<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
                                     of 1934


                      For Quarter Ended: SEPTEMBER 30, 2000


                         Commission File Number: 0-26415



                          INTERNATIONAL INTERNET, INC.
        (Exact name of small business issuer as specified in its charter)


        DELAWARE                                                 13-3876100
(State of Incorporation)                                    (IRS Employer ID No)


              6413 CONGRESS AVENUE, SUITE 240, BOCA RATON, FL 33487
                     (Address of principal executive office)


                                 (561) 988-0819
                           (Issuer's telephone number)

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    .


The number of shares outstanding of registrant's common stock, par value $.00001
per share, as of September 30, 2000 was 778,446,187.

Transitional Small Business Disclosure Format (Check one):  Yes     No  X .
<PAGE>   2
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
                                                                                Page
                                                                                No.
                                                                                ---
<S>                                                                            <C>
Part I.       Financial Information

Item 1. Condensed Consolidated:
Balance Sheet - September 30, 2000 and December 31, 1999                           3

Statement of Operations-                                                           4
Three and Nine Months Ended September 30, 2000 and 1999

Statement of Stockholders' Equity -                                                5
Nine Months Ended September 30, 2000

Statements of Cash Flows -                                                       6-7
Nine Months Ended September 30, 2000 and 1999

Notes to Financial Statements -                                                 8-13
Nine Months Ended September 30, 2000 and 1999

Item 2. Managements Discussion and Analysis of Financial Condition             14-16
and Results of Operations

Part II.      Other Information                                                   17
</TABLE>




                                       2
<PAGE>   3
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                      September 30,      December 31,
                                                                                          2000               1999
                                                                                       (Unaudited)
<S>                                                                                   <C>                <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                            $ 3,759,087        $ 2,737,537
  Accounts receivable                                                                       79,696             34,098
  Marketable equity securities                                                           8,922,910            836,294
  Inventory                                                                                700,420             97,934
  Notes receivable                                                                          14,945             26,350
  Prepaid income taxes                                                                     120,605                 --
  Prepaid expenses                                                                          60,704              4,136
  Assets of discontinued operation                                                              --            447,665
                                                                                       -----------        -----------
Total current assets                                                                    13,658,367          4,184,014
Property and equipment, net                                                                721,262             97,209
Marketable equity securities                                                            12,720,000                 --
Investments in partially-owned equity affiliates                                            60,762                 --
Goodwill, less accumulated amortization of $4,383 and $1,917                                44,856             47,323
Other assets                                                                                16,587             10,882
                                                                                       -----------        -----------
                                                                                       $27,221,834        $ 4,339,428
                                                                                       ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable                                                                        $    31,081        $        --
  Accounts payable                                                                         234,769            131,754
  Accrued expenses                                                                           8,861              5,244
  Liabilities of discontinued operation                                                         --            590,110
  Stockholder loans                                                                         16,748             18,000
  Income taxes payable                                                                          --             30,318
  Deferred income taxes                                                                  3,045,308            284,508
                                                                                       -----------        -----------
Total current liabilities                                                                3,336,767          1,059,934
                                                                                       -----------        -----------
Deferred income taxes                                                                    4,535,150              6,650
                                                                                       -----------        -----------

STOCKHOLDERS' EQUITY
  Common stock, $.00001 par value.  Authorized 1,000,000,000 shares; issued and              7,784              7,674
   outstanding 778,446,187 shares and 767,446,187 shares, respectively
  Paid-in capital                                                                        6,659,881          2,658,741
  Retained earnings                                                                         87,656            606,429
  Accumulated other comprehensive income                                                12,594,596                 --
                                                                                       -----------        -----------
Total stockholders' equity                                                              19,349,917          3,272,844
                                                                                       -----------        -----------
                                                                                       $27,221,834        $ 4,339,428
                                                                                       ===========        ===========
</TABLE>

See accompanying notes to consolidated financial statements.




