,014)
Product development costs ............................        (729)        (162)
Acquisition of businesses, net of cash acquired ......     (21,330)      (1,857)
Payment of deferred purchase obligations .............      (3,862)          --
                                                          --------     --------
     Net cash (used in) provided by investing
      activities .....................................     (35,909)      17,065

Cash Flows from Financing Activities:
Proceeds from issuance of bonds and other
 borrowings ..........................................     163,210          798
Proceeds from the issuance of bond warrants ..........      48,006           --
purchase of Restricted investments ...................     (55,170)          --
Repayment of borrowings ..............................        (358)     (27,106)
                                                          --------     --------
     Net cash (used in) provided by financing
      activities .....................................     155,688      (26,308)
                                                          --------     --------
Impact of foreign exchange rate changes ..............        (941)       5,778
                                                          --------     --------
Net (decrease) increase in cash and cash
 equivalents .........................................      94,634      (54,756)
Cash and cash equivalents at beginning of period .....      36,711       72,879
                                                          --------     --------
Cash and cash equivalents at end of period ...........    e131,345      e18,123
                                                          ========     ========


           See accompanying notes to consolidated financial statements

                                       5
<PAGE>


                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.

            NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with United States generally accepted  accounting  principles ("U.S.  GAAP") for
interim  financial  information.  Accordingly,  they do not  include  all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
adjustments  and  accruals)  considered  necessary  for a fair  presentation  of
financial  position  and results of  operations  have been  included.  Operating
results  for the nine  months  ending  September  30,  2000 are not  necessarily
indicative of results to be expected for the year ended  December 31, 2000.  For
further  information,   refer  to  the  Consolidated  Financial  Statements  and
Footnotes  thereto  included in the Company's annual report of Form 10-K for the
year ended December 31, 1999.

The Company  changed its  reporting  currency from US dollars to Euro's ('e') in
the quarter ended  September 30, 2000.  This change was made because  management
believes  that it results in a more  meaningful  presentation  of the  financial
position  and results of  operations  of the Company  since the  majority of its
operations  are conducted in currencies  that are linked to the Euro.  All prior
period  amounts have been  translated  to the Euro using the dollar Euro rate in
effect for those periods.

In addition,  during the third quarter of 2000 management  revised the layout of
the  consolidated  statements  of loss to be more  comparable  with  peer  group
companies,  and in management's  belief,  to make the financial  statements more
useable to readers.  Prior period  statements have been  reclassified to conform
with the current  presentation.  The principal revision relates to the statement
of  operations  where  direct cost of service has  replaced  costs of  revenues.
Direct cost of service consists of 1)  telecommunications  expenses which mainly
represent the cost of transporting Internet traffic from our customer's location
through a local  telecommunications  carrier to one of our access nodes, transit
and peering costs,  and the cost of leasing lines to  interconnect  our backbone
nodes,  and  2) the  cost  of  hardware  and  software  sold.  Depreciation  and
amortisation is no longer  allocated to direct cost of service.  Cybernet mainly
utilizes leased lines for it's network backbone,  and for connecting  network to
its major customers premises.

2. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:


                                                             September 30,
                                                       -------------------------
                                                         1999            2000
                                                         ----            ----
                                                          (in thousands, except
                                                             per share data)
Numerator:
     Net loss-numerator for basic and
      diluted loss per share ...................       e(16,654)       e(45,923)
Denominator:
     Denominator for basic and diluted
      loss per share--weighted average
      shares outstanding .......................         19,526          23,165
Basic and diluted loss per share ...............         e(0.85)         e(1.98)


The  denominator  for  diluted  earnings  per  share  excludes  the  convertible
preferred  stock and stock  options  because the  inclusion of these items would
have an anti-dilutive effect.

3. Segment information

The Company evaluates performance and allocates resources based on the operating
profit of its subsidiaries.  The Company operates in one line of business, which
is providing  international  Internet  backbone and access  services and network
business solutions for corporate  customers.  The Company's  reportable segments
are divided by country since each country's operations are managed and evaluated
separately.   Information  concerning  the  Company's  geographic  locations  is
summarized as follows:


                                       6

<PAGE>


                                                            Nine months ended
                                                              September 30
                                                      --------------------------
                                                         1999             2000
                                                         ----             ----
                                                             (in thousands)
Revenues:
     Germany .................................           e7,062         e14,412
     US ......................................               --              --
     Italy ...................................            3,801           6,213
     Other ...................................            2,853           5,387
                                                      ---------        --------
     Total ...................................          e13,716         e26,012
                                                      =========        ========
Depreciation and Amortization:
     Germany .................................           e4,025          e4,818
     US ......................................              306           6,551
     Italy ...................................              280           1,024
     Other ...................................              316           1,124
                                                      ---------        --------
     Total ...................................           e4,927         e13,517
                                                      =========        ========
Interest Expense:
     Germany .................................              e21            e154
     US ......................................            7,578          27,066
     Italy ...................................              104             277
     Other ...................................               12               5
                                                      ---------        --------
     Total ...................................           e7,716         e27,502
                                                      =========        ========
Interest Income:
     Germany .................................              e14            e127
     US ......................................            2,017           4,510
     Italy ...................................               --              12
     Other ...................................               --               4
                                                      ---------        --------
     Total ...................................           e2,031          e4,653
                                                      =========        ========
Loss before Taxes:
     Germany .................................         e(18,328)       e(12,324)
     US ......................................           (8,722)        (46,396)
     Italy ...................................           (1,805)         (5,008)
     Other ...................................             (608)         (5,145)
                                                      ---------        --------
     Total ...................................         e(29,463)       e(68,873)
                                                      =========        ========
Income tax benefit:
     Germany .................................           e8,179         e10,207
     US ......................................            4,510              --
     Italy ...................................               33              --
     Other ...................................               (6)             --
                                                      ---------        --------
     Total ...................................          e12,716         e10,207
                                                      =========        ========

