<PAGE>   1
                       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 MARCH 31, 2000

                                       OR

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

                FOR THE TRANSITION PERIOD FROM _________ TO _____

                        COMMISSION FILE NUMBER 000-25147

                             INTERNET AMERICA, INC.
             (Exact name of registrant as specified in its charter)

           TEXAS                                             86-0778979
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification Number)

350 N. ST. PAUL, SUITE 3000, DALLAS, TX                         75201
(Address of principal executive offices)                      (Zip Code)

Issuer's telephone number, including area code: (214) 861-2500

      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 [ ]

     State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                           OUTSTANDING AT MAY 9, 2000

                           --------------------------

         Common Stock at $.01 par value      9,704,632 Shares

                           --------------------------

            Transitional Small Business Disclosure Format (check one)

                                 Yes [ ] No [x]


<PAGE>   2

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                     INTERNET AMERICA, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          March 31,         June 30,
                                                                            2000              1999
                                                                        ------------      ------------
                                     ASSETS                             (Unaudited)
<S>                                                                     <C>               <C>
CURRENT ASSETS:
       Cash and cash equivalents                                        $  1,427,249      $  5,845,562
       Accounts receivable, net                                            1,886,539         1,122,894
       Prepaid expenses and other current assets                             237,794           126,433
                                                                        ------------      ------------
              Total current assets                                         3,551,582         7,094,889

PROPERTY AND EQUIPMENT, net                                                2,807,610         2,622,637

INTANGIBLES, net                                                          36,241,375         8,978,384

OTHER                                                                        296,748           217,494
                                                                        ------------      ------------

                                                                        $ 42,897,315      $ 18,913,404
                                                                        ============      ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
       Trade accounts payable                                           $  2,327,117      $  2,131,201
       Accrued liabilities                                                 1,777,273         1,068,774
       Deferred revenue                                                    4,877,452         3,358,347
       Current maturities of capital lease obligations                       155,968            41,195
       Current maturities of long-term debt                                  107,091           434,934
                                                                        ------------      ------------
              Total current liabilities                                    9,244,901         7,034,451

CAPITAL LEASE OBLIGATIONS, net of current portion                            217,352           102,246

LONG-TERM DEBT, net of current portion                                       203,609           151,997
                                                                        ------------      ------------
              Total liabilities                                            9,665,862         7,288,694
                                                                        ------------      ------------

SHAREHOLDERS' EQUITY:
       Common stock, $.01 par value; 40,000,000 shares authorized,
              9,662,659 and 6,912,930  issued and outstanding at
              March 31, 2000, and June 30, 1999, respectively                 96,622            69,130
       Additional paid-in capital                                         54,656,646        24,231,065
       Accumulated deficit                                               (21,521,815)      (12,675,485)
                                                                        ------------      ------------
              Total shareholders' equity                                  33,231,453        11,624,710
                                                                        ------------      ------------

                                                                        $ 42,897,315      $ 18,913,404
                                                                        ============      ============
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                       2
<PAGE>   3

Financial Statements - Continued

                     INTERNET AMERICA, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended                  Nine Months Ended
                                                    March 31,                          March 31,
                                         ------------------------------      ------------------------------
                                             2000              1999              2000              1999
                                         ------------      ------------      ------------      ------------
<S>                                      <C>               <C>               <C>               <C>
REVENUES:
       Access                            $  6,616,757      $  4,221,499      $ 16,516,438      $ 11,435,757
       Business services                    2,139,195           499,848         4,246,144         1,620,498
       Other                                   88,771            34,931           386,319            79,773
                                         ------------      ------------      ------------      ------------
          Total                             8,844,723         4,756,278        21,148,901        13,136,028
                                         ------------      ------------      ------------      ------------

OPERATING COSTS AND EXPENSES:
       Connectivity and operations          4,984,488         2,036,262        12,066,933         6,283,527
       Sales and marketing                  1,485,757         2,140,563         4,531,148         4,203,665
       General and administrative           2,331,306         1,057,182         5,515,499         2,824,363
       Depreciation and amortization        4,037,397           427,705         7,926,558         1,405,340
                                         ------------      ------------      ------------      ------------
          Total                            12,838,948         5,661,712        30,040,138        14,716,895
                                         ------------      ------------      ------------      ------------

OPERATING LOSS                             (3,994,225)         (905,434)       (8,891,237)       (1,580,867)
INTEREST INCOME (EXPENSE), NET                 (4,990)          196,596            44,907            25,682
INCOME TAX EXPENSE                                 --                --                --           (10,000)
                                         ------------      ------------      ------------      ------------