                                       3
<PAGE>   4
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                           SEPTEMBER 30,
                                                           2000                 1999                2000                1999
<S>                                                    <C>                 <C>                 <C>                 <C>
SALES AND REVENUES                                     $     571,233       $     291,045       $   1,692,318       $     512,405

COST OF SALES                                                495,816             198,144           1,374,033             410,605
                                                       -------------       -------------       -------------       -------------

GROSS PROFIT                                                  75,417              92,901             318,285             101,800
                                                       -------------       -------------       -------------       -------------

OTHER INCOME (EXPENSE):
  Selling, general and administrative expense               (642,551)           (760,937)         (1,509,413)         (1,101,179)
  Interest expense                                           (54,500)                 --            (141,018)                 --
  Sale of marketable equity securities                            --             225,613             647,776           3,428,772
  Interest and other income                                  114,993              34,460             273,006              53,218
  Equity in net loss of affiliated company                    (1,664)                 --             (15,530)                 --
  Unrealized gain (loss) on marketable securities           (599,230)         (1,877,148)           (448,072)          1,552,330
                                                       -------------       -------------       -------------       -------------
    Total other income (expense)                          (1,182,952)         (2,378,012)         (1,193,251)          3,933,141
                                                       -------------       -------------       -------------       -------------
EARNINGS (LOSS) BEFORE INCOME TAXES                       (1,107,535)         (2,285,111)           (874,966)          4,034,941

INCOME TAX EXPENSE (BENEFIT)                                (416,100)           (858,968)           (327,100)          1,135,941
                                                       -------------       -------------       -------------       -------------

INCOME (LOSS) FROM CONTINUING OPERATIONS                    (691,435)         (1,426,143)           (547,866)          2,899,000

INCOME FROM DISCONTINUED OPERATIONS                               --                  --              29,093                  --
                                                       -------------       -------------       -------------       -------------

NET EARNINGS (LOSS)                                    $    (691,435)      $  (1,426,143)      $    (518,773)      $   2,899,000
                                                       =============       =============       =============       =============


NET EARNINGS PER SHARE
  BASIC AND DILUTED                                    $      (0.001)      $      (0.002)      $      (0.001)      $       0.004
                                                       =============       =============       =============       =============
  DISCONTINUED OPERATIONS                              $          --       $          --       $       0.000       $          --
                                                       =============       =============       =============       =============

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                                      778,446,187         755,508,233         774,672,464         744,455,591
                                                       =============       =============       =============       =============
</TABLE>


See accompanying notes to consolidated financial statements.



                                        4
<PAGE>   5
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                    Accumulated
                                            Common Stock               Paid-in     Retained        Other Compre-
                                     Shares              Par Value     Capital     Earnings       hensive Income           Total
                                     ------              ---------     -------     --------       --------------           -----
<S>                                <C>                   <C>         <C>          <C>             <C>                  <C>
BALANCE, December 31, 1999         767,446,187            $ 7,674    $2,658,741   $ 606,429                            $ 3,272,844
Sale of common stock for cash       11,000,000                110     4,001,140                                          4,001,250
Comprehensive income:
 Net loss                                                                          (518,773)                              (518,773)
 Other comprehensive income,
  net of tax:
   Unrealized gain on available-
    for-sale securities                                                                             12,594,596          12,594,596

                                   -----------            -------    ----------   ---------        -----------         -----------
BALANCE, September 30, 2000        778,446,187            $ 7,784    $6,659,881   $  87,656        $12,594,596         $19,349,917
                                   ===========            =======    ==========   =========        ===========         ===========
</TABLE>


See accompanying notes to consolidated financial statements.




