<PAGE>   1
 
================================================================================
 
                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, 1997
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
                         Commission file number 0-6683
 
                              SONOMA INTERNATIONAL
       (Exact name of small business issuer as specified in its charter)
 
<TABLE>
<S>                                            <C>
                    NEVADA                                       94-0880052
       (State or other jurisdiction of                         (IRS Employer
        incorporation or organization)                      Identification No.)
 
       3000 LEXINGTON FINANCIAL CENTER                             40507
                LEXINGTON, KY.                                   (Zip Code)
   (Address of principal executive offices)
</TABLE>
 
                                 (606) 281-0000
                (Issuer's telephone number, including area code)
 
     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
 
As of June 30, 1997, there were 2,300,000 shares of the issuer's common stock,
par value $0.001, outstanding.
 
================================================================================
<PAGE>   2
                          PART I FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                               Page
<S>                                                                                            <C>
ITEM 1. FINANCIAL STATEMENTS
   Consolidated Balance Sheets at December 31, 1996
     and September 30, 1997 (unaudited)                                                          2
   Consolidated Statements of Operations for the three months
     ended September 30, 1996 and 1997 (unaudited) and the nine months
     ended September 30, 1996 and 1997 (unaudited)                                               4
   Consolidated Statements of Cash Flows for the nine months
     ended September 30, 1996 and 1997 (unaudited)                                               5
   Notes to Consolidated Financial Statements (unaudited)                                        6

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
   CONDITION AND RESULTS OF OPERATIONS                                                           7

ITEM 5. OTHER INFORMATION                                                                       11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                        11
   SIGNATURES                                                                                   11
</TABLE>

                                       1

<PAGE>   3


                      SONOMA INTERNATIONAL AND SUBSIDIARIES
                           Consolidated Balance Sheets
                    December 31, 1996 and September 30, 1997

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                 December 31,        September 30,
                                                                                     1996                 1997
                                                                                ---------------     ---------------
                                                                                                       (unaudited)
<S>                                                                             <C>                 <C>            
CURRENT ASSETS
   Cash                                                                         $       104,353     $        18,111
   Escrow funds                                                                          88,400             178,781
   Receivables:
       Trade (net of allowance for doubtful accounts
          of $3,876 for each year)                                                       54,492              85,297
       Other                                                                             27,008             101,493
   Inventory                                                                             85,668             120,924
   Prepaid expenses                                                                      17,651             128,403
                                                                                ---------------     ---------------

             Total current assets                                                       377,572             633,009
                                                                                ---------------     ---------------

PROPERTY AND EQUIPMENT
   Buildings and improvements                                                         2,599,885           2,460,691
   Land                                                                               3,150,000           3,150,000
   Land improvements                                                                    293,831             296,395
   Docks and floating buildings                                                       8,220,250           8,225,863
   Boats and improvements                                                             2,116,453           2,081,125
   Furnishings, fixtures and equipment                                                1,692,566           1,848,915
   Computers under capital lease                                                        193,171             194,615
   Fuel tanks and containment buildings                                                 151,132             151,132
   Vehicles                                                                              22,482              22,753
   Construction in progress                                                             140,178             408,949
                                                                                ---------------     ---------------
                                                                                     18,579,948          18,840,438

Less accumulated depreciation and amortization                                        4,537,677           5,008,912
                                                                                ---------------     ---------------

Net property and equipment                                                           14,042,271          13,831,526
                                                                                ---------------     ---------------

OTHER ASSETS
   Deferred loan fees, net of accumulated amortization
       of $77,593 and $141,855                                                          322,858             255,094
   Goodwill, net of accumulated amortization of
       $184,250 and $198,069                                                          1,006,310             992,491
   Deferred offering costs                                                              336,632             578,852
                                                                                ---------------     ---------------

                Total other assets                                                    1,665,800           1,826,437
                                                                                ---------------     ---------------

TOTAL ASSETS                                                                    $    16,085,643     $    16,290,972
                                                                                ===============     ===============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       2

