<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:       MARCH 31, 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 March 31, 2000 was 767,446,187.

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 - March 31, 2000 and December 31, 1999                       3

               Statement of Operations -                                                  4
               Three Months Ended March 31, 2000 and 1999

               Statement of Stockholders' Equity -                                        5
               Three Months Ended March 31, 2000

               Statements of Cash Flows -                                                6-7
               Three Months Ended March 31, 2000 and 1999

               Notes to Financial Statements -                                           8-12
               Three Months Ended March 31, 2000 and 1999

       Item 2. Managements Discussion and Analysis of Financial Condition               13-14
               and Results of Operations

Part II.       Other Information                                                         15
</TABLE>



                                       2
<PAGE>   3


INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                     March 31,      December 31,
                                                                                       2000             1999
                                                                                    (Unaudited)

<S>                                                                                 <C>             <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                          $1,105,111       $2,737,537
  Restricted cash                                                                     2,237,345              -
  Accounts receivable                                                                    52,068           34,098
  Marketable equity securities                                                        2,173,192          836,294
  Inventory                                                                             146,981           97,934
  Due from sale of 80% of subsidiary                                                    500,000              -
  Notes receivable                                                                       21,350           26,350
  Prepaid expenses                                                                       35,999            4,136
  Assets of discontinued operation                                                          -            447,665
                                                                                     ----------       ----------
Total current assets                                                                  6,272,046        4,184,014
Property and equipment, net                                                             139,886           97,209
Investments in partially-owned equity affiliates                                         76,291              -
Goodwill, less accumulated amortization of $2,740 and $1,917                             46,500           47,323
Other assets                                                                             10,197           10,882
                                                                                     ----------       ----------
                                                                                     $6,544,920       $4,339,428
                                                                                     ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable                                                                      $1,945,517       $      -
  Accounts payable                                                                      246,713          131,754
  Accrued expenses                                                                        3,649            5,244
  Liabilities of discontinued operation                                                     -            590,110
  Stockholder loans                                                                      16,348           18,000
  Income taxes payable                                                                   33,618           30,318
  Deferred income taxes                                                                 465,508          284,508
                                                                                     ----------       ----------
Total current liabilities                                                             2,711,353        1,059,934
Deferred income taxes                                                                     8,050            6,650

STOCKHOLDERS' EQUITY
  Common stock, $.00001 par value. Authorized 1,000,000,000 shares; issued and            7,674            7,674
   outstanding 767,446,187 shares
  Paid-in capital                                                                     2,658,741        2,658,741
  Retained earnings                                                                   1,159,102          606,429
                                                                                     ----------       ----------
Total stockholders' equity                                                            3,825,517        3,272,844
                                                                                     ----------       ----------
                                                                                     $6,544,920       $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 MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)



<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                     MARCH 31,
                                                             2000                 1999

<S>                                                     <C>                  <C>
SALES AND REVENUES                                      $     499,225        $      51,304

COST OF SALES                                                 395,061               41,713
                                                        -------------        -------------
GROSS PROFIT                                                  104,164                9,591

OTHER INCOME (EXPENSE):
  Selling, general and administrative expense                (344,724)            (137,407)
  Interest expense                                            (26,796)                 -
  Sale of marketable equity securities                        598,587                  -
  Other income                                                 29,393                   87
  Unrealized gain on marketable equity securities             481,056            5,974,020
                                                        -------------        -------------
    Total other income (expense)                              737,516            5,836,700
                                                        -------------        -------------
EARNINGS BEFORE INCOME TAXES                                  841,680            5,846,291

INCOME TAX EXPENSE                                            318,100            1,810,091
                                                        -------------        -------------
INCOME FROM CONTINUING OPERATIONS                             523,580            4,036,200

INCOME FROM DISCONTINUED OPERATIONS                            29,093                  -
                                                        -------------        -------------
NET EARNINGS                                            $     552,673        $   4,036,200
                                                        =============        =============

NET EARNINGS PER SHARE
  BASIC                                                 $       0.001        $       0.005
                                                        =============        =============
  DILUTED                                               $       0.001        $       0.005
                                                        =============        =============
  DISCONTINUED OPERATIONS                               $         -          $         -
                                                        =============        =============

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC                                                   767,446,187          740,998,322
                                                        =============        =============
  DILUTED                                                 768,989,044          740,998,322
                                                        =============        =============
</TABLE>


See accompanying notes to consolidated financial statements.




                                       4
<PAGE>   5



INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)

<TABLE>
<CAPTION>
                                        Common Stock                Paid-in        Retained
                                   Shares         Par Value         Capital        Earnings           Total
                                   ------         ---------         -------        --------           -----

<S>                              <C>              <C>             <C>              <C>              <C>
BALANCE, December 31, 1999       767,446,187       $  7,674       $2,658,741       $  606,429       $3,272,844
Net income                                                                            552,673          552,673
                                 ===========       ========       ==========       ==========       ==========
BALANCE, March 31, 2000          767,446,187       $  7,674       $2,658,741       $1,159,102       $3,825,517
                                 ===========       ========       ==========       ==========       ==========
</TABLE>


See accompanying notes to consolidated financial statements.



