<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q



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

     For the quarterly period ended                  June 30, 1999
                                        ---------------------------------------

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

     For the transition period from                    to
                                    ------------------    -------------------

                       Commission file Number:      0-18338
                                                  -----------

                               I-Flow Corporation
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              California                                     33-0121984
-------------------------------------------------------------------------------
(State or other jurisdiction of incorporation             (I.R.S. Employer
           or organization)                              Identification No.)

    20202 Windrow Drive, Lake Forest, CA                      92630
-------------------------------------------------------------------------------
   (Address of principal executive offices)                 (Zip Code)

                                 (949) 206-2700
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

         As of June 30,1999 there were 14,416,841 shares of common stock
outstanding.




<PAGE>   2
                               I-FLOW CORPORATION

                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1999



                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
       <S>                                                                                                  <C>
       Part I:  Financial Information

                Item 1. Financial Statements

                Consolidated Balance Sheets as of June 30, 1999 (Unaudited)
                   and December 31, 1998                                                                        3

                Consolidated Statements of Operations for the three and six-month
                   periods ended June 30, 1999 and 1998 (Unaudited)                                             4

                Consolidated Statements of Cash Flows for the six-month periods
                   ended June 30, 1999 and 1998 (Unaudited)                                                     5

                Notes to Consolidated Financial Statements (Unaudited)                                          6

                Item 2. Management's Discussion and Analysis of Financial Condition
                   and Results of Operations                                                                    9

                Item 3. Quantitative and Qualitative Disclosures about Market Risk                             11

       Part II: Other Information                                                                              12

                Signatures                                                                                     14

</TABLE>


<PAGE>   3
                               I-FLOW CORPORATION
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                           June 30,        December 31,
                                                             1999              1998
                                                         ------------      ------------
ASSETS                                                   (Unaudited)
------
<S>                                                      <C>               <C>
  CURRENT ASSETS:
    Cash and cash equivalents                            $  2,810,000      $    971,000
    Accounts receivable, net                                6,289,000         7,490,000
    Inventories, net                                        4,292,000         4,328,000
    Prepaid expenses and other                                601,000           638,000
                                                         ------------      ------------
       Total current assets                                13,992,000        13,427,000
                                                         ------------      ------------

PROPERTY:
    Furniture, fixtures and equipment                       7,202,000         6,789,000
    Less accumulated depreciation                          (4,100,000)       (3,362,000)
                                                         ------------      ------------
       Property, net                                        3,102,000         3,427,000
                                                         ------------      ------------


OTHER ASSETS
    Goodwill and other intangibles, net                     7,338,000         7,223,000
    Notes receivable and other                                111,000           259,000
                                                         ------------      ------------
TOTAL                                                    $ 24,543,000      $ 24,336,000
                                                         ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                     $  1,075,000      $  1,300,000
    Accrued payroll and related expenses                    1,706,000         1,453,000
    Current portion of long-term debt                       1,946,000         2,083,000
    Borrowings under line-of-credit                         1,376,000         1,979,000
    Other liabilities                                         100,000            24,000
                                                         ------------      ------------
       Total current liabilities                            6,203,000         6,839,000
                                                         ------------      ------------

LONG-TERM DEBT                                              1,949,000         2,680,000
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Preferred stock - no par value; 5,000,000 shares
      authorized; 301,250 series B shares issued
      and outstanding at December 31, 1998                         --           686,000
    Common stock - no par value; 40,000,000 shares
      authorized; 14,416,841 and 14,044,428 shares
      issued and outstanding at June 30, 1999 and
      December 31, 1998, respectively                      38,522,000        37,735,000
    Common stock warrants                                     615,000           615,000
    Cumulative other comprehensive income                       1,000                --
    Accumulated deficit                                   (22,747,000)      (24,219,000)
                                                         ------------      ------------
       Net shareholders' equity                            16,391,000        14,817,000
                                                         ------------      ------------
TOTAL                                                    $ 24,543,000      $ 24,336,000
                                                         ============      ============

</TABLE>



See accompanying notes to consolidated financial statements



                                       3

<PAGE>   4
                               I-FLOW CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


<TABLE>
<CAPTION>

                                                       Three Months Ended                  Six Months Ended
                                                            June 30,                            June 30,
                                                 ------------------------------      ------------------------------
                                                     1999              1998              1999              1998
                                                 ------------      ------------      ------------      ------------
<S>                                              <C>               <C>               <C>               <C>