                                       5
<PAGE>   6
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                      2000              1999
<S>                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss)                                               $  (518,773)      $ 2,899,000
Adjustments to reconcile net earnings to net
 cash provided by (used in) operating activities:
  Depreciation and amortization                                        74,218            28,852
  Gain from discontinued operations                                   (29,093)               --
  Equity in loss of affiliated company                                 15,530                --
  Gain on marketable investment securities                           (647,776)       (3,428,772)
  Unrealized gain (loss) on marketable investment securities          448,072        (1,552,330)
  Proceeds from sale of marketable investment securities              678,566         3,437,400
  Purchase of marketable investment securities                        (23,333)          (20,000)
  Deferred income taxes                                              (309,500)          590,527
  Common stock issued for services                                         --           425,964
  Change in assets and liabilities:
    Accounts receivable                                               (45,597)            6,558
    Inventory                                                        (602,486)         (120,001)
    Other assets                                                      (93,522)               --
    Notes receivable                                                   11,405                --
    Accounts payable                                                  (89,216)           20,841
    Accrued expenses                                                    3,617                --
    Income taxes payable                                              (30,318)          545,414
                                                                  -----------       -----------
Net cash provided by (used in) operating activities                (1,158,206)        2,833,453
                                                                  -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES

  Capital expenditures                                               (693,752)          (67,399)
  Purchase of marketable investment securities                     (1,068,750)          (25,000)
  Acquisition of ACS, net of cash acquired                                              100,594
  Acquisition of subsidiary                                                --           (18,000)
  Proceeds from sale of 80% of ACS                                    500,000                --
  Net advances to discontinued operation                             (497,412)               --
                                                                  -----------       -----------
Net cash used in investing activities                              (1,759,914)           (9,805)
                                                                  -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Sale of common stock for cash                                     4,001,250           384,825
  Loan proceeds                                                     3,651,222                --
  Loan repayment                                                   (3,711,551)               --
  Due to shareholders                                                  (1,252)               --
                                                                  -----------       -----------
Net cash provided by financing activities                           3,939,669           384,825
                                                                  -----------       -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                           1,021,549         3,208,473
CASH AND CASH EQUIVALENTS, beginning of period                      2,737,538           116,965
                                                                  -----------       -----------
CASH AND CASH EQUIVALENTS, end of period                          $ 3,759,087       $ 3,325,438
                                                                  ===========       ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                                                       Continued




                                       6
<PAGE>   7
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
(CONTINUED)

<TABLE>
<CAPTION>
                                                                           2000          1999
<S>                                                                      <C>           <C>
SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for:
  Interest                                                               $141,018      $     --
  Income taxes                                                           $150,923      $     --

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

Insurance financing                                                      $ 91,410      $     --
Common stock issued for subsidiary                                       $     --      $ 31,240
Common stock issued for assets                                           $     --      $ 37,604
</TABLE>


See accompanying notes to consolidated financial statements.




                                       7
<PAGE>   8
INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)

A        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         International Internet, Inc. (the "Company" or "IINN"), is a
         diversified holding company that develops and operates Internet and
         direct retail marketing companies and computer service providers on the
         Internet. The consolidated financial statements include the accounts of
         the Company and its wholly owned subsidiary, StogiesOnline.com, Inc.
         ("Stogies") (www.stogiesonline.com), and its majority owned
         subsidiaries, TheBroadcastWeb.com, Inc. ("Broadcast")
         (www.thebroadcastweb.com) and Mr. Cigar, Inc. ("Cigar").

         IINN, through its Venture group, owns an equity interest in several
         Internet companies, some of which are classified as trading securities
         and some of which are classified as available-for-sale securities.

         Stogies became an online distributor and retailer of brand name premium
         cigars within the United States on November 18, 1998. Stogies' products
         consist of premium cigars, factory brand name seconds and mass market
         cigars, which are distributed online to retail and wholesale customers.

         Broadcast is an aggregator and broadcaster of streaming media
         programming on the Web with the network infrastructure to deliver or
         "stream" live and on-demand audio programs over the Internet. Broadcast
         and its representative sites (BluesBoyMusic.com, SoulManMusic.com and
         JazzManMusic.com) rely primarily on providers of streaming media
         products to license encoders to it in order to broadcast its content
         and to distribute player software in order to create a broad base of
         users.

         American Computer Systems, Inc. ("ACS") was acquired effective
         September 30, 1999 and is a full service provider of computer systems
         and services to the federal government. ACS focuses on all phases of
         hardware implementation, including system engineering, product design,
         software integration and networking communications. IINN completed the
         sale of 80% of their interest in ACS for $500,000 as of March 31, 2000.