NET LOSS                                 $ (3,999,215)     $   (708,838)     $ (8,846,330)     $ (1,565,185)
                                         ============      ============      ============      ============

NET LOSS PER COMMON
SHARE:

       BASIC                             $      (0.41)     $      (0.10)     $      (1.07)     $      (0.31)
                                         ============      ============      ============      ============

       DILUTED                           $      (0.41)     $      (0.10)     $      (1.07)     $      (0.31)
                                         ============      ============      ============      ============

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:

       BASIC                                9,641,590         6,762,294         8,260,053         5,081,299

       DILUTED                              9,641,590         6,762,294         8,260,053         5,081,299
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>   4

Financial Statements - Continued

                     INTERNET AMERICA, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                      March 31,
                                                                            ------------------------------
                                                                                2000              1999
                                                                            ------------      ------------
<S>                                                                         <C>               <C>
OPERATING ACTIVITIES:
     Net loss                                                               $ (8,846,330)     $ (1,565,185)
     Adjustments to reconcile net loss to net cash used in
     operating activities:
         Depreciation and amortization                                         7,926,558         1,405,340
         Changes in operating assets and liabilities (excluding amounts
         obtained in acquisitions):
             Accounts receivable                                                (512,113)         (286,682)
             Prepaid expenses and other current assets                            52,758           (89,330)
             Other assets                                                       (160,555)         (139,085)
             Accounts payable and accrued liabilities                         (1,379,425)          272,719
             Deferred revenue                                                   (171,946)          395,442
                                                                            ------------      ------------
                  Net cash used in operating activities                       (3,091,053)           (6,781)
                                                                            ------------      ------------

INVESTING ACTIVITIES:
     Purchases of property and equipment                                        (634,707)         (912,560)
     Business and subscriber acquisitions, net of cash acquired                 (808,432)               --
                                                                            ------------      ------------
                  Net cash used in investing activities                       (1,443,139)         (912,560)
                                                                            ------------      ------------

FINANCING ACTIVITIES:
     Proceeds from issuance of common equity                                     569,954        20,450,844
     Principal payments of notes payable to shareholders                              --        (1,456,539)
     Principal payments of capital lease obligations                             (77,674)       (1,257,750)
     Principal payments of long-term debt                                       (376,401)         (549,073)
     Payments on line of credit                                                       --          (225,000)
                                                                            ------------      ------------
                  Net cash provided by financing activities                      115,879        16,962,482
                                                                            ------------      ------------

NET INCREASE (DECREASE) IN CASH                                               (4,418,313)       16,043,141

CASH, BEGINNING OF PERIOD                                                      5,845,562           618,290
                                                                            ------------      ------------

CASH, END OF PERIOD                                                         $  1,427,249      $ 16,661,431
                                                                            ============      ============

SUPPLEMENTAL INFORMATION:
     Cash paid for interest                                                 $     45,339      $    234,733
     Cash paid for income taxes                                             $         --      $     31,500
     Common stock and options issued in acquisition of PDQ.Net              $ 29,872,852      $         --
     Accrued liability recorded for acquisition costs                       $    400,000      $         --
     Contribution of capital in exchange for note payable                   $     10,267      $    311,186
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                       4
<PAGE>   5

                     INTERNET AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.     Basis of Presentation

       Certain information and footnote disclosures normally included in
       financial statements prepared in accordance with generally accepted
       accounting principles have been condensed or omitted pursuant to Article
       10 of Regulation S-X of the Securities and Exchange Commission. The
       accompanying unaudited condensed financial statements reflect, in the
       opinion of management, all adjustments necessary to achieve a fair
       statement of the Company's financial position and results of operations
       for the interim periods presented. All such adjustments are of a normal
       and recurring nature. These condensed financial statements should be read
       in conjunction with the financial statements for the year ended June 30,
       1999, included in the Company's Annual Report on Form 10-KSB (File No
       000-25147).

2.     Earnings Per Share

       There are no adjustments required to be made to net loss for the purpose
       of computing basic and diluted earnings per share ("EPS"). During the
       quarter ended March 31, 2000, options to purchase approximately 1,315,000
       shares of common stock were not included in the computation of diluted
       EPS because the Company incurred a net loss for the period and the effect
       of such instruments is antidilutive. During the quarter ended March 31,
       2000, options to purchase 48,841 shares of common stock were exercised.