Net revenues                                     $  7,338,000      $  5,897,000      $ 13,555,000      $  9,964,000
                                                 ------------      ------------      ------------      ------------

Costs and expenses:
  Cost of sales                                     2,887,000         2,637,000         5,523,000         4,444,000
  Selling and marketing                             1,068,000         1,081,000         2,130,000         1,932,000
  General and administrative                        2,041,000         1,631,000         3,620,000         2,819,000
  Product development                                 286,000           233,000           526,000           442,000
                                                 ------------      ------------      ------------      ------------
    Total costs and expenses                        6,282,000         5,582,000        11,799,000         9,637,000

Operating income                                    1,056,000           315,000         1,756,000           327,000

Interest expense                                     (127,000)         (165,000)         (249,000)         (317,000)
Income taxes                                          (36,000)          (17,000)          (57,000)          (24,000)
                                                 ------------      ------------      ------------      ------------
Net income (loss)                                $    893,000      $    133,000      $  1,450,000      $    (14,000)
                                                 ============      ============      ============      ============



Net income per share

     Basic and diluted                           $       0.06      $       0.01      $       0.10      $         --
                                                 ============      ============      ============      ============

Comprehensive Operations:
     Net income (loss)                           $    893,000      $    133,000      $  1,450,000      $    (14,000)
     Foreign currency translation adjustment            1,000             5,000             1,000             5,000
                                                 ============      ============      ============      ============
     Comprehensive income (loss)                 $    894,000      $    138,000      $  1,451,000      $     (9,000)
                                                 ============      ============      ============      ============

</TABLE>




See accompanying notes to consolidated financial statements



                                       4


<PAGE>   5

                               I-FLOW CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                        Six Months Ended
                                                                             June 30,
                                                                   ----------------------------
                                                                      1999             1998
                                                                   -----------      -----------
<S>                                                                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                                  $ 1,450,000      $   (14,000)
Adjustments to reconcile net income (loss)
  to net cash provided by operations:
  Depreciation and amortization                                      1,220,000          885,000
  Changes in operating assets and liabilities:
    Accounts receivable                                              1,201,000          378,000
    Inventories                                                         35,000         (101,000)
    Prepaid expenses and other                                          37,000         (158,000)
    Accounts payable, accrued and other liabilities                    124,000       (1,835,000)
                                                                   -----------      -----------
Net cash provided (used) by operating activities                     4,067,000         (845,000)
                                                                   -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Property (acquisitions) disposals                                   (413,000)        (112,000)
  Change in other assets                                              (445,000)        (105,000)
                                                                   -----------      -----------
Net cash used by investing activities                                 (858,000)        (217,000)
                                                                   -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in line of credit                                            (604,000)        (751,000)
  Change in notes payable                                             (868,000)       1,705,000
  Proceeds from exercise of stock options and warrants                 101,000           13,000
                                                                   -----------      -----------
Net cash provided (used) by financing activities                    (1,371,000)         967,000
                                                                   -----------      -----------

Effect of exchange rates on cash                                         1,000          122,000

NET DECREASE IN CASH AND CASH EQUIVALENTS                            1,839,000           27,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF
  PERIOD                                                               971,000          715,000
                                                                   ===========      ===========
CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $ 2,810,000      $   742,000
                                                                   ===========      ===========


SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid                                                      $   266,000      $   218,000
                                                                   -----------      -----------
Income tax payments                                                $    27,000      $    24,000
                                                                   -----------      -----------
Preferred stock dividends payable                                  $        --      $    20,000
                                                                   -----------      -----------
Liabilities issued and assumed in connection with acquisition:
  Fair value of assets acquired (including intangibles)                               8,254,000
  Common stock issued                                                                 3,044,000
                                                                                    -----------
Liabilities issued and assumed                                                        5,210,000
                                                                                    ===========

</TABLE>

See accompanying notes to consolidated financial statements


                                       5


<PAGE>   6

                               I-FLOW CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

1.       BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements contain
         all adjustments (consisting only of normal recurring adjustments)
         which, in the opinion of management, are necessary to present fairly
         the financial position of the Company at June 30, 1999 and the results
         of its operations and its cash flows for the six-month periods ended
         June 30, 1999 and 1998. Certain information and footnote disclosures
         normally included in financial statements have been condensed or
         omitted pursuant to rules and regulations of the Securities and
         Exchange Commission although the Company believes that the disclosures
         in the financial statements are adequate to make the information
         presented not misleading.

         The financial statements included herein should be read in conjunction
         with the financial statements of the Company included in the Company's
         Annual Report on Form 10-K for the year ended December 31, 1998 filed
         with the Securities and Exchange Commission on March 31, 1999.