         In April 1999, IINN entered into a joint venture agreement with
         AuctionAnything.com, Inc. to launch a cigar auction site,
         StogiesAuction.com (www.stogiesauction.com), which offers its members
         the ability to bid on popular cigars, rare cigars and other hard to
         find cigar related items. The site offers a company-to-person trading
         platform as well as a public, person-to-person trading platform,
         offering sellers a vehicle for listing their own items for sale. Buyers
         are able to browse for items arranged by topic and bid through an
         online service. StogiesAuction.com is in direct competition with other
         Internet companies, such as eBay, Inc., Excite Auction, Yahoo Auction
         and Amazon Auction.

         The financial statements included in this report have been prepared by
         the Company pursuant to the rules and regulations of the Securities and
         Exchange Commission for interim reporting and include all adjustments
         (consisting only of normal recurring adjustments) that are, in the
         opinion of management, necessary for a fair presentation. These
         financial statements have not been audited.


                                       8
<PAGE>   9
         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 such
         rules and regulations for interim reporting. The Company believes that
         the disclosures contained herein are adequate to make the information
         presented not misleading. However, these financial statements should be
         read in conjunction with the financial statements and notes thereto
         included in the Company's Annual Report for the year ended December 31,
         1999, which is included in the Company's Form 10-KSB for the year ended
         December 31, 1999. The financial data for the interim periods presented
         may not necessarily reflect the results to be anticipated for the
         complete year. Certain reclassifications of the amounts presented for
         the comparative period have been made to conform to the current
         presentation.

B.       MARKETABLE INVESTMENT SECURITIES

         FAS No. 115 "Accounting for Certain Investments in Debt and Equity
         Securities," requires that all applicable investments be classified as
         trading securities, available-for-sale securities or held-to-maturity
         securities. The Company has classified certain of its investments as
         trading securities, which are reported at fair value, which is defined
         to be the last closing price for the listed securities. The unrealized
         gains and losses, which the Company recognizes from its trading
         securities, are included in earnings. The Company also has investments
         classified as available-for-sale, which are also required to be
         reported at fair value, with unrealized gains and losses excluded from
         earnings and reported as a separate component of shareholders' equity
         (net of the effect of income taxes). Fair value is also defined to be
         the last closing price for the listed security. Due to the size of
         certain of the Company's investments and their limited trading volume,
         there can be no assurance that the Company will realize the value which
         is required to be used by FAS No. 115.

         The following summarize the Company's investments:

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30,     DECEMBER 31,
                                                       2000              1999
<S>                                                <C>               <C>
         TRADING SECURITIES

         Cost                                      $    13,915       $    21,373
         Unrealized gain                               307,995           756,067
                                                   -----------       -----------
                                                       321,910           777,440
                                                   -----------       -----------

         AVAILABLE-FOR-SALE SECURITIES

         Cost                                        1,127,604            58,854
         Unrealized gain                            20,193,396                --
                                                   -----------       -----------
                                                    21,321,000            58,854
                                                   -----------       -----------
             Total FAS No. 115 value               $21,642,910       $   836,294
                                                   ===========       ===========
</TABLE>

         Gains (losses) from trading securities that were included in earnings
         for the nine months ended September 30, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                  2000                   1999
<S>                                            <C>                    <C>
         Realized                              $  647,776             $3,428,772
         Unrealized                            $ (448,072)            $1,552,330
</TABLE>




                                       9
<PAGE>   10
         Unrealized gains from available-for-sale securities included as a
         component of equity for the nine months ended September 30, 2000 and
         1999 were as follows:

<TABLE>
<CAPTION>
                                                            2000                1999
<S>                                                    <C>                  <C>
         Unrealized gain                               $ 20,193,396         $    -----
         Deferred income taxes                           (7,598,800)             -----
                                                       ------------        -----------
                                                       $ 12,594,596         $    -----
                                                       ============         ==========
</TABLE>

         The Company's investment in available-for-sale securities includes
         10,200,000 shares (10,000,000 shares not registered) of Goldonline
         International, Inc. ("GDOL") with a cost of $158,854 and a closing
         value on September 30, 2000 of $20,400,000 ($2.00 per share). The
         Company's investment represents 10.7% of the outstanding stock of GDOL
         and accordingly the Company is subject to certain restrictions on the
         number of shares it can sell. There can be no assurance that the
         Company will realize the calculated carrying value for the securities.