Total Assets:
     Germany .................................          e41,037         e89,841
     US ......................................          232,579         112,237
     Italy ...................................            9,995          13,825
     Other ...................................            2,875           8,322
                                                      ---------        --------
     Total ...................................         e286,486        e224,225
                                                      =========        ========


4. Business Acquisitions

Effective April 13, 1999, the Company acquired 51% of the outstanding  shares of
Sunweb  Internet  Services SIS AG ("Sunweb") for a total  consideration  of Euro
1,587,000. Euro 924,000 of the purchase price was paid in cash (in Swiss Francs)
with the remainder  settled in exchange for the issuance of 25,680 shares of the
common  stock  of  the  Company.   Goodwill  recorded  in  connection  with  the
acquisition,  amounting to Euro  1,369,000,  is being  amortized  over 10 years.
Effective June,  2000, the Company acquired the remaining 49% of the outstanding
shares of Sunweb AG, for a  consideration  of Euro 480,000.  The entire purchase
price was paid in cash.  Goodwill recorded in connection with the acquisition of
the  remaining  shares in Sunweb  amounting  to Euro  480,000 was recorded in Q2
1999, and is being amortized over the remaining life of the goodwill  associated
with the acquisition of the majority shareholding in Q2 1999.


                                       7

<PAGE>


Effective June 30, 1999, the Company acquired 100% of the outstanding  shares of
Cybernet Italia S.p.A.("Cybernet  Italia")(formerly Flashnet S.p.A.) for a total
consideration of Euro 27,004,000. Euro 21,200,000 of the purchase price was paid
in cash (in  Italian  Lire)  with the  remainder  settled  in  exchange  for the
issuance of 301,290 shares of the common stock of the Company.  The  acquisition
has been  accounted for using the purchase  method of accounting and as such the
accompanying  financial  statements  reflect Cybernet Italia's results from June
30, 1999.  Goodwill  recorded in  connection  with the  acquisition  of Cybernet
Italia, amounting to Euro 16,431,000, is being amortized over 10 years.

Effective October 28 1999, the Company acquired of 51% of the outstanding shares
of Novento  Telecom AG  ("Novento")  and 51% of  Multicall  Telefonmarketing  AG
("Multicall")  for a  consideration  of Euro  1,625,000.  Euro  1,014,000 of the
purchase  price was paid in cash with the remainder  settled in exchange for the
issuance of 39,412  shares of the common stock of the Company.  The  acquisition
has been  accounted for using the purchase  method of accounting and as such the
accompanying  financial  statements reflect Novento and Multicall's results from
October 28,  1999.  Goodwill  recorded in  connection  with the  acquisition  of
Novento,  amounting to Euro 978,000, is being amortized over 10 years. Effective
January 1, 2000,  the Company  acquired  the  remaining  49% of the  outstanding
shares of Novento  Telecom AG  ("Novento")  and the  remaining  49% of Multicall
Telefonmarketing AG ("Multicall")  (together "Novento"),  for a consideration of
Euro  5,553,000.  Euro 1,022,000 of the purchase price was paid in cash with the
remainder  settled in exchange for the issuance of 543,812  shares of the common
stock of the Company.  Goodwill  recorded in connection  with the acquisition of
the remaining shares in Novento,  amounting to Euro 2,964,000 was recorded in Q1
2000, and is being amortized over the remaining life of the goodwill  associated
with the acquisition of the majority shareholding in Q4 1999.

Effective  October 29,  1999,  the Company  acquired  the  remaining  34% of the
outstanding  shares of Eclipse,  in which the Company  already  owned 66% of the
outstanding shares, for a total consideration of Euro 2,209,000. Euro 361,000 of
the purchase price was paid in cash with the remainder  settled by depositing of
136,402  shares of the common stock of the Company in a pooling trust from which
the shares will be released to the sellers. Goodwill recorded in connection with
the acquisition of the remaining shares in Eclipse, amounting to Euro 1,901,000,
is being  amortized over the remaining life of the goodwill  associated with the
acquisition of the majority  shareholding at the end of 1997. Under the terms of
the agreement the price was reviewed in light of the subsequent  movement in the
share price of Cybernet.  As a consequence of this review an additional  108,390
shares  were issued to the selling  shareholders  in May 2000.  Goodwill of Euro
1,118,000  was recorded in Q2 1999,  and is being  amortized  over the remaining
life  of  the  goodwill   associated   with  the  acquisition  of  the  majority
shareholding at the end of 1997.