         Certain amounts previously reported have been reclassified to conform
         with the presentation at June 30, 1999.

2.       INVENTORIES

         Inventories consisted of the following as of June 30, 1999 and December
         31, 1998:

<TABLE>
<CAPTION>
                                                                      June 30,                  December 31,
                                                                        1999                        1998
         --------------------------------------------------------------------------------------------------
         <S>                                                       <C>                         <C>
                  Raw Materials                                    $  3,590,000                $  3,507,000
                  Work in Process                                       442,000                     172,000
                  Finished Goods                                      1,605,000                   1,869,000
                  Reserve for Obsolescence                           (1,345,000)                 (1,220,000)
         --------------------------------------------------------------------------------------------------

                  Total                                            $  4,292,000                $  4,328,000
         --------------------------------------------------------------------------------------------------
</TABLE>

3.       EARNINGS PER SHARE

         In December 1997, the Company adopted Statement of Financial Accounting
         Standards ("SFAS") No. 128, Earnings per Share. SFAS No. 128 redefines
         earnings per share under generally accepted accounting principles.
         Under the new standard, primary net income per share is replaced by
         basic net income per share and fully diluted net income per share is
         replaced by diluted net income per share. All historical earnings per
         share information has been restated as required by SFAS No. 128.

         Basic net income (loss) per share is computed using the weighted
         average number of common shares outstanding during the periods
         presented.

         Diluted net income (loss) per share is computed using the weighted
         average number of common and common equivalent shares outstanding
         during the periods presented assuming the conversion of all shares of
         the Company's convertible preferred stock into common stock and the
         exercise of all in-the-money stock options. Common equivalent shares
         have not been included where inclusion would be antidilutive.




                                       6




<PAGE>   7

         The following is a reconciliation between the net income (loss) and the
         number of shares used in the basic and diluted net income (loss) per
         share calculations:

<TABLE>
<CAPTION>
                                                                      Three Months Ended       Six Months Ended
                                                                           June 30,                June 30,
         ----------------------------------------------------------------------------------------------------------
         (Amounts in thousands)                                           1999        1998         1999        1998
         ----------------------------------------------------------------------------------------------------------
         <S>                                                            <C>         <C>          <C>         <C>
         Net income (loss)                                                 893         133        1,450         (14)
         Less preferred stock dividends                                     --          19           --          78
         ----------------------------------------------------------------------------------------------------------
         Net income (loss) available to common shareholders                893         114        1,450         (92)
         ----------------------------------------------------------------------------------------------------------
         Basic net income (loss) per share
            Weighted average number of shares outstanding               14,349      13,418       14,224      13,180
            Effect of dilutive securities:
               Preferred stock                                              --         700           --         700
               Stock options                                             1,161         272          799          --
         ----------------------------------------------------------------------------------------------------------
         Diluted net income (loss) per share
            Weighted average number of shares outstanding               15,510      14,390       15,023      13,880
         ----------------------------------------------------------------------------------------------------------
</TABLE>

4.       BUSINESS SEGMENTS

         The Company operates in two business segments: manufacturing and
         marketing of medical infusion pumps and rentals of medical infusion
         pumps.

         Business segment information is as follows for the three and six-month
         periods ended June 30, 1999 and 1998:

<TABLE>
<CAPTION>
                                                          Manufacturing
(Amounts in thousands)                                    and Marketing       Rentals       Consolidated
--------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>           <C>
Three months ended June 30, 1999:
Revenues                                                     $ 5,212          $ 2,126          $ 7,338
Operating income                                                 693              576            1,269
Assets                                                        15,832            8,711           24,543

Six months ended June 30, 1999:
Revenues                                                       9,439            4,116           13,555
Operating income                                               1,124            1,041            2,165
Assets                                                        15,832            8,711           25,543

Three months ended June 30, 1998:
Revenues                                                       4,269            1,628            5,897
Operating income                                                 351              157              508
Assets                                                        16,767            8,416           25,183

Six months ended June 30, 1998:
Revenues                                                       7,253            2,711            9,964
Operating income                                                 128              535              663
Assets                                                        16,767            8,416           25,183
--------------------------------------------------------------------------------------------------------
</TABLE>



                                       7

<PAGE>   8

5.       ACQUISITION OF INFUSYSTEMS II, INC. AND VENTURE MEDICAL, INC.

         On February 9, 1998, the Company entered into an Agreement and Plan of
         Merger (the "Agreement") with, InfuSystems II, Inc. ("InfuSystem"),
         Venture Medical, Inc. ("VMI") and the shareholders of InfuSystem and
         VMI, contemplating the merger of InfuSystem and VMI with and into a
         wholly-owned subsidiary of the Company. Pursuant to the Agreement, VMI
         and InfuSystem merged (the "Merger") with the subsidiary effective as
         of February 11, 1998. The acquisition was accounted for under the
         purchase method of accounting and the purchase price has been allocated
         to the net assets acquired and goodwill.