C.       NOTES PAYABLE AND COMPENSATING BALANCES

         The Company has a credit facility with Merrill Lynch for $3,400,000
         that bears interest at the 30-day Dealer Commercial Paper Rate plus
         2.3%. At September 30, 2000, the Company had repaid all advances on the
         line. This facility is subject to normal banking terms and conditions
         and requires compensating balances not less than 115% of the line of
         credit drawn.

         The Company financed certain insurance premiums in the amount of
         $91,410 during the nine months ended September 30, 2000 and made
         payments aggregating $60,329, leaving a balance at September 30, 2000
         of $31,081.

D.       INCOME TAXES

         Income tax expense (benefit) for continuing operations for the nine
         months ended September 30, 2000 and 1999 consists of:

<TABLE>
<CAPTION>
                                                             2000             1999
<S>                                                       <C>              <C>
         Current tax expense:
                  Federal                                 $       --       $  465,696
                  State                                           --           79,718
                                                          ----------       ----------
                                                                  --          545,414
         Deferred tax expense (benefit)                     (327,100)         590,527
                                                          ----------       ----------
                  Total income tax expense (benefit)      $ (327,100)      $1,135,941
                                                          ==========       ==========
</TABLE>




                                       10
<PAGE>   11
         Actual income tax expense (benefit) applicable to earnings (loss), from
         continuing operations, before income taxes is reconciled with the
         "normally expected" federal income tax expense (benefit) as follows for
         the nine months ended September 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                               2000              1999
<S>                                                        <C>               <C>
         "Normally expected" income tax expense            $  (297,488)      $ 1,371,880
         Increase (decrease) in taxes resulting from:
         State income taxes, net of Federal income             (31,762)          109,579
           tax benefit
         Change in valuation allowance                              --          (346,971)
         Nondeductible meals and other                           2,150             1,453
                                                           -----------       -----------
                                                           $  (327,100)      $ 1,135,941
                                                           ===========       ===========
</TABLE>



         The deferred income tax liabilities at September 30, 2000 are comprised
         of the following:

<TABLE>
<CAPTION>
                                                                  CURRENT         NONCURRENT
<S>                                                            <C>               <C>
         Unrealized gain on trading securities                 $   115,908       $        --
         Unrealized gain on available-for-sale securities        3,065,400         4,533,400
         Net operating loss                                       (136,000)               --
         Equity in net loss of affiliated company                       --            (5,800)
         Asset basis                                                    --             7,550
                                                               -----------       -----------

             Net deferred income tax liabilities               $ 3,045,308       $ 4,535,150
                                                               ===========       ===========
</TABLE>

E.       COMMON STOCK

         On March 15, 2000, the Company entered into an agreement with Avenel
         Financial Group ("AFG") to structure and fund an investment in the
         Company in an amount of up to $11,250,000. The Company plans to issue
         and sell to investors restricted shares of the Company's common stock
         at a purchase price of $.375 per share. For each five shares of common
         stock purchased, the investor will also receive a warrant which shall
         entitle the owner to purchase one share of common stock at an exercise
         price of $1.50 per share. AFG will be paid a fee of 3% of the gross
         amount funded to the Company.

         On April 3, 2000, the Company issued, in a private sale, 11,000,000
         shares of its unregistered common stock and 2,200,000 of its warrants,
         with an exercise price of $1.50 per share for net proceeds of
         $4,001,250.

F.       STOCK OPTIONS AND WARRANTS

         On September 30, 1999, as part of an employment agreement, the Company
         granted an option to purchase 2,000,000 shares of its common stock at
         an exercise price of $.10 per share. The option was scheduled to vest
         and become exercisable on September 30, 2000 and expire on September
         30, 2004. The stock option expired in April 2000, when the employee
         resigned.