Effective April 17, 2000, the Company acquired  Cybernet  S.a.g.l.,  an internet
service provider located in Lugano Switzerland,  for a maximum purchase price of
SFr 500,000 and 12,000 shares of our common  stock.  The 12,000 shares of common
stock will be released to the former owners only upon the achievement of certain
revenue  targets  during the fiscal year 2000. Of the purchase price SFr 400,000
was paid in cash at September 30, 2000. The  acquisition  has been accounted for
using the purchase method of accounting and as such the  accompanying  financial
statements  reflect  Cybernet  S.a.g.l's  results  from  April,  1999.  Goodwill
recorded in connection  with the acquisition of Cybernet  S.a.g.l,  amounting to
Euro 297,000, is being amortized over 10 years

The following  unaudited pro forma  consolidated  results of operations  for the
nine months ended September 30, 1999 and 2000 assume the acquisitions of Sunweb,
Cybernet Italia, Novento and Multicall had occurred as of January 1, 1999.


                                                           Nine months ended
                                                             September 30,
                                                         -----------------------
                                                           1999          2000
                                                           ----          ----
                                                            (in thousand except
                                                              per share data)
Revenue ........................................         e21,208        e26,012
Net loss .......................................         (20,057)       (45,923)
Basic and diluted loss per share ...............          e(0.99)        e(1.98)


5. Extraordinary items

During the third quarter of 2000,  the Company  repurchased a portion of its 14%
Senior Notes due 2009 (the "Notes").  The Company  repurchased Euro 59.8 million
($52.6 million) of Notes at average prices equal to


                                       8

<PAGE>


44% of the face value of the Notes repurchased.  As required by the terms of the
Notes,  the Company had  established an escrow account to provide for payment in
full of the first six  scheduled  interest  payments  on the Notes.  The amounts
contained in the escrow  account are carried on the  Company's  balance sheet as
"Restricted  investments".  As a  result  of the  repurchase  of  Notes in July,
approximately  Euro 15.6  million will be released  from the escrow  account and
will be  available  to the Company.  The price of the Notes  repurchased  in the
third  quarter  of 2000 net of amounts  released  from the  escrow  account  was
approximately Euro 10.7 million.  The face amount of the Notes outstanding after
the July repurchases is approximately Euro 110.8 million ($97.4 million).

The amount shown as an extraordinary  item represents the difference between the
amount paid to extinguish the Senior Notes and the carrying value on the balance
sheet, as of the date of extinguishment,  net of associated costs. The per share
amount of the net gain is Euro 0.55.

6. Subsequent events

Subsequent to September 30, 2000,  the Company  purchased  additional 14% Senior
Dollar Notes  payable,  due 2009,  with a face value of Euro 22.8 million ($20.0
million).  Following  this purchase the face value of the remaining  outstanding
14% Senior Dollar Notes  payable,  due 2009, was  approximate  Euro 88.0 million
($77.4  million).  The Notes were purchased by the Company for an average of 44%
of face  value.  The Company  intends to cancel  these  Notes.  This will permit
release of approximately Euro 5.9 million from its restricted investments.

7. Other matters

On July 14, 2000, the German government  approved  legislation which will, among
other things,  reduce the corporate tax rate to 25% and eliminate the tax credit
system. Furthermore,  the capital gains tax was reduced from 25% to 20%. The new
law is effective  January 1, 2001. As final  registration of the new law has not
yet been completed,  the  accompanying  financial  statements do not include any
adjustments  to reflect this  change.  The Company is  currently  assessing  the
impact of this new tax legislation and will make any required adjustments to its
deferred tax balances in the quarter ended December 31, 2000.

In  August  2000,  the  Company  agreed  to  take  a  25%  equity   interest  in
Bernigshausen  & Neben OHG ("B&N) an EDI software  development  company based in
Gottingen,  Germany,  for Euro  3,067,000.  Thus far the  company  has paid Euro
1,022,000 towards this commitment.

During the first nine months of 2000 1,613  Preferred  stock have been converted
into common stock.

8. Revenue seasonality

The Company's revenues are traditionally  lower in the third quarter of the year
due to the impact of the European holiday season in July and August.


                                       9

<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Overview

During the third quarter of 2000 management  revised the layout of the Company's
consolidated  statements of loss to be more comparable with peer companies,  and
in  management's  belief,  to make the  financial  statements  more  useable  to
readers.  As such certain  prior period  amounts in the  consolidated  financial
statements have been reclassified to conform with the current presentations. The
main  elements  of the  revision  to the layout of the  statements  are

1.   Costs  previously  reported as Cost of revenues  were  divided  between the
     Direct cost of services and Other costs and expenses (Network  Operations).
     Costs of revenue  were  previously  split  between  Internet  projects  and
     network services, and

2.   Depreciation  and amortization is now included as one amount in Other costs
     and expenses. Previously it was split between Cost or revenue and Operating
     costs.

In addition,  the Company  changed its reporting  currency from U.S.  dollars to
Euro to improve the presentation of its financial statements.