         In the Merger, all of the outstanding shares of Common Stock of VMI and
         InfuSystems were exchanged for shares of Common Stock of the Company.
         The aggregate number of shares of Common Stock of the Company issued in
         the Merger to the shareholders of VMI and InfuSystems was 972,372
         shares, valued at approximately $2.9 million (subject to certain
         post-closing adjustments). As contemplated by the Agreement, shares of
         Common Stock of the Registrant issued in the Merger valued at $1.5
         million (the "Escrowed Shares") were withheld and were delivered to an
         escrow agent, to be deposited in escrow. The Escrowed Shares, or cash
         equal to the closing value of the Escrowed Shares, will be held for a
         period of two years during which time they will be subject to claims by
         the Company to satisfy the obligations of InfuSystems, VMI and the
         shareholders of InfuSystems and VMI under the Agreement (subject to the
         possible earlier release of a portion of the Escrowed Shares in
         connection with collection of certain accounts receivable). At each of
         the six-month, one-year, eighteen-month and two-year anniversaries of
         the closing, if the value of the Company's Common Stock at such time is
         less than the value of its Common Stock as of the closing ($2.98 per
         share), then the Company will be obligated to pay additional amounts as
         merger consideration. Any additional amounts are to be calculated
         pursuant to the formula set forth in the Agreement. At the Company's
         election, it may pay such additional merger consideration by the
         issuance of additional shares of its Common Stock, in cash, or any
         combination thereof. In August 1998, the Company issued 234,806 shares
         of its Common Stock pursuant to the valuation floor provision for the
         six-month anniversary. There was no incremental value ascribed to these
         additional shares for purchase accounting of the acquisition. In March
         1999, the Company paid $286,081 pursuant to the valuation floor
         provision for the one-year anniversary.






                                       8

<PAGE>   9

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

         Certain disclosures made by the Company in this report and in other
         reports and statements released by the Company are and will be
         forward-looking in nature, such as comments that express the Company's
         opinions about trends and factors that may impact future operating
         results. Disclosures that use words such as the Company "believes,"
         "anticipates," or "expects" or use similar expressions are intended to
         identify forward-looking statements. Such statements are subject to
         certain risks and uncertainties that could cause actual results to
         differ from those expected. Readers are cautioned not to place undue
         reliance on these forward-looking statements. The Company undertakes no
         obligation to publish revised forward-looking statements to reflect the
         occurrence of unanticipated events. Readers are also urged to carefully
         review and consider the various disclosures made by the Company in this
         report that seek to advise interested parties of the risks and other
         factors that affect the Company's business, as well as in the Company's
         periodic reports on Forms 10-K, 10-Q, and 8-K filed with the Securities
         and Exchange Commission. The risks affecting the Company's business
         include reliance on the success of the home health care industry, the
         ability to penetrate hospital accounts, the health care reimbursement
         system in place now and in the future, competition in the industry,
         demand in foreign countries, customer credit risks, technological
         changes and product availability. Any such forward-looking statements,
         whether made in this report or elsewhere, should be considered in
         context with the various disclosures made by the Company about its
         business.

RESULTS OF OPERATIONS

         Net revenues during the three and six-month periods ended June 30, 1999
         were $7,338,000 and $13,555,000, respectively, compared to $5,897,000
         and $9,964,000 for the same periods in the prior year. In February
         1998, the Company acquired two new subsidiaries, InfuSystems II, Inc.
         and Venture Medical, Inc., both of which were national ambulatory
         infusion pump management and distribution companies based in Detroit,
         Michigan. These companies merged into InfuSystem, Inc. ("InfuSystem"),
         a wholly- owned subsidiary of the Company. Rental revenues generated by
         InfuSystem, Inc. of $2,126,000 and $4,116,000 were included in net
         revenues for the three and six-month periods ended June 30, 1999,
         respectively. Revenues generated by InfuSystem, Inc., subsequent to the
         February 11, 1998 acquisition date, of $1,628,000 and $2,711,000 were
         included in net revenues for the three and six-month periods ended June
         1998, respectively.