<PAGE>   4


                      SONOMA INTERNATIONAL AND SUBSIDIARIES
                     Consolidated Balance Sheets - Continued
                    December 31, 1996 and September 30, 1997


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                                 December 31,        September 30,
                                                                                     1996                1997
                                                                                ---------------     ---------------
                                                                                                      (unaudited)
<S>                                                                             <C>                 <C>            
CURRENT LIABILITIES
    Current portion of long-term debt (including $4,052,778
       $4,262,587 to related parties)                                           $     4,395,941     $     4,683,325
    Accounts payable                                                                    453,522             554,241
    Accrued interest (including $57,240 and
       $243,709 to related parties)                                                     150,733             322,225
    Accrued liabilities                                                                 299,802             657,980
    Security deposits                                                                    49,319              45,494
    Deferred revenue                                                                    696,622             330,901
    Payable to related party                                                             53,200                  --
                                                                                ---------------     ---------------

                Total current liabilities                                             6,099,139           6,594,166
                                                                                ---------------     ---------------

LONG-TERM LIABILITIES
   Long-term debt, less current maturities (including $114,830
       in 1996 due to related parties)                                               10,263,786           9,925,252
                                                                                ---------------     ---------------

                Total long-term liabilities                                          10,263,786           9,925,252
                                                                                ---------------     ---------------

STOCKHOLDERS' DEFICIT
   Common stock, $0.001 par value, authorized, 20,000,000,
       issued and outstanding shares, 2,300,000
       and 1,369,025                                                                      2,300               2,300
   Additional paid-in capital                                                         1,392,346           1,392,346
   Accumulated deficit                                                               (1,671,928)         (1,623,092)
                                                                                ---------------     ---------------

                Total stockholders' deficit                                            (277,282)           (228,446)
                                                                                ---------------     ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                     $    16,085,643     $    16,290,972
                                                                                ===============     ===============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       3

<PAGE>   5
                      SONOMA INTERNATIONAL AND SUBSIDIARIES
                      Consolidated Statements of Operations
          Three months and nine months ended September 30, 1996 and 1997

<TABLE>
<CAPTION>
                                                                    Three months                         Nine months
                                                                        ended                               ended
                                                                1996              1997              1996              1997
                                                            ------------      ------------      ------------      ------------
<S>                                                         <C>               <C>               <C>               <C>         
REVENUES
   Slip fees                                                $    335,943      $    672,829      $    929,990      $  1,320,139
   Boat rental                                                   546,664           523,805           694,093           644,728
   Lodge                                                         373,821           182,080           619,728           630,562
   Fuel                                                          379,375           859,930           529,671         1,842,162
   Convenience store and merchandise                             233,139           186,552           342,757           298,741
   Restaurant                                                    217,790           248,166           341,547           365,993
   Other                                                          46,643            (2,639)           83,316            90,898
                                                            ------------      ------------      ------------      ------------
             Total revenues                                    2,133,375         2,670,723         3,541,102         5,193,223

COST OF REVENUES
   Slip                                                           45,818            43,534           102,356           116,187
   Boat rental                                                   101,062            91,433           245,247           170,453
   Lodge                                                          88,485            89,307           191,867           185,261
   Fuel                                                          256,020           586,859           356,606         1,276,922
   Convenience store and merchandise                             171,005           147,251           267,691           234,217
   Restaurant                                                    156,283           194,344           267,162           293,236
   Other                                                          32,681            93,475            72,449           177,928
                                                            ------------      ------------      ------------      ------------
             Total cost of revenues                              851,354         1,246,203         1,503,378         2,454,204

GROSS PROFIT                                                   1,282,021         1,424,520         2,037,724         2,739,019

SELLING, GENERAL AND ADMINISTRATIVE (including
   related party amounts for management and
   guarantee fees of $64,284 and $80,386) for
   the three and nine months ended September 30, 1996
   and -0- for the three and nine months ended
   September 30, 1997                                            428,266           445,644           995,146         1,173,055
AMORTIZATION OF GOODWILL                                          17,192            39,804            55,774            73,299
DEPRECIATION AND AMORTIZATION                                    122,174           119,719           325,060           450,587
                                                            ------------      ------------      ------------      ------------