                                       5
<PAGE>   6




INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                   2000                1999

<S>                                                            <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings                                                   $   552,673        $ 4,036,200
Adjustments to reconcile net earnings to net
 cash provided by (used in) operating activities:
  Depreciation and amortization                                      9,860              6,905
  Gain from discontinued operations                                (29,093)                 -
  Gain on marketable investment securities                        (598,587)                 -
  Unrealized gain on marketable investment securities             (481,056)        (5,974,020)
  Proceeds from sale of marketable investment securities           628,578
  Purchase of marketable investment securities                     (23,333)           (20,000)
  Deferred income taxes                                            182,400          1,810,091
  Change in assets and liabilities:
    Accounts receivable                                            (17,969)            12,000
    Inventory                                                      (49,047)           (35,000)
    Other assets                                                   (31,865)                 -
    Notes receivable                                                 5,000                  -
    Accounts payable                                               (77,272)                 -
    Accrued expenses                                                (1,595)               740
    Income taxes payable                                             3,300                  -
                                                               -----------        -----------
Net cash provided by (used in) operating activities                 71,994           (163,084)
                                                               -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                             (51,029)            (6,867)
  Purchase of marketable investment securities                    (862,500)           (25,000)
  Net advances to discontinued operation                          (497,412)
                                                               -----------        -----------
Net cash used in investing activities                           (1,410,941)           (31,867)
                                                               -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock for cash                                          -            247,825
  Loan proceeds                                                  1,945,517                  -
  Due to shareholders                                               (1,652)                 -
                                                               -----------        -----------
Net cash provided by financing activities                        1,943,865            247,825
                                                               -----------        -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                          604,918             52,874

CASH AND CASH EQUIVALENTS, beginning of period                   2,737,538            116,965
                                                               ===========        ===========
CASH AND CASH EQUIVALENTS, end of period                       $ 3,342,456        $   169,839
                                                               ===========        ===========
</TABLE>


See accompanying notes to consolidated financial statements.

                                                                       Continued


                                       6
<PAGE>   7


INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(CONTINUED)

<TABLE>
<CAPTION>
                                                                            2000         1999
<S>                                                                       <C>            <C>

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest and income taxes are as follows:
  Interest                                                                $ 26,796       $   -
  Income taxes                                                            $150,000       $   -

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

Sale of 80% of subsidiary for receivable                                  $500,000       $   -
</TABLE>


See accompanying notes to consolidated financial statements.



                                       7
<PAGE>   8


INTERNATIONAL INTERNET, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 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 subsidiaries, American Computer
         Systems, Inc. ("ACS") and 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.
         IINN is also a party to a joint venture, Stogiesauction.com
         (www.stogiesauction.com), with AuctionAnything.com, 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. In November 1997, ACS was awarded its first General
         Services Administration schedule contract for computer systems and
         peripherals. This contract was extended for five additional years. IINN
         completed the sale of 80% of their interest in ACS for $500,000 as of
         the end of March 2000.

         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.

         In April 1999, IINN entered into a joint venture agreement with
         AuctionAnything.com, Inc. to launch a cigar auction site,
         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



                                       8
<PAGE>   9

         of management, necessary for a fair presentation. These financial
         statements have not been audited.

         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

         TRADING SECURITIES - At March 31, 2000, the Company has an investment
         in US corporate equity securities, which are classified as trading
         securities. As of March 31, 2000, the estimated value of $1,251,838
         exceeded the cost by $1,237,123.

         During the three months ended March 31, 2000, the Company received
         proceeds from the sale of equity investment securities in the amount of
         $628,578 and recognized a gain in the amount of $598,587. The Company
         had no sales during the three months ended March 31, 1999.

         During the three-month periods ended March 31, 2000 and 1999, the
         Company recognized unrealized gains in the amount of $481,056 and
         $5,974,020, respectively.

         AVAILABLE FOR SALE SECURITIES - At March 31, 2000 the Company held a
         security interest in four companies with a cost and approximate fair
         market value of $921,354.

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 March 31, 2000, $1,945,517 had been drawn against this 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.

         Restricted cash in the amount of $2,237,345 has been recorded in the
         financial statements as a result of the compensating balance
         requirements of the credit facility.



                                       9
<PAGE>   10



D.       INCOME TAXES

         Income tax expense for continuing operations for the three months ended
         March 31, 2000 and 1999 consists of:

<TABLE>
<CAPTION>
                                                                   2000          1999

<S>                                                             <C>            <C>
         Current tax expense:
                  Federal                                       $ 115,900      $         -
                  State                                            19,800                -
                                                                  -------        ---------
                                                                  135,700                -
         Deferred tax expense                                     182,400        1,810,091
                                                                  -------        ---------
                  Total income tax expense                      $ 318,100      $ 1,810,091
                                                                  =======        =========
</TABLE>


         Actual income tax expense applicable to earnings, from continuing
         operations, before income taxes is reconciled with the "normally
         expected" federal income tax expense as follows for the three months
         ended March 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                          2000             1999
<S>                                                                    <C>              <C>