         Net product revenues increased from $7,253,000 for the six months ended
         June 30, 1998 to $8,599,000 for the same period in 1999, an increase of
         18%. Revenues in early 1998 were adversely affected by the
         restructuring of the Company's worldwide distribution network as well
         as existing high distributor inventory levels early in 1998, which
         caused a short-term decline in shipments of infusion products to the
         Company's previous distribution partners. As described below, several
         new distribution partners and new products were added in 1998 and 1999.
         These new distibutors contributed significantly to the increased
         product revenues for the six months ended June 30, 1999.

         In March 1998, the Company entered into an agreement with B. Braun
         Melsungen AG (G.BRN), a world leader in the manufacture and
         distribution of pharmaceuticals and infusion products, to distribute
         I-Flow's elastomeric infusion pumps in Western Europe, Eastern Europe,
         the Middle East, Asia Pacific, South America and Africa. The Company
         also entered into a similar agreement under which B. Braun of America,
         Inc. distributes I-Flow's elastomeric pumps to its full line IV
         solution customers in the United States.

         In May 1999, the Company entered into an agreement with dj Orthopedics
         LLC (formerly DonJoy, a division of Smith & Nephew, Inc.), a leading
         provider of orthopedic braces, to distribute the Company's recently
         introduced PainBuster in the United States and Canada for orthopedic
         surgery applications. I-Flow's PainBuster pain management system
         provides continuous infusion of a non-narcotic, local anesthetic
         directly into the intraoperative site for post-operative pain
         management. The agreement also


                                       9


<PAGE>   10

         calls for I-Flow to receive a nonrefundable $2 million licensing fee
         during 1999 and requires dj Orthopedics to make minimum purchases for
         1999 and beyond in order to maintain distribution rights. As of June
         30, 1999, the Company had received and recorded as revenue $800,000 in
         such licensing fees.

         In June 1999, the Company signed a distribution agreement with Ethicon
         Endo-Surgery, Inc., a Johnson & Johnson Company, under which Ethicon
         Endo-Surgery became the exclusive, worldwide distributor of I-Flow's
         disposable ON-Q pain management system, another new product for the
         pain management market, for all surgical applications (excluding
         orthopedics). The ON-Q pain management system infuses local anesthetics
         directly to the patient's primary source of post-operative pain. This
         multi-year agreement requires Ethicon Endo-Surgery to meet minimum
         purchase commitments to maintain exclusive distribution rights.

         The Company incurred cost of sales of $2,887,000 and $5,523,000 during
         the three and six-month periods ended June 30, 1999, compared to
         $2,637,000 and $4,444,000 in the prior year, an increase of 9% and 24%,
         respectively. As a percentage of product sales, cost of sales was
         relatively unchanged compared to the same periods in the prior year.

         Selling and marketing expenses for the three and six-month periods
         ended June 30, 1999 increased over the same periods in the prior year
         by $13,000 or 1% and $198,000 or 10%, respectively. The six-month
         increase is primarily due to the addition of such expenses for
         InfuSystem for the entire six-month period in 1999 versus only a
         portion of the six-month period for 1998.

         General and administrative expenses for the three and six-month periods
         ended June 30, 1999 increased $410,000 or 25% and $801,000 or 28% from
         the same periods in the prior year. These increases are due primarily
         to increased personnel costs, insurance costs and various other costs
         associated with the growth in the business as well as the addition of
         InfuSystem for the entire six month period in 1999 compared to only a
         portion of the six-month period for 1998.

         Product development expenses for the three and six-month periods ended
         June 30, 1999 increased over the same period in the prior year by
         $53,000, or 23% and $84,000 or 19%, respectively due primarily to
         increased efforts on the new pain management products. The Company will
         continue to incur product development expenses as it continues its
         efforts to introduce new and improved technology and cost-efficient
         products into the market.


LIQUIDITY AND CAPITAL RESOURCES

         During the six-month period ended June 30, 1999, funds of $4,067,000
         were provided by operating activities consisting of net income of
         $1,450,000 plus non-cash expenses of $1,220,000 and net changes in
         operating assets and liabilities of $1,397,000. These changes in
         operating assets and liabilities consisted of: (1) a decrease in
         accounts receivable of $1,201,000 due to improved collections, (2) a
         decrease in inventories of $35,000, (3) an decrease in prepaid expenses
         and other of $37,000 and (4) an increase in accounts payable, accrued
         expenses, and other liabilities of $124,000 due to an increase in
         deferred revenue.