         The Company has 2,200,000 warrants to purchase its common stock, with
         an exercise price of $1.50 per share, outstanding at September 30,
         2000.




                                       11
<PAGE>   12
G.       DIVESTITURES

         In December 1999, the Company decided to sell its wholly owned
         subsidiary ACS. In March 2000, the Company completed the agreement for
         sale of 80% of its interest in ACS to an ACS officer for $500,000. The
         Company received the full payment on April 5, 2000.

         The ACS segment is accounted for as a discontinued operation, and
         accordingly, amounts in the financial statements and related notes
         since the acquisition of ACS effective September 30, 1999, have been
         shown as discontinued operations. The assets of discontinued operations
         at March 31, 2000 consisted of:

<TABLE>
<S>                                                                   <C>
                  Cash                                                $ 106,481
                  Accounts receivable                                    86,864
                  Property and equipment, net                            26,825
                  Other assets                                          162,287
                                                                      ---------

                  Total assets                                          382,457

                  Liabilities                                           729,957
                                                                      ---------

                  Net assets of discontinued operations               $(347,500)
                                                                      =========
</TABLE>

         Operating results of the discontinued segment during the three months
         ended March 31, 2000, including expenses associated with the
         divestiture, are as follows:

<TABLE>
<S>                                                                   <C>
                  Net sales                                           $  43,830
                                                                      =========

                  Loss from operations before income taxes            $(148,141)
                  Income tax benefit                                     55,800
                                                                      ---------

                  Net loss from discontinued operations                 (92,341)
                                                                      ---------

                  Gain on sale                                          194,834
                  Income taxes                                          (73,400)
                                                                      ---------

                  Net gain on sale                                      121,434
                                                                      ---------

                  Net earnings from discontinued operations           $  29,093
                                                                      =========

         Net earnings per common share:

                  Basic                                               $    0.00
                                                                      =========
                  Diluted                                             $    0.00
                                                                      =========
</TABLE>



                                       12
<PAGE>   13
H.   SEGMENT INFORMATION

         For the nine months ended September 30, 2000, the Company operates in
         the following segments, none of which have intersegment revenues:

<TABLE>
<CAPTION>
                               Ventures           Stogies            Broadcast          Corporate        Consolidated
<S>                          <C>                <C>                <C>                <C>                <C>
         Revenues            $         --       $  1,691,699       $        619       $         --       $  1,692,318

         Operating loss          (226,096)          (443,875)          (163,661)          (357,496)        (1,191,128)

         Other income             184,174                 --                (52)           132,040            316,162

         Loss from
           continuing
           operations             (26,122)          (275,975)          (103,113)          (142,656)          (547,866)

         Discontinued
           Operations                                                                                          29,093
                                                                                                         ------------
         Net earnings                                                                                    $   (518,773)
                                                                                                         ============

         Assets              $ 21,766,032       $  1,417,582       $    143,157       $  3,895,063       $ 27,221,834
                             ============       ============       ============       ============       ============
</TABLE>


         The Venture segment owns an equity interest in several companies,
         mainly with Internet operations, and derives its revenues from the net
         gains and losses recognized when the investments are sold. In addition,
         the Venture segment recognizes income or loss from the unrealized gains
         or losses associated with their trading securities.

         The Stogies segment is an online distributor and retailer of brand name
         premium cigars within the United States, from which it derives all of
         its revenues.

         The Broadcast segment is an aggregator and broadcaster of streaming
         media programming on the Web with the network infrastructure to deliver
         or "stream" live and on-demand audio programs over the Internet.
         Broadcast will derive its revenues from advertising sales.

         Corporate assets consist of the majority of the cash and certain notes
         receivable. Interest expense will be allocated to the other segments to
         the extent it exceeds interest income.