The following table sets forth the items of the Consolidated  Statements of Loss
for the three month and nine month  periods  ended  September 30, 1999 and 2000,
expressed as a percentage of total revenues:


                                            For three          For nine
                                           months ended      months ended
                                           September 30       September 30
                                       ------------------  -------------------
                                          1999      2000      1999      2000
                                          ----      ----      ----      ----
Revenue
     Internet Projects ..............     16.0%     12.0%     23.4%     12.1%
     Network Services ...............     84.0%     88.0%     76.6%     87.9%
Total revenues ......................    100.0%    100.0%    100.0%    100.0%
    Direct cost of services .........     58.7%     68.4%     57.4%     65.6%
Gross margin ........................     41.3%     31.6%     42.6%     34.4%
Other costs and expenses
    Network Operations ..............     36.0%     23.1%     37.0%     23.0%
    General and administrative
     expenses .......................     68.0%     39.5%     60.9%     58.7%
    Sales and Marketing expenses ....     40.4%     24.7%     52.0%     37.6%
    Research and development ........     30.7%      5.9%     25.7%      4.9%
    Depreciation and amortization ...     40.0%     46.1%     35.9%     52.0%
Total other costs and expenses ......    215.0%    139.2%    211.5%    176.1%
Operating loss ......................   (173.7)%  (107.6)%  (168.9)%  (141.7)%
Interest expense ....................    128.6%     89.7%     56.3%    105.7%
Interest income .....................     28.2%     13.9%     14.8%     17.9%
Realized foreign currency
 translation losses .................    (10.2)%   (40.7)%    (4.4)%   (35.2)%
Loss before taxes and minority
 interest ...........................   (284.3)%  (224.1)%  (214.8)%  (264.8)%
Income tax benefit ..................    131.8%     40.0%     92.7%     39.2%
Net loss before minority interest ...   (152.5)%  (184.1)%  (122.1)%  (225.5)%
Minority interest ...................      0.0%      0.7%      0.0%
Net loss before extraordinary
 items ..............................   (152.5)%  (184.1)%  (121.4)%  (225.5)%

Extraordinary items .................       --     133.5%       --      49.0%
Net loss ............................   (152.5)%   (50.6)%  (121.4)%  (176.5)%


Results of  operations--Three  Months Ended  September  30, 2000 Compared to the
Three Months Ended September 30, 1999

Revenues

Total  revenues  increased  60.4% from Euro  5,952,000 in the three months ended
September 30, 1999 to Euro 9,546,000 in the third quarter of 2000,  primarily as
a result of increased  Network  Services  revenues.  Internet  Project  revenues
increased 20% from Euro 953,000 in the third  quarter of 1999 to Euro  1,143,000
for the same period in 2000,  while Network  Services  revenues  increased 68.1%
from Euro 4,999,000 to


                                       10

<PAGE>


Euro 8,403,000. The third quarter Network Services revenues represented 84.0% of
total revenues in 1999, as compared with 88.0% in 2000

The increase in revenues  from Network  Services is mainly a result of expansion
of our customer  base,  which  provides us with a stream of recurring  revenues.
Although we have focused on building  recurring  revenues from Network Services,
building   relations  with  Internet  Project  customers  remains  a  continuing
strategy.  In the third  quarter of 2000,  we  consolidated  Euro  1,049,000  of
revenues  from Novento,  a company  acquired  after  September  1999.  Novento's
revenues  are derived  primarily  from  Network  Services.  Excluding  Novento's
revenues,  Network  Services  revenues  increased 47.1% in  the third quarter of
2000 compared with revenues of the  corresponding  period in 1999,  and Internet
Projects revenues increased by 20%.

Direct Cost of Services

Direct  cost of  services  increased  86.9% from  Euro 3,492,000  in  the  third
quarter of 1999 to Euro  6,528,000 in the third quarter of 2000.  Direct cost of
services consists of 1)  telecommunications  expenses which mainly represent the
cost of transporting  Internet  traffic from our customers'  location  through a
local telecommunications carrier to one of our access nodes, transit and peering
costs,  and the cost of leasing lines to interconnect our backbone nodes, and 2)
the cost of hardware and software sold.  Cybernet  mainly  utilizes leased lines
for it's backbone  network,  and to connect its network to its major  customers'
premises.  Direct cost of services as a percentage  of revenues  increased  from
58.7% in the third quarter of 1999 to 68.4% in the third quarter of 2000.

Network Operations

Network operations costs increased 2.7% from Euro 2,143,000 in the third quarter
of 1999 to Euro  2,201,000  in the third  quarter  of 2000.  Network  operations
mainly consist of 1) the personnel costs of technical and operational  staff and
related  overheads,  2) the  rental  of  premises  solely or  primarily  used by
technical  staff,  including  premises used to generate our colocation  services
revenue  and 3)  consulting  expenses  in  the  area  of  network  and  software
development.  Network  operations  costs,  as a percentage of revenues fell from
36.0% in the third quarter of 1999 to 23.1% in the third quarter of 2000.

We had 214 technical and operations  personnel on September 30, 2000 compared to
approximately 101 at September 30, 1999.