3.     Business Combinations

       Each of the following acquisitions has been accounted for using the
       purchase method of accounting, and resulting intangibles are being
       amortized over a three year period.

       On June 30, 1999, the Company acquired all the outstanding common stock
       of NeoSoft, Inc. ("NeoSoft"), an ISP in Houston, Texas, for $8.1 million.
       Assets of NeoSoft include approximately 9,500 individual and corporate
       Internet access accounts, including customer support and network
       operations facilities in Houston and New Orleans. Intangibles acquired as
       a result of the acquisition aggregated approximately $8.8 million.

       On July 26, 1999, the Company acquired the subscribers of King Dinosaur,
       Inc. d/b/a KDI Internet Solutions, a Texas corporation ("KDi"). Under the
       terms of an Asset Purchase Agreement, we paid a total of $259,250 based
       on the actual number of KDi subscribers that transitioned to Internet
       America's service.

       On July 28, 1999, the Company acquired the subscribers of INTX
       Networking, L.L.C., a Texas limited liability company ("INTX"), under
       the terms of an Asset Purchase Agreement. According to the agreement, we
       agreed to pay up to $380,600 in cash, half of which was paid upon
       closing. The remaining payment was contingent on the actual number of
       INTX subscribers that transitioned to Internet America's service by
       January 24, 2000. We do not expect to make any further payments under
       the agreement.

       On August 9, 1999, the Company acquired the Texas dial-up subscribers of
       Pointe Communications Corporation, Inc., a Nevada corporation
       ("PointeCom"). Under the terms of an Asset Purchase Agreement, we made
       an initial payment of $1,000,000 in cash. The remaining payment of
       $1,000,000 was contingent on the actual number of PointeCom customers
       that transitioned to Internet America's service. In January 2000, the
       Company received a refund of $750,000 based on the actual number of
       Pointecom subscribers that transitioned to Internet America's service.

       On November 22, 1999, the Company acquired all of the outstanding shares
       of PDQ.Net, Inc. ("PDQ.Net"), a Houston-based ISP, in exchange for
       2,425,000 shares of the Company's common stock. The Company also issued
       options to purchase 352,917 shares of the Company's common stock with a
       weighted average exercise price of $1.62 per share in replacement of all
       of the outstanding stock options of PDQ.Net. The total value of the stock
       and options exchanged by the Company was approximately $29.9 million,
       excluding closing costs, based on the November 22, 1999 closing price of
       the Company's stock, adjusted to reflect restrictions on the transfer of
       certain shares. Goodwill arising from the transaction aggregates
       approximately $32.8 million and is being amortized using the
       straight-line method over a period of 36 months commencing November 22,
       1999.



                                       5
<PAGE>   6

ITEM 2-

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These statements, identified by words such as "anticipate," "believe,"
"estimate," "should," "expect" and similar expressions, include our expectations
and objectives regarding our future financial position, operating results and
business strategy. These statements reflect the current views of management with
respect to future events and are subject to risks, uncertainties and other
factors that may cause our actual results, performance or achievements, or
industry results, to be materially different from those described in the
forward-looking statements. We do not intend to update the forward-looking
information to reflect actual results or changes in the factors affecting such
forward-looking information. Our Registration Statement on Form SB-2, initially
filed with the Securities and Exchange Commission on January 21, 2000, discusses
some additional important risk factors that could cause our actual results to
differ materially from those in such forward-looking statements.

OVERVIEW

      Internet America is an Internet service provider ("ISP") that provides a
wide array of Internet services tailored to meet the needs of individual and
business subscribers. We afford our subscribers a high quality Internet
experience with fast, reliable service and responsive customer care. As of March
31, 2000, we served approximately 153,000 subscribers in the southwestern United
States.

      The rapid growth of the Internet has resulted in increased competition for
existing services and increased demand for new products and services. Increases
in demand and a surge in Internet users have fostered an increase in the number
of ISPs providing access to the Internet. Our competitors have begun to
advertise in our existing markets with aggressive new promotions or offers of
free Internet access. We believe we are well positioned to deal with these
competitive forces by continuing to build high user density and maintaining a
rational business plan.

      Rapid growth and high user density are the cornerstones of our business
strategy. We will continue to pursue an ambitious growth strategy, but in a
controlled manner. Our goal is to rapidly create high user density in specific
markets to achieve and maintain positive EBITDA (Earnings Before Interest,
Taxes, Depreciation, and Amortization).