INCOME (LOSS) FROM OPERATIONS                                    714,389           819,353           661,744         1,042,078  
INTEREST EXPENSE (including interest to related
   parties of $71,720, $91,582, $219,754 and $240,652)           268,425           342,086           736,738           993,242
                                                            ------------      ------------      ------------      ------------

NET LOSS BEFORE EXTRAORDINARY ITEMS                              445,964           477,267           (74,994)           48,836

EXTRAORDINARY ITEMS
   Gain on extinguishment of debt,
       net of income tax of $0                                        --                --         2,518,487                --
                                                            ------------      ------------      ------------      ------------

NET INCOME (LOSS)                                           $    445,964      $    477,267      $  2,443,493      $    48,836
                                                            ============      ============      ============      ============ 

Net income (loss) per common share before
   extraordinary items                                      $      (0.33)     $       0.21      $      (0.05)     $      0.02
                                                            ------------      ------------      ------------      ------------ 

Net income (loss) per common share                          $      (0.33)     $       0.21      $       1.78      $      0.02
                                                            ------------      ------------      ------------      ------------ 

Weighted average shares outstanding                            1,369,025         2,300,000         1,369,025         2,300,000
                                                            ------------      ------------      ------------      ------------
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       4




<PAGE>   6


                    SONOMA INTERNATIONAL AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                Nine months ended September 30, 1996 and 1997


<TABLE>
<CAPTION>
                                                                                     1996                1997
                                                                                ---------------     ---------------
<S>                                                                             <C>                 <C>             
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                                            $     2,443,493     $        48,836 
   Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
   Depreciation and amortization of fixed assets                                        325,060             450,587
   Amortization of goodwill                                                              55,774              73,299
   Amortization of deferred gain on sale leaseback                                      (75,800)                 --
   Gain on debt extinguishment                                                       (2,518,487)                 --
   Changes in assets and liabilities (net of acquisitions):
       Decrease (increase) in escrow funds                                              (20,224)            (90,381)
       Decrease (increase) in trade receivables                                         (62,280)            (30,805)
       Decrease (increase) in other receivables                                        (117,707)            (74,485)
       Decrease (increase) in inventory                                                  (2,871)            (35,256)
       Decrease (increase) in prepaid expenses                                            7,584            (110,752)
       Increase (decrease) in accounts payable                                          155,539             100,719
       Increase (decrease) in accrued interest                                          242,088             171,492
       Increase (decrease) in accrued liabilities                                        68,505             358,178
       Increase (decrease) in security deposits                                          (3,514)             (3,825)
       Increase (decrease) in related party loan                                             --             (53,200)
       Increase (decrease) in deferred revenue                                         (326,808)           (365,721)
       Increase (decrease) in accrued guarantee fees                                     15,000                  --
       Increase (decrease) in accrued management fees                                   178,055                  --
                                                                                ---------------     ---------------
Net cash provided by operating activities                                               363,407             438,686
                                                                                ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of property and equipment                                                (144,263)           (260,490)
                                                                                ---------------     ---------------
Net cash used by investing activities                                                  (144,263)           (260,490)
                                                                                ---------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from bank and related party loans                                        7,897,626             455,115
    Repayments of borrowings                                                         (7,169,482)           (403,965)
    Repayments of obligation under capital lease                                       (616,029)                 --
    Debt financing costs and other deferred costs                                      (327,524)           (315,588)
                                                                                ---------------     ---------------
Net cash provided by financing activities                                              (215,409)           (264,438)
                                                                                ---------------     ---------------

NET INCREASE (DECREASE) IN CASH                                                           3,735             (86,242)
    Cash at beginning of the year                                                         9,628             104,353
                                                                                ---------------     ---------------
    Cash at end of the year                                                     $        13,363     $        18,111
                                                                                ===============     ===============