General and Administrative Expenses

General and  administrative  expenses decreased 6.8% from  Euro 4,045,000 in the
third quarter of 1999 to Euro  4,209,000 in the third  quarter of 2000.  General
and administrative  expenses consist principally of salaries and other personnel
costs  for our  administrative  staff,  office  rent,  and  external  legal  and
accounting   advisory   costs.   As  a  percentage  of  revenues,   general  and
administrative  expenses  decreased  from 67.9% in the third  quarter of 1999 to
39.5% in the third quarter of 2000. The reduction reflects cost control measures
instituted towards the end of 1999.

General and Administrative  personnel decreased from approximately 93 at the end
of September 1999 to 79 at the end of September 2000.

Excluding  the general and  administrative  expenses in the  companies  acquired
since the end of the third quarter of 1999, general and administrative  expenses
decreased 12% from Euro 4,045,000 in the third quarter of 1999 to Euro 3,557,000
in the third quarter of 2000.

Sales and Marketing Expenses

Sales and marketing  expenses decreased by 1.8% from Euro 2,402,000 in the third
quarter  of 1999 to Euro  2,358,000  in the  third  quarter  of 2000.  Sales and
marketing  expenses  consist  principally  of  salaries  of our sales  force and
marketing personnel and advertising and communication  expenditures.  The number
of sales and marketing staff decreased from  approximately  143 on September 30,
1999 to 124 on September 30, 2000.  As a percentage  of revenues,  our sales and
marketing  expenses  decreased  from 40.4% in the third quarter of 1999 to 24.7%
in the third quarter of 2000.

                                       11

<PAGE>


Excluding the sales and marketing  expenses in the companies  acquired since the
end of the third quarter of 1999,  sales and marketing  expenses  decreased 5.0%
from Euro  2,402,000 in the third quarter of 1999 to Euro 2,282,000 in the third
quarter of 2000.

Research and Development

Research and  development  expenses  decreased  69.2% from Euro 1,829,000 in the
third quarter of 1999 to Euro 564,000 in the third quarter of 2000. Research and
development expenses consist principally of personnel costs of employees working
on product  development,  consulting  costs and  certain  overhead  items.  As a
percentage of revenues,  research and  development  decreased  from 30.7% in the
third quarter of 1999 to 5.9% in the third quarter of 2000.

Depreciation and Amortization

Depreciation  and  amortization  expenses  increased  from Euro 2,379,000 in the
third  quarter of 1999 to Euro  4,398,000  in the third  quarter  of 2000.  This
increase reflects 1) increased  depreciation of property and equipment purchased
to build the  corporate  infrastructure  necessary  to support  our  anticipated
growth,  and 2) additional  investments  in our own network  infrastructure  and
supporting  systems and 3)  increased  amortization  of goodwill  related to our
acquisitions.  Goodwill represents the excess of the purchase price of companies
we purchased over the fair value of the assets of those  companies.  Goodwill is
amortized over 5 - 10 years.

Interest Income and Expense

Interest  expense  increased from Euro 7,657,000 in the third quarter of 1999 to
Euro  8,562,000 in the third quarter of 2000 as a result of our issuance of debt
securities in the third quarter of 1999.

Interest  income  decreased  from Euro 1,679,000 in the third quarter of 1999 to
Euro  1,327,000 in the third quarter of 2000 as a result of the  utilization  of
the proceeds from the issuance of debt securities in the third quarter of 1999

In the third  quarter of 2000, we incurred net foreign  exchange  losses of Euro
3,883,000  compared with Euro 606,000 in the third quarter of 1999,  because our
borrowings are denominated in US dollars but our principal operating currency is
the Euro. We will continue to record such losses while the US dollar strengthens
against the Euro.

Income Taxes

We recorded  income tax benefits of Euro  7,846,000 in the third quarter of 1999
and Euro  3,814,000  in the  third  quarter  of 2000  arising  principally  from
operating  losses.  Although we have additional  operating  losses,  a valuation
allowance  has been  established  to  reflect  the  estimated  amount of the tax
benefit  that may not be  realized.  The  majority of the  operating  losses are
associated  with  operations  subject to taxation  under the German tax code. We
have  recorded  valuation  allowances on all tax assets  arising from  operating
losses generated outside of Germany since we can not make the determination that
the  eventual  realization  of these  assets is more likely than not.  Under the
current  German tax code,  these net  operating  losses  may be carried  forward
indefinitely and used to offset our future taxable earnings.

As described in the Subsequent  Events note to the financial  statements  above,
the German  government has enacted  legislation  which will, among other things,
reduce  the  corporate  tax rate to 25% and  eliminate  the tax  credit  system.
Further,  the  capital  gains tax was  reduced  from 25% to 20%.  The new law is
effective  January  1,  2001.  The  impact of this new tax  legislation  will be
reflected in the deferred tax balances in the quarter ended December 31, 2000.