      Recent technological developments have allowed for the propagation of
broadband, a transmission medium that can carry numerous voice, video, and data
channels simultaneously. The emergence of low-cost broadband solutions will
significantly impact the ability of many ISPs to compete. We are committed to
being a leader in offering broadband solutions to individuals and businesses.
High-speed connectivity is essential to the commercially viable deployment of
new, value-added services such as Internet telephony, particularly Voice Over
Internet Protocol (VoIP), video and audio programming distribution and other
high bandwidth applications. We believe we are well positioned to efficiently
market and deploy our DSL products due to the high density of our subscriber
base.

      Given the increased level of competition in the industry for new
subscribers, we will be more selective with regard to investing in direct
response advertising. We plan to concentrate our direct response advertising
more heavily in markets where we have established branding than in new markets.
We have found that the most effective way to initially penetrate new markets is
through an aggressive acquisition strategy. Management believes the level of
consolidation in the industry will escalate, and a viable acquisition strategy
is the most efficient way to rapidly build market share.

      We expect our total sales and marketing expenses to remain relatively
stable as a percentage of total revenue. However, we anticipate a lower cost of
adding new subscribers by using a market development fund provided by a
telecommunications company with which we have partnered to deliver DSL.



                                       6
<PAGE>   7
      The execution of our acquisition strategy has increased our amortization
expense as the costs of purchasing the subscriber bases are written off. In the
coming quarters we expect to report net losses, primarily due to amortization
expense, while generating positive EBITDA. There can be no assurance we will be
able to achieve or sustain positive EBITDA or net income in the future.

      We expect general and administrative expenses to increase to support our
growth. Connectivity costs will increase after acquisitions, since there is some
duplication of inbound telephone connectivity and Internet connectivity during
the transition period. However, we believe we can quickly transition even
sizable acquisitions and realize connectivity and networking economies of scale
within two quarters of an acquisition.

      We have an accumulated deficit of $21.5 million at March 31, 2000 and have
had annual operating losses since inception as a result of building network
infrastructure and rapidly increasing market share.


STATEMENT OF OPERATIONS

      Access revenues are derived primarily from individual Internet access,
whether dial-up, ISDN, or DSL and value-added services, such as multiple e-mail
boxes and personalized e-mail addresses. Business services revenues are derived
primarily from dedicated connectivity, bulk dial-up access and Web services.

      A brief description of each element of our operating expenses follows:

            Connectivity and operations expenses consist primarily of setup
      costs for new subscribers, telecommunications costs, and wages of network
      operations and customer support personnel. Connectivity costs include (i)
      fees paid to telecommunications companies for subscribers' connections to
      our network and (ii) fees paid to backbone providers for connections from
      our network to the Internet.

            Sales and marketing expenses consist primarily of creative and
      production costs, costs of media placement, management salaries and call
      center wages. Advertising costs are expensed as incurred.

            General and administrative expenses consist primarily of
      administrative salaries, professional services, rent and other general
      business expenses.

            Depreciation is computed using the straight line method over the
      estimated useful lives of the assets. Data communications equipment,
      computers, data servers and office equipment are depreciated over three
      years. We depreciate furniture, fixtures and leasehold improvements over
      five years. Purchased subscriber bases are amortized over three years. The
      assets and liabilities acquired in business combinations are recorded at
      estimated fair values. The excess of the cost of the net assets acquired
      over their fair value is recorded as goodwill and amortized over an
      estimated life of three years. Depreciation and amortization will increase
      substantially during fiscal 2000 due to the acquisition of PDQ.Net, Inc.
      and other recent acquisitions.

      Our business is not subject to any significant seasonal influences.



                                       7
<PAGE>   8

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

      The following table sets forth certain unaudited financial data for the
three months ended March 31, 2000 and 1999. Operating results for any period are
not indicative of results for any future period. Dollar amounts are shown in
thousands (except per share data and subscriber count).

<TABLE>
<CAPTION>
                                              Three Months Ended               Three Months Ended
                                                March 31, 2000                   March 31, 1999
                                          --------------------------        --------------------------
                                                             % of                              % of
                                            (000's)        Revenues          (000's)         Revenues
                                          ----------      ----------        ----------      ----------
<S>                                       <C>             <C>               <C>             <C>
STATEMENT OF OPERATIONS DATA:

REVENUES:
       Access                             $    6,617            74.8%       $    4,221            88.8%
       Business services                       2,139            24.2%              500            10.5%
       Other                                      89             1.0%               35             0.7%
                                          ----------      ----------        ----------      ----------
              Total                            8,845           100.0%            4,756           100.0%
                                          ----------      ----------        ----------      ----------