SUPPLEMENTAL DISCLOSURES
   Cash paid during the period for interest                                     $       454,715     $       768,913
                                                                                ===============     ===============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       5

<PAGE>   7


                    SONOMA INTERNATIONAL AND SUBSIDIARIES
                            (A Nevada Corporation)
                Notes to the Consolidated Financial Statements
        Three months and nine months ended September 30, 1996 and 1997


NOTE A -- ORGANIZATION

         Sonoma Quicksilver Mines, Inc., a public company, was incorporated
under the laws of the State of Nevada on September 10, 1940. The name was
subsequently changed to Sonoma International ("Sonoma"). Sonoma had several
failed business operations and since 1988 its only activity had been to search
for a company or assets to acquire.

         September 12, 1996, Sonoma entered into an agreement (the "Agreement")
with Clear Creek Investments, LLC, a Kentucky Limited Liability Company ("Clear
Creek") and owner of the general partner of Jamestown Resort & Marina, LTD
("Jamestown"), and holders of the limited partnership interests in Jamestown.
The Agreement required the transfer and assignment to Sonoma of Jamestown's
general partner and all limited partnership interests. The Agreement, effective
on December 9, 1996, incorporates the payment of the preference payments due
(Note I) through the issuance of shares of Sonoma. In addition, the Agreement
required that Sonoma effect a one for two hundred reverse split (and increase
authorized shares to 20,000,000 (post split)), leaving 300,000 shares issued and
outstanding, and issue 1,700,000 shares to Clear Creek and affiliated and
related entities or individuals for the acquisition of Jamestown. The
consolidated financial statements including all references to the number of
shares of common stock and all per share information have been adjusted to
reflect the common stock reverse split and the revised authorized number of
shares on a retroactive basis.

         October 31, 1996, Key West Conch Harbor, Inc. ("Key West"), by consent
of its shareholders, entered into an agreement (the "Agreement") with Sonoma.
The Agreement required the transfer and assignment to Sonoma of all of the
common stock of Key West in exchange for 300,000 shares of common stock of
Sonoma and a demand note for $175,000. The transaction was completed effective
December 9, 1996.

         For accounting purposes, as the Jamestown Limited partners and general
partner end up with the majority of Sonoma's stock, the acquisition by Sonoma of
all of the Jamestown limited partnership interests and general partnership
interest was accounted for as a recapitalization of Jamestown with Jamestown as
the acquirer (a reverse acquisition). Accordingly, the financial statements
prior to the acquisition of Sonoma and Key West included herein are those of
Jamestown. The transaction with Key West was accounted for using the purchase
method. The results of operations of Key West and Sonoma have been included in
the consolidated statements of operations from the acquisition dates.

         Jamestown was formed as a limited partnership organized under the laws
of the State of Kentucky by Jamestown Resort & Marina, Inc., the general
partner, on November 1, 1987. It owns a resort and marina facility near
Jamestown, Kentucky on Lake Cumberland.

         Key West was incorporated in the State of Florida on December 23, 1993
for the purposes of acquiring, developing, and operating a marina facility in
Key West, Florida.


NOTE B -- INTERIM INFORMATION

The consolidated interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission (the "SEC"). Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principals ("GAAP") have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.  It is suggested that these financial statements and
notes should be read in conjunction with the consolidated financial statements
and the related notes for the year ended December 31, 1996, filed with the SEC
in 1997.

In the opinion of management, the unaudited interim consolidated financial
statements of the Company contain all adjustments, consisting only of those of
a normal recurring nature, necessary to present fairly the Company's financial
position and the results of its operations and cash flows for the periods
presented. The preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions. Such estimates and
assumptions affect the reported amounts of assets and liabilities, as well as
the disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.