Extraordinary Items

During the third  quarter of 2000,  the Company  repurchased  Euro 59.8  million
($52.6 million) of its 14% Senior Notes due 2009 (the "Notes") generating a gain
of Euro 12.7 million.  The Notes were repurchased at average prices equal to 44%
of  face  value.  As  required  by the  terms  of the  Notes,  the  Company  had
established  an escrow  account to provide  for payment in full of the first six
scheduled  interest  payments on the Notes. The amounts  contained in the escrow
account are carried on the Company's balance sheet

                                       12

<PAGE>


as "Restricted investments". As a result of the repurchase of Notes in the third
quarter,  approximately  Euro 15.6 million ($13.7 million) will be released from
the escrow  account and will be available to the Company.  The purchase price of
the Notes  repurchased,  net of amounts  released from the escrow  account,  was
approximately  Euro 10.7 million  ($9.4  million).  The face amount of the Notes
outstanding after these  repurchases is approximately  Euro 110.8 million ($97.4
million).

The amount shown as an extraordinary  item represents the difference between the
amount paid to extinguish the Senior Notes and the carrying value on the balance
sheet, as of the date of extinguishment, net of associated costs

Results of operations--Nine Months Ended September 30, 2000 compared to the Nine
Months Ended September 30, 1999

Revenues

Total  revenues  increased  89.6% from  Euro  13,716,000  in the nine  months to
September  30,  1999 to Euro  26,012,000  in the  first  nine  months  of  2000,
primarily as a result of increased Network Services  revenues.  Internet Project
revenues decreased 1.9% from  Euro 3,211,000 in the first nine months of 1999 to
Euro  3,151,000  for the same period in 2000,  while Network  Services  revenues
increased  117.6% from Euro  10,505,000  to Euro  22,861,000.  Network  Services
revenues  represented 76.6% of total revenues  in the first nine months of 1999,
compared with 87.9% in the first nine months of 2000.

The increase in revenues  from Network  Services is mainly a result of expansion
of our customer  base,  which  provides us with a stream of recurring  revenues.
Although we have focused on building  recurring  revenues from Network Services,
building   relations  with  Internet  Project  customers  remains  a  continuing
strategy.  In the first none months of 2000, we  consolidated  Euro 3,555,000 of
revenues  from  Novento,  a company  which was acquired  after  September  1999.
Novento's  revenues  are derived  primarily  from  Network  Services.  Excluding
Novento's revenues,  Network Services revenues increased 83.8% in the first nine
months of 2000  compared  with the  corresponding  period in 1999,  and Internet
Projects revenues decreased by 1.9%.

Direct Cost of Services

Direct cost of services  increased 118.0% from Euro 7,874,000 in the nine months
ended  September 30, 1999 to Euro  17,074,000 in the nine months ended September
30, 2000.  Direct cost of services  consists of 1)  telecommunications  expenses
which  mainly  represent  the cost of  transporting  Internet  traffic  from our
customer's  location  through a local  telecommunications  carrier to one of our
access  nodes,  transit  and  peering  costs,  and the cost of leasing  lines to
interconnect  our backbone nodes, and 2) the cost of hardware and software sold.
Cybernet mainly utilizes leased lines for it's backbone network,  and to connect
its  network to its major  customers'  premises.  Direct  cost of  services as a
percentage of revenues  increased from 57.4% in the nine months ended  September
30, 1999 to 65.6% in the nine months ended September 30, 2000.

Network operations

Network  operations  costs increased 17.9% from Euro 5,071,000 in nine months to
September  30, 1999 to Euro  5,980,000 in the nine months to September 30, 2000.
Network  operations  mainly  consist of 1) the personnel  costs of technical and
operational  staff and related  overheads,  2) the rental of premises  solely or
primarily  used by  technical  staff,  including  premises  used to generate our
colocation  services  revenue and 3) consulting  expenses in the area of network
and software  development.  Network  operations as a percentage of revenues fell
from 37.0% in the nine months to September  30, 1999 to 23.0% in the nine months
to September 30, 2000.

We had 214 technical and operations  personnel on September 30, 2000 compared to
approximately 101 at September 30, 1999.

General and Administrative Expenses

General and administrative  expenses increased 87.8% from  Euro 8,357,000 in the
first nine months of 1999 to Euro  15,258,000  in the first nine months of 2000.
General and  administrative  expenses consist  principally of salaries and other
personnel costs for our  administrative  staff,  office rent, and external legal

                                       13

<PAGE>


and accounting  advisory costs.  The increase in our general and  administrative
expenses  reflects the costs of building a corporate  infrastructure  to support
our growth.  As a percentage of revenues,  general and  administrative  expenses
fell from  60.4% in the  first  nine  months of 1999 to 58.7% in the first  nine
months of 2000.

General and Administrative  personnel  decreased from 93 at the end of September
1999 to 79 at the end of September 2000.

Excluding the general and administrative  expenses of Novento which was acquired
after the end of September 1999, general and  administrative  expenses increased
79.0% from  Euro  8,357,000 in the first nine months of 1999 to Euro  14,921,000
in the first nine months of 2000.

Sales and Marketing Expenses

Sales and marketing expenses increased by 37.1% from Euro 7,130,000 in the first
nine months of 1999 to Euro  9,776,000  in the first nine months of 2000.  Sales
and marketing  expenses  consist  principally of salaries of our sales force and
marketing personnel and advertising and communication  expenditures.  The growth
in these  expenses was  partially  due to  additions to the sales and  marketing
staff which  increased  from  approximately  88 on September  30, 1999 to 124 on
September  30,  2000.  As a  percentage  of  revenues,  our sales and  marketing
expenses  decreased  from 52.0% in the first nine months of 1999 to 37.6% in the
first nine months of 2000.