         "Normally expected" income tax expense                        $ 286,171      $ 1,987,739
         Increase (decrease) in taxes resulting from:
         State income taxes, net of Federal income                        30,553          212,220
           tax benefit
         Change in valuation allowance                                         -         (389,868)
         Nondeductible meals and other                                     1,376                -
                                                                       ---------      -----------
                                                                       $ 318,100      $ 1,810,091
                                                                       =========      ===========
</TABLE>


         The deferred income tax liabilities at March 31, 2000 are comprised of
         the following:

<TABLE>
<CAPTION>
                                                                        CURRENT        NONCURRENT
<S>                                                                    <C>             <C>

         Marketable securities unrealized gain                         $ 465,508        $       -
         Asset basis                                                           -            8,050
                                                                       ---------        ---------
             Net deferred income tax liabilities                       $ 465,508        $   8,050
                                                                       =========        =========
</TABLE>

E.       STOCK OPTIONS

         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 vests and becomes
         exercisable on September 30, 2000 and expires on September 30, 2004.

F.       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 and including one warrant
         for every five shares purchased. The warrant 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.



                                       10
<PAGE>   11

         On April 3, 2000, the Company issued 11,000,000 shares of its 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.

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 consist 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>



                                       11
<PAGE>   12


H.       SEGMENT INFORMATION

         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         $        -        499,050            175               -        499,225

         Operating loss      (74,226)       (65,918)       (42,391)        (58,025)      (240,560)

         Other income      1,079,643              -              -          29,393      1,109,036

         Income from
           continuing
           operations        625,616        (41,018)       (26,591)        (34,427)       523,580

         Discontinued
           Operations                                                                      29,093
                                                                                       ----------
         Net earnings                                                                  $  552,673
                                                                                       ==========

         Assets           $2,249,483        292,618         93,031       3,909,788      6,544,920
                          ==========        =======         ======       =========     ==========
</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.



                                       12
<PAGE>   13


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 $3,560,693 at March 31, 2000. The major components of the
         increase in the amount of $436,613 includes increases in cash in the
         amount of $604,919, increases in marketable equity securities in the
         amount of $1,336,898 and less an increase in notes payable in the
         amount of $1,945,517.

         The Company had $71,994 in cash flow provided by operations during the
         three months ended March 31, 2000 as compared to $163,084 in cash used
         by operations in the year earlier period.

         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 and including one warrant for every
         five shares purchased. The warrant 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 11,000,000 shares of its 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 has budgeted capital expenditures in the amount of
         $100,000, primarily for Broadcast, for the year 2000 and will utilize
         cash reserves to meet its requirements. As of March 31, 2000 the
         Company had acquired $51,029 of the $100,000 budget in capital
         expenditures for cash.



                                       13
<PAGE>   14

         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 maximum line of credit. At March 31, 2000,
         the Company had received advances from the line of credit in the amount
         of $1,945,517 and has restricted $2,237,345 in cash to meet the
         compensating balance requirements.

B.       RESULTS OF OPERATIONS

         SALES AND COST OF SALES - During the three months ended March 31, 2000,
         sales increased to $499,225 from the year earlier amount of $51,304.
         The 1999 quarter was the first full quarter of operations for the
         operations of Stogies, the Company's online distributor and retailer of
         brand name premium cigars. The Company expects Stogies' sales to
         continue at this level.

         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 during the next quarter.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - Selling, general and
         administrative expenses increased $207,317 (151%) to $344,724 in the
         quarter ended March 31, 2000 as compared to the same year earlier
         quarter. Components of the increase include payroll in the amount of
         $87,952, advertising - $16,858, freight - $12,724, insurance - $13,349,
         credit card processing fees - $12,743, other costs - $21,126 and
         Broadcast's costs in the amount of $42,566. The increase is consistent
         with the higher operational level of Stogies and the new costs
         associated with Broadcast.

         INTEREST EXPENSE - The Company incurred interest expense in the amount
         of $26,796 on their credit facility with Merrill Lynch during the
         quarter ended March 31, 2000. The Company did not have any debt during
         the prior year quarter.

         MARKETABLE INVESTMENT SECURITIES - The Company sold trading equity
         securities during the quarter ended March 31, 2000 and realized profits
         in the amount of $598,587. The Company had no sales during the prior
         year quarter.

         The Company recognized unrealized gains in the amount of $481,056 and
         $5,974,020 during the quarters ended March 31, 2000 and 1999,
         respectively.

         OTHER INCOME - The Company had income of $29,393 and $87 from interest
         and dividends in the quarters ended March 31, 2000 and 1999,
         respectively. The higher year 2000 income is the result of the higher
         cash balances currently available.

         INCOME TAXES - The Company's effective tax rate during the three months
         ended March 31, 2000 was approximately 38% as compared to 31% in the
         year earlier quarter. During the 1999 quarter, 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).



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<PAGE>   15


                           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:    May 12, 2000          By:      /s/ Gary Schultheis
                                                 -------------------------------
                                                 Gary Schultheis, President and
                                                 Principal Accounting Officer



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