         The Company used funds for investing activities during the six-month
         period ended June 30, 1999 aggregating $858,000. These expenditures
         consisted of $413,000 for acquiring furniture, fixtures and equipment
         for use in operations and $445,000 in intangible assets. The increase
         in intangibles included additional goodwill of $286,000 (see Note 5 of
         Notes to Consolidated Financial Statements) and expenditures relating
         to patents.

         During the six month period ended June 30, 1999, funds of $1,371,000
         were used for financing activities consisting primarily of payments on
         notes payable net of borrowings of $868,000 and a net reduction on the
         Company's line of credit of $604,000. The Company also received
         proceeds for the exercise of stock options of $101,000.


                                       10


<PAGE>   11

         As of June 30, 1999, the Company had cash funds of $2,810,000 and net
         receivables of $6,289,000. Management believes the Company's funds are
         sufficient to provide for its short and long-term projected needs for
         operations. However, the Company may decide to sell additional equity
         or increase its borrowings in order to fund increased product
         development or for other purposes.

YEAR 2000 COMPLIANCE

         Many computer systems and software products are coded to accept only
         two digit entries in the date code field. These date code fields will
         need to accept four digit entries to distinguish 21st century dates
         from 20th century dates. As a result, prior to the end of 1999,
         computer systems and/or software used in many companies may need to be
         upgraded to comply with such "Year 2000" requirements.

         The Company determined that it was necessary to modify or replace
         portions of its hardware and software so that its computer systems
         properly recognize dates beyond December 31, 1999. The Company believes
         that with these modifications and conversions, the Year 2000 issue can
         be managed, and the associated risks mitigated. The Company has
         received confirmation from vendors of certain software used for
         internal operations that current releases or upgrades are designed to
         be Year 2000 compliant. The Company has installed such upgrades to its
         current systems.

         The Company has contacted the companies on which I-Flow relies heavily
         to determine the extent to which the Company may be vulnerable to such
         parties' failure to resolve their own Year 2000 issues. Where
         practicable, the Company will assess and attempt to mitigate its risks
         with respect to failure of these entities to be Year 2000 ready. The
         effect, if any, on the Company's results of operations from the failure
         of such parties to be Year 2000 ready is not reasonably estimable.

         The Company is in the process of evaluating its own products for
         potential Year 2000 issues and making such products Year 2000
         compliant. The vast majority of the Company's products are not date
         sensitive and the Company does not directly rely on any of its vendors'
         or customers' systems. The Company does not believe that there will be
         significant issues or costs associated with making its products Year
         2000 compliant. However, there can be no assurance that such products
         do not contain undetected errors or defects associated with year 2000
         date functions.

         The Company has been using both external and internal resources to
         reprogram or replace its software for the Year 2000 issues. To date,
         the amounts incurred and expensed for developing and carrying out the
         plan have not had a material effect on the Company's operations. The
         Company has substantially completed its Year 2000 modifications,
         including testing, and does not anticipate any material costs remaining
         for addressing the Year 2000 issue. Although the Company is not aware
         of any material operational issues or costs associated with preparing
         its products or internal information systems for the year 2000, there
         can be no assurances that the Company will not experience serious
         unanticipated negative consequences and/or material costs caused by
         undetected errors or defects in the technology used in its internal
         systems, which are composed predominantly of third party software and
         hardware.

         Should the Company be unable to completely mitigate internal and
         external Year 2000 risks, this could result in a system failure or
         miscalculations causing disruptions of operations, including, among
         other things, a temporary inability to process transactions, send
         invoices, or engage in similar normal business activities at the
         Company or its vendors and suppliers. The Company believes, that under
         a worst case scenario, it could continue the majority of its normal
         business activities on a manual basis.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

FOREIGN CURRENCY

         The Company has a subsidiary operation in Mexico. Accordingly, the
         Company is exposed to transaction gains and losses that could result
         from changes in foreign currency exchange rates. The Company believes
         that this foreign currency market risk is not material.



                                       11


<PAGE>   12

                           PART II - OTHER INFORMATION

Items 1.-3.   Not applicable.

Item 4.       Submission of Matters to a Vote of Security Holders

              (a)   On May 13, 1999, the Company held its Annual Shareholders'
                    Meeting.