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


         From time to time, the Company may publish forward-looking statements
         relative to such matters as anticipated financial performance, business
         prospects, technological developments and similar matters. The Private
         Securities Litigation Reform Act of 1995 provides a safe harbor for
         forward-looking statements. All statements other than statements of
         historical fact included in this section or elsewhere in this report
         are, or may be deemed to be, forward-looking statements within the
         meaning of Section 27A of the Securities Act of 1933 and Section 21E of
         the Exchange Act of 1934. Important factors that could cause actual
         results to differ materially from those discussed in such
         forward-looking statements include: 1. General economic factors
         including, but not limited to, changes in interest rates, trends in
         disposable income; 2. Information and technological advances; 3. Cost
         of products sold; 4. Competition; and 5. Success of marketing,
         advertising and promotional campaigns.

         The Company's continuing operations consist of two Internet based
         businesses. Stogies is an online distributor and retailer of brand name
         premium cigars within the United States and Canada. Broadcast is an
         aggregator and broadcaster of streaming media programming on the Web
         with the network infrastructure to deliver or "stream" live and
         on-demand audio programs over the Internet and Intranets.

         Stogies became operational in November 1998 and it accounts for
         substantially all of the sales revenue. Broadcast is still completing
         development of their infrastructure and expanding their base of
         listeners, and does not expect to commence advertising revenues, other
         than nominal amounts, until the end of the year 2000.

A.       LIQUIDITY AND CAPITAL RESOURCES

         The Company increased its working capital from $3,124,080 at December
         31, 1999 to $10,321,600 at September 30, 2000. The major components of
         the increase in the amount of $7,197,520 includes increases in cash in
         the amount of $1,021,550, increases in marketable equity securities in
         the amount of $8,086,616 and less an increase in deferred taxes payable
         in the amount of $2,760,800. The Company increased inventory to
         $700,420 at September 30, 2000 from $97,934 at December 31, 1999. The
         increase is due to higher sales levels experienced during the 2000 year
         as compared to the 1999 year and is also due to the seasonal
         requirements of the holiday sales season.

         The Company had $1,158,206 in cash flow used in operations during the
         nine months ended September 30, 2000 as compared to $2,833,453 in cash
         provided by operations in the year earlier period. The year earlier
         period included proceeds from the sale of marketable securities in the
         amount of $3,437,400 as compared to the current period amount of
         $678,566.

         On March 15, 2000, the Company entered into an agreement with Avenel
         Financial Group ("AFG") to structure and fund an investment in the
         Company in an amount of up to $11,250,000. The Company will issue and
         sell to investors restricted shares of the Company's common stock at a
         purchase price of $.375 per share. For each five shares of common stock
         purchased, the investor will also receive a warrant that shall entitle
         the owner to purchase one share of common stock at an exercise price of
         $1.50 per share. AFG will be paid a fee of 3% of the gross amount
         funded to the Company.


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<PAGE>   15
         On April 3, 2000, the Company issued, in a private sale, 11,000,000
         shares of its unregistered common stock and 2,200,000 of its warrants,
         with an exercise price of $1.50 per share for net proceeds of
         $4,001,250.

         The Company had originally budgeted capital expenditures in the amount
         of $150,000, primarily for Broadcast, for the year 2000 with plans to
         utilize cash reserves to meet its requirements. As of September 30,
         2000 the Company had completed acquisition of $693,752 in capital
         expenditures for cash, of which $95,797 was for Broadcast's operations
         and $597,955 was for Stogies operations.

         The majority of the funds expended for Stogies were for a complete
         front office/back office system using Great Plains eEnterprise and
         eCommerce together with the necessary equipment to operate the system.
         The system is designed to support high sales volumes with low
         transaction costs and will allow Stogies to reach customers around the
         globe and around the clock. The eEnterprise system delivers tools for
         building sales, reducing costs, and making the company more efficient
         by streamlining their workflow systems, minimizing manual processes,
         paperwork and reducing administrative overhead. Customers will benefit
         by having direct access to up-to-the minute information about
         inventory, pricing and "hot deals," as well as order and shipping
         information.