                                       6
<PAGE>   8



Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

        The following is a discussion of the consolidated financial condition 
and results of operations of the Company for the three months and nine months
ended September 30, 1996 and 1997. This discussion should be read in conjunction
with the consolidated financial statements of the Company. In addition, this
discussion contains forward-looking statements. Such statements reflect the
current views of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions, including, but not limited to, the
risk factors described in Amendment No. 3 to its Form SB-2. Should one or more
of these risks or uncertainties materialize, or should the underlying
assumptions prove to be incorrect, actual results may vary materially from those
described herein.

Overview

         Although the Company was formed in 1940, it has not had material
operations since 1988. Between 1988 and 1994 the Company's directors
restructured the Company with the purpose of making the Company attractive to
potential merger or acquisition candidates. In 1994 the Company began in earnest
to search for acquisition or merger candidates which would restore Sonoma to an
operating entity and in September 1996 entered into an agreement with the
general partner of Jamestown Resort & Marina, Ltd. to acquire all the capital
stock of Jamestown Resort & Marina, Inc. and a similar agreement with the
limited partners to acquire all of the limited partnership units in return for
Common Stock. The Company also entered into a similar agreement with
stockholders of Key West Conch Harbor, Inc. in October 1996 to acquire all of
the outstanding common stock of Key West in return for Common Stock. Both the
Jamestown and Key West acquisition transactions were closed on December 9, 1996.

         For accounting purposes, as the Jamestown Limited Partners and its
General Partner end up with the majority of Sonoma's stock, the acquisition by
Sonoma of all of the limited partnership interests and general partnership
interest was accounted for as a recapitalization of Jamestown with Jamestown as
the acquirer (a reverse acquisition). Accordingly, the financial statements
prior to the acquisition of Sonoma and Key West included herein are those of
Jamestown. The transaction with Key West was accounted for using the purchase
method. The results of operations of Key West and Sonoma have been included in
the consolidated statements of operations from the acquisition dates.

         THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE THREE MONTHS 
ENDED SEPTEMBER 30, 1997

Revenues

         Revenues for the three months ended September 30, 1997 increased 
$537,348 or 25% from the same period in 1996. On December 9, 1996, Sonoma
acquired Key West and accordingly revenues for the three months ended September
30, 1996 do not include Key West operations which total $526,037 in 1997. If Key
West revenue is excluded, Jamestown revenues increased for the three months
ended September 30, 1997 over 1996 by $11,311.


                                       7
<PAGE>   9

Cost of Revenues

         During the three months ended September 30, 1997, cost of revenues 
increased $44,634 (excluding the Key West costs of revenues of $350,215).
Excluding the effect of Key West, the increase in cost of revenues was 5%. The
primary reason for the increase in 1996 cost of revenues was higher fuel and
restaurant costs. Cost of revenues as a percentage of revenues increased from 
39% for the three months ended September 30, 1996 to 46% compared to the same
period in 1997. The increase is primarily the result of higher fuel costs 
related to revenues at the Key West facility.

Selling, General and Administrative

         Selling, general and administrative expenses increased $17,378 or 4%
over 1996 to $445,644. Included in this increase is $58,648 attributed to Key
West operations for three months ended September 30, 1997. The remaining
increase was attributed to costs at the corporate level which was offset by 
decreases in other administrative costs at Jamestown.

Interest Expense

         Interest expense increased from $268,425 for the three months ended
September 30, 1996 to $342,086 for the three months ended September 30, 1997.
The increase of $73,661 was due to an increase of $80,456 related to debt
assumed as a result of the Key West acquisition.

DEPRECIATION AND AMORTIZATION

         Depreciation and amortization expenses increased $20,157 or 14% to
$159,523 for the comparable three months from 1996 to 1997. Included in this
increase are Key West depreciation and amortization expenses of $42,527. The 
increase was partially offset by a decrease in depreciation of fixed assets
of Jamestown which are fully depreciated.

             NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE
                      NINE MONTHS ENDED SEPTEMBER 30, 1997

Revenues

         Revenues for the nine months ended September 30, 1997 increased 
$1,652,121 or 47% from the same period in 1996. On December 9, 1996, Sonoma
acquired Key West and accordingly revenues for the nine months ended September
30, 1996 do not include Key West operations which total $1,641,491 in 1997. If
Key West revenue is excluded, Jamestown revenues remained consistent for the
nine months ended September 30, 1997 compared to the same period in 1996.