              (b)   A total of 11,545,966 of the outstanding voting securities
                    were represented at the Annual Shareholders' by proxy or in
                    person. All matters voted upon and approved at the Annual
                    Shareholders' Meeting were as follows:

                    (1) The separate tabulation of the votes for each Director
                    elected is as follows, with no abstentions, or broker
                    non-votes:

<TABLE>
<CAPTION>
                    Director Nominee                         Votes For       Votes Against
                    ----------------                         ---------       -------------
                    <S>                                     <C>              <C>
                    Donald M. Earhart                       11,450,599         95,367
                    Dr. John H. Abeles                      11,450,599         95,367
                    Erik H. Loudon                          11,450,599         95,367
                    Dr. Henry T. Tai                        11,450,599         95,367
                    Joel S. Kanter                          11,450,599         95,367
                    Jack H. Halperin                        11,450,599         95,367
                    James J. Dal Porto                      11,450,599         95,367
</TABLE>

Item 5.       Not applicable.

Item 6.       Exhibits and Reports on Form 8-K

              (a) Exhibits

<TABLE>
<CAPTION>
       Exhibit No.                             Exhibit
       -----------                             -------
       <S>                <C>
           3.1            Restated Articles of Incorporation of the Company (2)
           3.2            Certificate of Amendment to Restated Articles of
                          Incorporation dated June 14, 1991 (3)
           3.3            Certificate of Amendment to Restated Articles of
                          Incorporation dated May 12, 1992 (5)
           3.4            Certificate of Determination covering Company's Series
                          B Preferred Stock filed with the Secretary of State on
                          October 5, 1992 (5)
           3.5            Restated Bylaws as of July 22, 1991 of the Company (3)
           4.1            Specimen Common Stock Certificate (5)
           4.2            Warrant Agreement between the Company and American Stock Transfer
                          & Trust Company, as Warrant Agent, dated February 13, 1990 (1)
           4.3            Form of Warrant dated July 22, 1996, issued in conjunction with
                          the acquisition of Block Medical, Inc. (8)
          10.1            Employment Agreement with Donald M. Earhart dated May 16, 1990 (2)(6) *
          10.2            1987-1988 Incentive Stock Option Plan and Non-Statutory Stock Option
                          Plan Restated as of March 23, 1992 (5)(6) *
          10.3            1992 Non-Employee Director Stock Option Plan (4)(6)
          10.4            License and Transfer Agreement with SoloPak Pharmaceuticals Inc.,
                          dated March 6, 1996 (7)
</TABLE>



                                       12

<PAGE>   13

<TABLE>
<CAPTION>
       <S>                <C>
          10.5            1996 Stock Incentive Plan (6)(9) *
          10.6            Agreement for Purchase and Sale of Assets dated as of July 3, 1996 by and among
                          I-Flow Corporation, Block Medical, Inc. and Hillenbrand Industries, Inc. (8)
          10.7            Employment Agreement with James J. Dal Porto dated September 6, 1996 (10) *
          10.8            Lease Agreement Between Industrial Developments International, Inc. as
                          Landlord and I-Flow Corporation as Tenant dated April 14, 1997 (11)
          10.9            Agreement and Plan of Merger by and among I-Flow Corporation, I-Flow
                          Subsidiary, Inc., Venture Medical, Inc., and Infusystems II, Inc. and the
                          Shareholders of Venture Medical, Inc. and InfuSystems II, Inc. (12)
          10.10           Loan and Security  Agreement  between Silicon Valley Bank and I-Flow
                          Corporation dated September 28, 1995 (13)
          10.11           Amendment to Loan Agreement between Silicon Valley Bank and I-Flow Corporation
                          dated March 2, 1998 (13)
          27              Financial Data Schedule
</TABLE>

     (1)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#33-32263-LA) declared effective
          February 1, 1990.

     (2)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended September 30, 1990.

     (3)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#33-41207-LA) declared effective
          August 8, 1991.

     (4)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1991.

     (5)  Incorporated by reference to exhibit with this title filed with the
          Company's Post Effective Amendment to its Registration Statement
          (#33-41207-LA) declared effective November 6, 1992.

     (6)  Management contract or compensatory plan or arrangement required to be
          filed as an exhibit pursuant to applicable rules of the Securities and
          Exchange Commission.

     (7)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1995.

     (8)  Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated July 22, 1996.

     (9)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#333-16547) declared effective
          November 20, 1996.

     (10) Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1996.

     (11) Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated April 14, 1997.

     (12) Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated February 9, 1998.

     (13) Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1997.

* Compensation plan, contract or arrangement required to be filed as an exhibit
  pursuant to applicable rules of the Securities and Exchange Commission.