OPERATING COSTS AND EXPENSES:
       Connectivity and operations             4,985            56.4%            2,036            42.8%
       Sales and marketing                     1,486            16.8%            2,141            45.0%
       General and administrative              2,331            26.3%            1,057            22.2%
       Depreciation and amortization           4,037            45.6%              428             9.0%
                                          ----------      ----------        ----------      ----------
              Total                           12,839           145.1%            5,662           119.0%
                                          ----------      ----------        ----------      ----------

LOSS FROM OPERATIONS                          (3,994)          (45.1)%            (906)          (19.0)%
INTEREST INCOME (EXPENSE), NET                    (5)           (0.1)%             197             4.1%
INCOME TAX EXPENSE                                --             0.0%               --             0.0%
                                          ----------      ----------        ----------      ----------

NET LOSS                                  $   (3,999)          (45.2)%      $     (709)          (14.9)%
                                          ==========      ==========        ==========      ==========

NET LOSS PER COMMON SHARE:

       BASIC                              $    (0.41)                       $   (0.10)
                                          ==========                        =========

       DILUTED                            $    (0.41)                       $   (0.10)
                                          ==========                        =========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:

       BASIC                                   9,642                            6,762

       DILUTED                                 9,642                            6,762

OTHER DATA:
Subscribers at end of period                 153,000                           79,000
</TABLE>


                                       8
<PAGE>   9


      Total revenue. Total revenue increased by $4.0 million, or 86.0%, to $8.8
million for the three months ended March 31, 2000, from $4.8 million for the
three months ended March 31, 1999. The majority of the increase in total revenue
is attributable to the increase in access revenue of $2.4 million, or 56.7%, to
$6.6 million for the three months ended March 31, 2000, from $4.2 million for
the same period in 1999. Approximately $2.2 million of the increase in access
revenue is attributable to the acquisition of PDQ.Net. The remaining $200,000
increase in access revenue is attributable to a 25,000 increase in the number of
subscribers from other acquisitions and organic growth. Business services
revenue increased from $500,000 for the three months ended March 31, 1999 to
$2.1 million for the same period in 2000. The increase in business services
revenue is primarily due to the acquisitions of NeoSoft, Inc. (NeoSoft) and
PDQ.Net. Other revenue consists primarily of peripheral equipment sales,
advertising income generated from our web page, and other miscellaneous revenue.

      Connectivity and operations. Connectivity and operations expense increased
by $3.0 million, or 144.8%, to $5.0 million for the three months ended March 31,
2000 from $2.0 million for the three months ended March 31, 1999. As a
percentage of revenue, connectivity and operations expense increased to 56.4%
for the three months ended March 31, 2000, from 42.8% for the same period in
1999. The increase as a percentage of revenue is due primarily to additional
connectivity related to our entry into new markets and the development of our
DSL products.

      Sales and marketing. Sales and marketing expense decreased by $655,000, or
30.6%, to $1.5 million for the three months ended March 31, 2000, compared to
$2.1 million for the same period in 1999. Sales and marketing expense decreased
as a percentage of revenue to 16.8% for the three months ended March 31, 2000
from 45.0% for the same period in 1999. This decrease is due to restricting
advertising efforts to markets with established branding and utilizing a market
development fund provided by our primary DSL service provider.

      General and administrative. General and administrative expense increased
by $1.2 million, or 120.5%, to $2.3 million for the three months ended March 31,
2000, from $1.1 million for the three months ended March 31, 1999. General and
administrative expense for the three months ended March 31, 2000 included
$422,000 of nonrecurring bad debt expense related primarily to the CyberRamp and
PointeCom acquisitions. The Company terminated its efforts to integrate these
customers after exhaustive efforts were taken over several quarters to
transition them to Internet America services. General and administrative expense
as a percentage of total revenue increased to 26.3% for the three months ended
March 31, 2000, from 22.2% for the same period in 1999, primarily due to
administrative support related to our growth strategy.

      Depreciation and amortization. Depreciation and amortization increased by
$3.6 million, to $4.0 million for the three months ended March 31, 2000, from
$428,000 for the same period in 1999. The increase is due to the amortization of
recently acquired subscriber bases and goodwill, along with additional
depreciation expense related to routine upgrades of our network facilities.
Approximately $3.5 million of the total increase in depreciation and
amortization relates to amortization of goodwill arising from the PDQ.Net and
NeoSoft acquisitions.

      Interest income and expense. We incurred $5,000 of interest expense during
the three months ended March 31, 2000, compared to interest income of $197,000
for the same period in 1999. The interest income in 1999 resulted from the
temporary investment of the proceeds of our initial public offering.