         The Company has a line of credit agreement with Merrill Lynch in the
         maximum amount of $3,400,000. The agreement requires annual renewal,
         expires initially on January 31, 2001 and includes variable interest at
         a per annum rate equal to the sum of 2.3% plus the 30-day Dealer
         Commercial Paper Rate. The annual fee is $34,000 and the collateral
         consists of a first security interest upon the Company's Merrill Lynch
         securities account containing securities having an aggregate value of
         not less than 115% of the line of credit drawn. At September 30, 2000,
         the Company had repaid all advances from the line of credit.

B.       RESULTS OF OPERATIONS

         SALES AND COST OF SALES - During the three and nine months ended
         September 30, 2000, sales increased to $571,233 and $1,692,318 from the
         year earlier amounts of $291,045 and $512,405, respectively. The 1999
         quarters were the first full quarters for the operations of Stogies,
         the Company's online distributor and retailer of brand name premium
         cigars. Sales increased 78% during the three month period ended
         September 30, 2000 and 230% during the nine month period ended
         September 30, 2000, as compared to the year earlier periods.

         Broadcast entered into an advertising agency agreement with Music
         Vision of New York in April 2000, to sell advertising on its network of
         music sites and expects revenues to commence by the end of the year.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - Selling, general and
         administrative expenses increased $408,234 (37%) to $1,509,413 in the
         nine month period ended September 30, 2000 as compared to the same year
         earlier period. Components of the increase include payroll in the
         amount of $234,087, legal and professional - $113,772, advertising -
         $65,122, freight - $44,868, insurance - $52,935, credit card processing
         fees - $33,371, depreciation - $34,403, other net costs - $98,712 and
         Broadcast's costs in the amount of $147,631 and less director's fees in
         the amount of $416,667 incurred in the 1999 period. The increase is
         consistent with the higher operational level of Stogies and the new
         costs associated with Broadcast.


                                       15
<PAGE>   16
         INTEREST EXPENSE - The Company incurred interest expense in the amount
         of $141,018, primarily on their credit facility with Merrill Lynch
         during the nine-month period ended September 30, 2000. The Company did
         not have any debt during the prior year period.

         MARKETABLE INVESTMENT SECURITIES - The Company sold trading equity
         securities during the nine months ended September 30, 2000 and realized
         profits in the amount of $647,776 as compared to profits of $3,428,772
         during the prior year period.

         The Company recognized unrealized losses in the amount of $448,072
         during the nine-month period ended September 30, 2000 and recognized
         unrealized gains in the amount of $1,552,330 during the year earlier
         period.

         OTHER INCOME - The Company had income of $273,006 and $53,218 from
         interest and dividends in the nine-month periods ended September 30,
         2000 and 1999, respectively. The higher year 2000 income is primarily
         the result of the higher cash balances available during the period.

         INCOME TAXES - The Company's effective tax rate during the nine months
         ended September 30, 2000 was approximately 37% as compared to 28% in
         the year earlier period. During the 1999 period, the Company recognized
         the tax benefit of net operating losses and other carryforwards that
         had previously been reserved.

         DISCONTINUED OPERATIONS - The Company sold 80% of their investment in
         ACS as of the end of March 2000. The net earnings from discontinued
         operation consisted of a loss of $92,341 from operations (net of tax
         benefit in the amount of $55,800) and a gain on the sale in the amount
         of $121,434 (net of taxes in the amount of $73,400).

         OTHER COMPREHENSIVE INCOME - Unrealized gains from available-for-sale
         securities included as a component of equity for the nine months ended
         September 30, 2000 were $12,594,596 ($20,193,396 gain less deferred
         taxes of $7,598,800). The Company did not recognize any unrealized
         gains from available-for-sale securities during the nine months ended
         September 30, 1999.




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<PAGE>   17
                           PART II - OTHER INFORMATION

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits - Not applicable

                  (b)      Reports on Form 8-K - None during the current
                           quarter.



                                        SIGNATURE

         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.

                                             INTERNATIONAL INTERNET, INC.



         Date:  November 13, 2000       By:  /s/ Gary Schultheis
                                            ------------------------------------
                                                 Gary Schultheis, President and
                                                 Principal Accounting Officer




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