                                       13


<PAGE>   14

                                   SIGNATURES


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


                                            I-FLOW CORPORATION
                                            ------------------
                                               (Registrant)





Date:      August 12, 1999             /s/ Donald M. Earhart
      --------------------------      -----------------------------------------
                                      Donald M. Earhart,
                                      Chairman, President and CEO




Date:      August 12, 1999            /s/ Gayle L. Arnold
      --------------------------      -----------------------------------------
                                      Gayle L. Arnold,
                                      Vice President, Finance, Chief Financial
                                      Officer



                                       14

<PAGE>   15

                                INDEX TO EXHIBITS

     Set forth below is a list of the exhibits included or incorporated by
reference as part of this report:

<TABLE>
<CAPTION>
       Exhibit No.                       Exhibit
       -----------                       -------
       <S>                <C>
           3.1            Restated Articles of Incorporation of the Company (2)
           3.3            Certificate of Amendment to Restated Articles of Incorporation dated
                          June 14, 1991 (3)
           3.4            Certificate of Amendment to Restated Articles of Incorporation dated
                          May 12, 1992 (5)
           3.4            Certificate of Determination covering Company's Series
                          B Preferred Stock filed with the Secretary of State on
                          October 5, 1992 (5)
           3.5            Restated Bylaws as of July 22, 1991 of the Company (3)
           4.1            Specimen Common Stock Certificate (5)
           4.2            Warrant Agreement between the Company and American Stock Transfer
                          & Trust Company, as Warrant Agent, dated February 13, 1990 (1)
           4.3            Form of Warrant dated July 22, 1996, issued in conjunction with
                          the acquisition of Block Medical, Inc. (8)
          10.1            Employment Agreement with Donald M. Earhart dated May 16, 1990 (2)(6) *
          10.2            1987-1988 Incentive Stock Option Plan and Non-Statutory Stock Option
                          Plan Restated as of March 23, 1992 (5)(6) *
          10.3            1992 Non-Employee Director Stock Option Plan (4)(6)
          10.4            License and Transfer Agreement with SoloPak Pharmaceuticals Inc.,
                          dated March 6, 1996 (7)
          10.5            1996 Stock Incentive Plan (6)(9) *
          10.6            Agreement for Purchase and Sale of Assets dated as of July 3, 1996 by and among
                          I-Flow Corporation, Block Medical, Inc. and Hillenbrand Industries, Inc. (8)
          10.7            Employment Agreement with James J. Dal Porto dated September 6, 1996 (10) *
          10.8            Lease Agreement Between Industrial Developments International, Inc. as
                          Landlord and I-Flow Corporation as Tenant dated April 14, 1997 (11)
          10.12           Agreement and Plan of Merger by and among I-Flow Corporation, I-Flow
                          Subsidiary, Inc., Venture Medical, Inc., and Infusystems II, Inc. and the
                          Shareholders of Venture Medical, Inc. and InfuSystems II, Inc. (12)
          10.13           Loan and Security  Agreement  between Silicon Valley Bank and I-Flow
                          Corporation dated September 28, 1995 (13)
          10.14           Amendment to Loan Agreement between Silicon Valley Bank and I-Flow Corporation
                          dated March 2, 1998 (13)
          27              Financial Data Schedule
</TABLE>

     (1)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#33-32263-LA) declared effective
          February 1, 1990.

     (2)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended September 30, 1990.

     (3)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#33-41207-LA) declared effective
          August 8, 1991.

     (4)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1991.



                                       15



<PAGE>   16

     (5)  Incorporated by reference to exhibit with this title filed with the
          Company's Post Effective Amendment to its Registration Statement
          (#33-41207-LA) declared effective November 6, 1992.

     (6)  Management contract or compensatory plan or arrangement required to be
          filed as an exhibit pursuant to applicable rules of the Securities and
          Exchange Commission.

     (7)  Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1995.

     (8)  Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated July 22, 1996.

     (9)  Incorporated by reference to exhibit with this title filed with the
          Company's Registration Statement (#333-16547) declared effective
          November 20, 1996.

     (10) Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1996.

     (11) Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated April 14, 1997.

     (12) Incorporated by reference to exhibit with this title filed with the
          Company's Report on Form 8-K dated February 9, 1998.

     (13) Incorporated by reference to exhibit with this title filed with the
          Company's Form 10-K for its fiscal year ended December 31, 1997.

* Compensation plan, contract or arrangement required to be filed as an exhibit
  pursuant to applicable rules of the Securities and Exchange Commission.



                                       16