Excluding the sales and marketing  expenses of Novento which was acquired  since
the end of September 1999, sales and marketing  expenses increased 34% from Euro
7,130,000  in the first nine months of 1999 to Euro  9,266,000 in the first nine
months of 2000.

Research and Development

Research and  development  expenses  decreased  63.9% from Euro 3,531,000 in the
first nine  months of 1999 to Euro  1,273,000  in the first nine months of 2000.
Research and  development  expenses  consist  principally of personnel  costs of
employees working on product development,  consulting costs and certain overhead
items.  As a percentage of revenues,  research and  development  decreased  from
25.7% in the first nine months of 1999 to 4.9% in the first nine months of 2000.

Depreciation and Amortization

Depreciation  and  amortization  expenses  increased  from Euro 4,927,000 in the
first nine months of 1999 to Euro  13,517,000  in the first nine months of 2000.
This  increase  reflects 1) increased  depreciation  of property  and  equipment
purchased  to build  the  corporate  infrastructure  necessary  to  support  our
anticipated   growth,   and  2)  additional   investments  in  our  own  network
infrastructure and supporting systems and 3) increased  amortization of goodwill
related to our  acquisitions.  Goodwill  represents  the excess of the  purchase
price of  companies  we  purchased  over the fair  value of the  assets of those
companies. Goodwill is amortized over 5 - 10 years.

Interest Income and Expense

Interest expense  increased from Euro 7,716,000 in the first nine months of 1999
to Euro  27,502,000 in the first nine months of 2000 as a result of our issuance
of debt securities in the second half of 1999.

Interest  income  increased from Euro 2,030,000 in the first nine months of 1999
to Euro  4,653,000  in the first  nine  months  of 2000 as a result of  interest
earned on the unutilized proceeds of these offerings.

In the first nine months of 2000 we incurred net foreign exchange losses of Euro
9,158,000  compared with Euro 606,000 for the first nine months of 1999, because
our  borrowings  are  denominated  in US  dollars  but our  principal  operating
currency  is the Euro.  We will  continue to record such losses if the US dollar
strengthens against the Euro.

Income Taxes

We recorded  income tax benefits of Euro  12,715,000 in the first nine months of
1999 and Euro 10,207,000 in the first nine months of 2000,  arising  principally
from operating losses. Although we have additional

                                       14

<PAGE>


operating  losses,  a valuation  allowance has been  established  to reflect the
estimated  amount of the tax benefit that may not be  realized.  The majority of
the operating  losses are associated with  operations  subject to taxation under
the German tax code.  We have  recorded  valuation  allowances on all tax assets
arising from operating losses generated outside of Germany since we can not make
the determination  that the eventual  realization of these assets is more likely
than not. Under the current German tax code,  these net operating  losses may be
carried forward indefinitely and used to offset our future taxable earnings.

As described in the Subsequent  events note to the financial  statements  above,
the German  government has enacted  legislation  which will, among other things,
reduce  the  corporate  tax rate to 25% and  eliminate  the tax  credit  system.
Further,  the  capital  gains tax was  reduced  from 25% to 20%.  The new law is
effective  January  1,  2001.  The  impact of this new tax  legislation  will be
reflected in the deferred tax balances in the quarter ended December 31, 2000.

Extraordinary Items

During the third  quarter of 2000,  the Company  repurchased  Euro 59.8  million
($52.6 million) of its 14% Senior Notes due 2009 (the "Notes") generating a gain
of Euro 12.7 million.  The Notes were repurchased at average prices equal to 44%
of  face  value.  As  required  by the  terms  of the  Notes,  the  Company  had
established  an escrow  account to provide  for payment in full of the first six
scheduled  interest  payments on the Notes. The amounts  contained in the escrow
account are carried on the Company's balance sheet as "Restricted  investments".
As a result of the repurchase of Notes in the third quarter,  approximately Euro
15.6 million  ($13.7  million) will be released from the escrow account and will
be available to the Company. The purchase price of the Notes repurchased, net of
amounts released from the escrow account,  was  approximately  Euro 10.7 million
($9.4 million). The face amount of the Notes outstanding after these repurchases
is approximately Euro 110.8 million ($97.4 million).

The amount shown as an extraordinary  item represents the difference between the
amount paid to extinguish the Senior Notes and the carrying value on the balance
sheet, as of the date of extinguishment, net of associated costs.

Liquidity and Capital Resources

Cash Flow

Operating  activities  used cash of Euro  51,291,000 in the first nine months of
2000 compared to Euro  24,204,000  for the  comparable  period in 1999.  This is
principally the result of higher net losses as explained above.

For the  first  nine  months  of 2000  investing  activities  generated  cash of
Euro17,065,000  compared  to cash  used of Euro  39,909,000  for the  comparable
period in 1999.  This  increase  in cash  generated  from  investing  activities
represents   the  net  proceeds   from  the  purchase  and  sale  of  short-term
investments, partially offset by the cash outflows for the purchases of property
and  equipment  (Euro  25,014,000).  Expenditures  for  property  and  equipment
consisted principally of the fit-out of POP's and data facilities, the purchases
of computer hardware and software and other expenditures related to our Internet
backbone and equipment.