                                       9
<PAGE>   10

NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO NINE MONTHS ENDED MARCH 31, 1999

      The following table sets forth certain unaudited financial data for the
nine months ended March 31, 2000 and 1999. Operating results for any period are
not indicative of results for any future period. Dollar amounts are shown in
thousands (except per share data and subscriber count).

<TABLE>
<CAPTION>
                                               Nine Months Ended               Nine Months Ended
                                                March 31, 2000                   March 31, 1999
                                          --------------------------        --------------------------
                                                             % of                             % of
                                           (000's)         Revenues          (000's)         Revenues
                                          ----------      ----------        ----------      ----------
<S>                                       <C>             <C>               <C>             <C>
STATEMENT OF OPERATIONS DATA:

REVENUES:
       Access                             $   16,517            78.1%       $   11,436            87.1%
       Business services                       4,246            20.1%            1,620            12.3%
       Other                                     386             1.8%               80             0.6%
                                          ----------      ----------        ----------      ----------
              Total                           21,149           100.0%           13,136           100.0%
                                          ----------      ----------        ----------      ----------

OPERATING COSTS AND EXPENSES:
       Connectivity and operations            12,067            57.0%            6,284            47.8%
       Sales and marketing                     4,531            21.4%            4,204            32.0%
       General and administrative              5,515            26.1%            2,824            21.5%
       Depreciation and amortization           7,927            37.5%            1,405            10.7%
                                          ----------      ----------        ----------      ----------
              Total                           30,040           142.0%           14,717           112.0%
                                          ----------      ----------        ----------      ----------

LOSS FROM OPERATIONS                          (8,891)          (42.0)%          (1,581)          (12.0)%
INTEREST INCOME (EXPENSE), NET                    45             0.2%               26             0.2%
INCOME TAX EXPENSE                                --             0.0%              (10)           (0.1)%
                                          ----------      ----------        ----------      ----------

NET LOSS                                  $   (8,846)          (41.8)%      $   (1,565)          (11.9)%
                                          ==========      ==========        ==========      ==========

NET LOSS PER COMMON SHARE:

       BASIC                              $    (1.07)                       $    (0.31)
                                          ==========                        ==========

       DILUTED                            $    (1.07)                       $    (0.31)
                                          ==========                        ==========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:

       BASIC                                   8,260                             5,081

       DILUTED                                 8,260                             5,081

OTHER DATA:
Subscribers at end of period                 153,000                            79,000
</TABLE>

      Total revenue. Total revenue increased by $8.0 million, or 61.0%, to $21.1
million for the nine months ended March 31, 2000, from $13.1 million for the
nine months ended March 31, 1999. The majority of the increase in total revenue
is attributable to the increase in access revenue of $5.1 million, or 44.4%, to
$16.5 million for the nine months ended March 31, 2000, from $11.4 million for
the same period in 1999. Approximately $3.8 million of the increase in access
revenue is attributable to the acquisitions of PDQ.Net and NeoSoft, while the
remainder is attributable to other growth of our customer base. Business
services revenue increased by $2.6 million, or 162.0%, to $4.2 million for the
nine months ended March 31, 2000, from $1.6 million for the same period in 1999,
primarily as a result of the PDQ.Net and NeoSoft acquisitions.



                                       10
<PAGE>   11

      Connectivity and operations. Connectivity and operations expense increased
by $5.8 million, or 92.0%, to $12.1 million for the nine months ended March 31,
2000 from $6.3 million for the nine months ended March 31, 1999. As a percentage
of revenue, connectivity and operations expense increased to 57.0% for the nine
months ended March 31, 2000, from 47.8% for the same period in 1999. The
increase as a percentage of revenue is due primarily to additional connectivity
purchases related to our entry into new markets and the development of our DSL
products.

      Sales and marketing. Sales and marketing expense increased by $327,000, or
7.8%, to $4.5 million for the nine months ended March 31, 2000, compared to $4.2
million for the same period in 1999. Sales and marketing expense decreased as a
percentage of revenue to 21.4% for the nine months ended March 31, 2000 from
32.0% for the same period in 1999. The dollar increase is due primarily to the
expansion of our marketing program which, until December 1998, was limited to
North Texas. The reduction as a percentage of revenue for the nine months ended
March 31, 2000 is due to restricting advertising to markets with established
branding and utilizing a market development fund provided by our primary DSL
service provider.