         Slip rental fee rates increased by 7% for the 1997 calendar year at
Jamestown. Additional revenues are expected in 1997 due to a change in
management's marketing strategy by focusing on attracting tour groups and
conventions during the off boating season. The largest impact of this marketing
focus will be to increase lodging rentals.

Cost of Revenues

         During the nine months ended September 30, 1997, cost of revenues 
decreased $4,499 (excluding the Key West costs of revenues of $955,325). Cost
of revenues as a percentage of revenues increased from 42% for the nine months
ended September 30, 1996 to 47% compared to the same period in 1997. The
increase is primarily as a result of higher fuel costs related to revenues at
the Key West facility.

                                       8
<PAGE>   10

Selling, General and Administrative

         Selling, general and administrative expenses increased $177,909 or
18% over 1996 to $1,173,055. Included in this increase are $235,141 attributed
to Key West operations for nine months ended September 30, 1997.

Interest Expense

         Interest expense increased from $736,738 for the nine months ended 
September 30, 1996 to $993,242 for the nine months ended September 30, 1997. 
The increase of $256,594 was due to an increase of $243,718 related to debt 
assumed as a result of the Key West acquisition. Interest expense is expected
to decrease to approximately $915,000 (on an annual basis) in 1997 after paying
off approximately $5,168,000 of debt with the proceeds from the Offering.

Gain on Reduction of Obligations

         In January 1996 the Company refinanced its primary debt resulting in
an extraordinary gain of $2,518,486 (net of income taxes of zero).

Depreciation and Amortization

         Depreciation and amortization expenses increased $143,052 or 38% to
$523,886 for the comparable nine months from 1996 to 1997. This increase was
primarily due to an increase in the amortization of deferred costs related to
the loan refinancing in January, 1996. The increase was partially offset by a
decrease in depreciation of fixed assets which are fully depreciated.

Liquidity and Capital Resources

         The Company refinanced Jamestown's primary debt in January 1996 which
resulted in a reduction of indebtedness of approximately $2,518,000. The Company
believes this reduction and related decrease in interest payments has increased
cash available for operations and debt servicing.

         Negative working capital at December 31, 1996 was $5,721,567 as
compared to negative working capital at September 30, 1997 of $5,961,157.
The Company believes that the net proceeds from the Offering will provide
$14,700,000 in funds. Of these proceeds, approximately $3,885,000 and
$1,007,000 will reduce the secondary debt of Jamestown and Key West, 
respectively. This will result in an increase of working capital of
approximately $14,012,000. The reduction of this debt will further decrease
interest payments and will increase cash available for operations. The
remaining funds will be used to satisfy the Company's capital expansion,
working capital requirements and future acquisitions. The Company believes that
the net proceeds from the Offering and cash provided by operating activities
will be sufficient to fund its operations through 1998. During early 1997, the
construction of additional slips and other minor dock improvements were
completed by Key West.

         The Company has a mortgage note amounting to $6,135,000 at September
30, 1997 on the Jamestown property with an interest rate of 4 1/4% over the
commercial paper lending rate. The mortgage matures on February 1, 2001 and
requires monthly payments of approximately $72,000 until maturity. These
payments include $8,000 per month for deposit into a property tax and capital
improvement escrow account. The Company has a mortgage note amounting to
$3,219,000 on the Key West property with an interest rate of 9%. The mortgage
matures on April 1, 2016 and requires monthly payments of approximately $30,000
during 1997. The Company has a note payable of $1,852,777 with a related party
with an interest rate of 1 1/2% over the prime lending rate, which is due on
demand, and is expected to be paid off from the offering proceeds.


                                       9
<PAGE>   11

         The Company currently does not have a line of credit.