For the first nine months of 2000,  net cash used by  financing  activities  was
Euro 26,308,000 compared to the provision of Euro 155,688,000 in the same period
in 1999.  The cash was used in the third quarter of 2000 to  repurchase  part of
the outstanding Senior Notes as detailed under Extraordinary items above

Working Capital

On September 30, 2000, our working capital, defined as the excess of our current
assets over our  current  liabilities,  was Euro  62,218,000  as  compared  Euro
102,255,000 at December 31, 1999.

Our net accounts  receivable  as of  September  30,  2000,  was Euro  11,041,000
compared to Euro  9,120,000  as at  December  31,  1999.  We have taken steps to
improve the timely collection of receivables, some of which have started to show
an  impact,  as the  level of  accounts  receivable  compared  with the level of
activity is lower in 2000 than in 1999.

Cash and cash  equivalents  amounted to Euro  18,123,000  at September  30, 2000
compared to Euro  72,878,000 at December 31, 1999. Of this,  approximately  Euro
15.8 million was held in US dollars.

                                       15

<PAGE>


We also had various short-term  investments  denominated in Euro's totaling Euro
17.2 million and short-term investments  denominated in US dollars totaling Euro
15.5 million at September  30, 2000.  In addition,  at September 30, 2000 we had
approximately  Euro 28.9 million of Restricted  investments  held in escrow,  to
meet the next four semi-annual  interest  payments on our 14% Senior Notes. This
amount is invested in US treasury securities.

Credit Arrangements

As of September 30, 2000, we had short-term unsecured overdraft facilities under
which  we  and  our  subsidiaries  could  borrow  up to  Euro  1,248,000.  These
facilities are denominated in Italian Lire (in the amount of Euro 1,176,000) and
Austrian Schilling (in the amount of Euro 72,000).  The interest rates fluctuate
based upon current lending rates. The weighted  average  borrowing rate on these
facilities  was 5.56% as September 30, 2000.  In addition,  certain of our banks
provide overdraft protection exceeding the limits specified in these agreements.
As of September 30, 2000, we and our subsidiaries had used Euro 404,000 of these
facilities.  In addition,  as September 30, 2000,  we had long-term  capitalized
lease obligations of Euro 3,709,000.

Capital Expenditures

For the nine months ended  September  30,  2000,  capital  expenditures  totaled
approximately Euro 25,014,000.  We funded these capital  expenditures  primarily
from net cash provided by financing  activities.  Our  investments  in the first
nine months of 2000 included: (i) investments in our backbone infrastructure and
equipment of approximately  Euro 2,483,000,  (ii) investments in data facilities
and data center  premises  totaling  approximately  Euro  14,664,000,  and (iii)
investments in other equipment totaling approximately Euro 7,898,000.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We  do  not  utilize  market-risk-sensitive   instruments,  such  as  derivative
financial  instruments.  Our primary market risk is in the area of interest rate
and foreign currency exchange rate fluctuations.

We maintain our cash  balances in deposits at banks and in highly  liquid short-
term  investments,  such as money market funds and US Treasury Bonds,  therefore
lowering our exposure to interest income risks. As a result of our sale of Units
consisting  of 14.0%  Senior Notes due 2009 and warrants in July 1999 (the "Unit
Offering"),  as well as our sale of  Convertible  Notes in August 1999 we have a
substantial amount of debt in U.S. dollars.

Significant  fluctuations in the U.S. dollar to Euro exchange rate could have an
adverse impact on the amount of Deutsche Marks required to satisfy this debt. We
estimate  that a 10% increase in the exchange rate between the Deutsche Mark and
the U.S.  dollar would increase the Deutsche Mark amount  required to settle the
debt  outstanding  from the Unit offering and our sale of  Convertible  Notes by
approximately Euro 22 million.


                                       16

<PAGE>


                               INDEX TO EXHIBITS



Exhibit Number                Description
--------------                -----------

     10.1           B&N Software AG Shareholders' Agreement

     27.1           Financial Data Schedule which is submitted electronically to
                    the  Securities  and  Exchange  Commission  for  information
                    purposes only and is not filed




<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

NOT APPLICABLE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NOT APPLICABLE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NOT APPLICABLE

ITEM 5. OTHER INFORMATION

NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits required by Item 601 of Regulation S-B:

     10.1 B&N Software AG Shareholders' Agreement

     27.1 Financial  Data  Schedule  which is  submitted  electronically  to the
          Securities and Exchange  Commission for information  purposes only and
          is not filed

(b)  Reports on Form 8-K:

     None

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                 CYBERNET INTERNET SERVICES INTERNATIONAL, INC.



                 BY:  /s/ Andreas Eder
                      -------------------------------------
                      Andreas Eder
                      Chairman of the Board, President, and
                      Chief Executive Officer



                 BY:  /s/ Paolo Di Fraia
                      -------------------------------------
                      Paolo Di Fraia
                      Chief Financial Officer and Treasurer


Dated:  November 7, 2000


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