      General and administrative. General and administrative expense increased
by $2.7 million, or 95.3%, to $5.5 million for the nine months ended March 31,
2000, from $2.8 million for the nine months ended March 31, 1999. General and
administrative expense as a percentage of total revenue increased to 26.1% for
the nine months ended March 31, 2000, from 21.5% for the same period in 1999,
primarily due to administrative support related to our growth strategy.

      Depreciation and amortization. Depreciation and amortization increased by
$6.5 million to $7.9 million for the nine months ended March 31, 2000, from $1.4
million for the same period in 1999. Approximately $6.1 million of the increase
relates to amortization of goodwill arising from the acquisitions of PDQ.Net and
NeoSoft.

      Interest income and expense. We realized $45,000 of interest income during
the nine months ended March 31, 2000, compared to $26,000 for the same period in
1999.

LIQUIDITY AND CAPITAL RESOURCES

      We have financed our operations to date primarily through (i) public and
private sales of equity securities, (ii) loans from shareholders and third
parties and (iii) revenue collections. We completed an initial public offering
of our common stock in December 1998 and received net proceeds of approximately
$19.8 million. After the offering, we repaid approximately $2.1 million in
shareholder notes and certain other indebtedness. As of March 31, 2000, cash on
hand totaled $1.4 million.

      Cash used in operating activities totaled $2.7 million for the nine months
ended March 31, 2000, compared to $7,000 for the same period in 1999. During the
nine months ended March 31, 2000, we reduced accounts payable and accrued
liabilities by $1.4 million. In addition, increases in general and
administrative expenses of $2.7 million related to our growth strategy
contributed to cash used in operations for the nine months ended March 31, 2000,
as compared to the same period a year ago.

      Cash used in investing activities totaled $1.8 million for the nine months
ended March 31, 2000, and consisted of $1.2 million in business and subscriber
acquisitions and $635,000 of routine purchases of property and equipment to
expand and upgrade our network.

      Cash provided by financing activities totaled $116,000 for the nine months
ended March 31, 2000 and consisted of proceeds of $570,000 from the exercise of
stock options by option holders less payments of $454,000 to service long-term
obligations.

      We estimate that cash on hand of $1.4 million at March 31, 2000 along with
anticipated revenue collections will be sufficient for meeting our working
capital needs for fiscal 2000 with regard to continuing operations in existing
markets. Additional financing will be required to fund acquisitions or expansion
into new markets.

      We are currently in discussions with various lenders concerning a possible
credit facility, but there can be no assurance that we will enter into any
facility, and if so, on what terms. In addition, we have arranged capital
financing to fund a portion of equipment purchases during this fiscal year which
are estimated to total approximately $1.0 million.



                                       11
<PAGE>   12

      If additional capital financing arrangements, including public or private
sales of debt or equity securities, or additional borrowings from commercial
banks, are insufficient or unavailable, or if we experience shortfalls in
anticipated revenues or increases in anticipated expenses, we will have to
modify our operations and growth strategies to match available funding. In such
case, it is likely that our advertising expenditures would be downscaled to a
level where positive cash flows are generated from operations. We have no long
term advertising commitments, and our scheduled television commercials may be
cancelled with less than two weeks notice.

"SAFE HARBOR" STATEMENT

      The following "Safe Harbor" Statement is made pursuant to the Private
Securities Litigation Reform Act of 1995. Certain of the Statements contained in
the body of this Report are forward-looking statements (rather than historical
facts) that are subject to risks and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. With respect to such forward-looking statements, we seek the
protections afforded by the Private Securities Litigation Reform Act of 1995.
These risks include, without limitation, (1) that we will not retain or grow our
subscriber base, (2) that we will fail to be competitive with existing and new
competitors, (3) that we will not be able to sustain our current growth, (4)
that we will not adequately respond to technological developments impacting the
Internet, and (5) that needed financing will not be available to us if and as
needed. This list is intended to identify certain of the principal factors that
could cause actual results to differ materially from those described in the
forward-looking statements included elsewhere herein. These factors are not
intended to represent a complete list of all risks and uncertainties inherent in
our business, and should be read in conjunction with the more detailed
cautionary statements included in our other publicly filed reports and
documents.



                                       12
<PAGE>   13

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our wholly owned subsidiary, PDQ.Net, and our Vice Chairman, William E. Ladin,
Jr., were named as defendants in a lawsuit filed on April 10, 2000 by Santa Fe
Capital Group, Inc. in the district court of Sante Fe County, New Mexico. The
plaintiff alleges a finders fee was owed to plaintiff in connection with the
Company's acquisition of PDQ.Net. Plaintiff asserts claims for breach of
contract, restitution, fraud and unfair trade practices, and alleges damages in
the amount of $960,000. We believe this lawsuit is without merit and intend to
defend it vigorously.