         Cash flows provided by operating activities were $363,407 in 1996,
compared to cash flow provided by operations of $438,686 in 1997. This increase
was due to a number of factors, but was significantly affected by deferral of
payment of accrued interest and other liabilities. Cash used in investing
activities of $144,263 in 1996 and $260,490 in 1997 was primarily to purchase
property and equipment and for facility expansion. The increase in 1997 was
primarily due to expansion of the Key West facility. Cash used by financing
activities was $215,409 in 1996 and $264,438 in 1997. During the nine month
ended September 30, 1996, the Company borrowed $7,897,626 from and repaid
$7,169,482 to various entities. Repayments to affiliates during the nine month
period ended September 30, 1996 amounted to $490,000. Included in the 
$7,897,626 and $7,169,482 was a refinancing amount totaling $6,300,000 related 
to the Jamestown debt refinancing in January 1996. In addition, the Company 
repaid $616,029 of obligations under capital leases and paid $327,524 in 
refinancing costs. During 1997, the Company borrowed $455,115 from and repaid 
$403,965 to various other entities. The Company also paid financing and related 
fees of $315,588.

         Management believes that the current facilities at Jamestown and Key 
West are in excellent condition and will not require substantial capital 
renovations in the near term.

         The Company has identified some potential acquisition candidates but
has not entered into any negotiations, nor does it currently have plans to make
any specific acquisitions. It is the intention of management to seek viable
acquisitions and in the event a candidate is identified, the Company would,
depending on the size of the target company and other factors, consider using
the proceeds from the Offering or bank borrowings.

         There can be no assurance that the Offering will be successful or that
the Company's operations will ever be profitable, nor can there be any assurance
that the Company will not require additional equity or debt financing in the
near future, and if needed, it will be available on terms satisfactory to the
Company or at all.

Seasonality

         Jamestown's business is seasonal in nature with the peak boating season
falling in June, July and August. These months historically have accounted for
approximately 57.5% of the yearly revenue. The impact on liquidity and capital
resources of this seasonality is reduced by incentives offered to slip customers
to pre-pay their annual fees during the fall and winter seasons when the suites,
cabins and pontoon boats are not materially used. In addition, management
believes the seasonal nature of Jamestown will be positively impacted by the
increased marketing efforts to provide off season tours and conventions.

         Key West operations are impacted slightly by seasonality since boating
activity increases during the winter months due to winter vacations. However,
the majority of the business is commercial fuel sales which is not seasonal.


                                       10
<PAGE>   12
 
                                    PART II
 
                               OTHER INFORMATION
 
ITEM 5. OTHER INFORMATION.
 
     The Company filed a registration with the Commission on Form SB-2 on
January 21, 1997. The Company continues to be involved in the registration
process and filed Amendment No. 2 to its Form SB-2 on April 17, 1997. The
Company recently filed Amendment No. 3 to its Form SB-2 on May 16, 1997. Sonoma
International's Amendment No. 3 to Form SB-2 as filed on May 16, 1997 is
incorporated by reference herein.
 
     In late July 1997 Sonoma's Chief Executive Officer and President, James L.
Frye resigned to take a new position with an unrelated third party business
entity. R. Dudley Webb, Chairman of the Board, will assume the duties of Chief
Executive Officer until such time as a successor to Mr. Frye is elected by
Sonoma's Board of Directors.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
A. Exhibits
   27 Financial Data Schedule filed herein
 
B. Form 8-K
   No reports on Form 8-K were filed in the quarterly period covered by this
   report.
 
                                    SIGNATURES
 
     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
                                            Sonoma International
 
Dated: November 19, 1997                    By       /s/ R. DUDLEY WEBB
                                             -----------------------------------
                                                       R. Dudley Webb,
                                                   Chief Executive Officer
 
Dated: November 19, 1997                      By       /s/ PETER SACKMANN
                                             -----------------------------------
                                                       Peter Sackmann,
                                                   Chief Financial Officer


                                    11
<PAGE>   13
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
         27              -- Financial Data Schedule
</TABLE>