Internet America, our Chief Executive Officer, Michael T. Maples, and our
Chairman, William O. Hunt were named as defendants in a lawsuit filed on
November 12, 1999 by Cindy Carradine in the District Court of Dallas County,
Texas. The plaintiff asserts claims for fraud in connection with the plaintiff's
sale of options to the Company in 1998. The plaintiff alleges actual and
punitive damages in an unspecified amount. We believe this lawsuit is without
merit and intend to defend it vigorously.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

          3.1  Articles of Incorporation, as amended, incorporated by reference
               to Exhibit Nos. 3.1 and 3.2 on Form SB-2, as amended, initially
               filed with the Securities and Exchange Commission on July 21,
               1998 (File No. 333-59527).

          3.2  By-Laws, as amended, incorporated by reference to Exhibit Nos.
               3.3 and 3.4 of the Company's Registration Statement on Form SB-2,
               as amended, initially filed with the Securities and Exchange
               Commission on July 21, 1998 (File No. 333-59527), and Exhibit No.
               3.3 to the Company's Form 10-QSB filed on November 15, 1999 (File
               No. 000-25147).

          4.1  Specimen Common Stock Certificate, incorporated by reference to
               Exhibit No. 4.1 of the Company's Registration Statement on Form
               SB-2, as amended, initially filed with the Securities and
               Exchange Commission on July 21, 1998 (File No. 333-59527).

          4.2  Pages from the Articles and By-Laws that define the rights of
               holders of Common Stock, incorporated by reference to Exhibit 4.2
               of the Company's Registration Statement on Form SB-2, initially
               filed with the Securities and Exchange Commission on January 21,
               2000 (File No. 333-95179).

          11   Computation of earnings per share (1)

          27   Financial Data Schedule*

          ------------

          *  Filed herewith

          (1)  See note 2 to the financial statements.


         (b) Reports on Form 8-K

                On December 7, 1999, the Company filed a Current Report on Form
           8-K to report the closing of the Agreement and Plan of Merger between
           the Company and PDQ.Net, pursuant to which PDQ.Net became a wholly
           owned subsidiary of the Company. The Form 8-K was subsequently
           amended on January 19, 2000 and January 21, 2000 to include the
           financial statements required by Item 7 of Form 8-K.



                                       13
<PAGE>   14

                                   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.



                                     INTERNET AMERICA, INC.
                                     (Registrant)

Date:  5/15/00                       By: /s/ Michael T. Maples
                                        ----------------------------------------
                                     Michael T. Maples
                                     President and Chief Executive Officer

Date:  5/15/00                       By: /s/ James T. Chaney
                                        ----------------------------------------
                                     James T. Chaney
                                     Vice President and Chief Financial Officer



                                       14
<PAGE>   15

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     Exhibit No.  Description
     -----------  -----------

<S>               <C>
         3.1      Articles of Incorporation, as amended, incorporated by
                  reference to Exhibit Nos. 3.1 and 3.2 on Form SB-2, as
                  amended, initially filed with the Securities and Exchange
                  Commission on July 21, 1998 (File No. 333-59527).

         3.2      By-Laws, as amended, incorporated by reference to Exhibit Nos.
                  3.3 and 3.4 of the Company's Registration Statement on Form
                  SB-2, as amended, initially filed with the Securities and
                  Exchange Commission on July 21, 1998 (File No. 333-59527), and
                  Exhibit No. 3.3 to the Company's Form 10-QSB filed on November
                  15, 1999 (File No. 000-25147).

         4.1      Specimen Common Stock Certificate, incorporated by reference
                  to Exhibit No. 4.1 of the Company's Registration Statement on
                  Form SB-2, as amended, initially filed with the Securities and
                  Exchange Commission on July 21, 1998 (File No. 333-59527).

         4.2      Pages from the Articles and By-Laws that define the rights of
                  holders of Common Stock, incorporated by reference to Exhibit
                  4.2 of the Company's Registration Statement on Form SB-2,
                  initially filed with the Securities and Exchange Commission on
                  January 21, 2000 (File No. 333-95179).

         11       Computation of earnings per share (1)

         27       Financial Data Schedule*
</TABLE>


----------------

           *Filed herewith

           (1) See note 2 to the financial statements.