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

                                    FORM 10-Q
(Mark One)

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

For the quarterly period ended               September 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     (I.R.S. Employer Identification No.)
        incorporation or organization)

        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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

        Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                                       [ ] Yes  [ ] No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

        As of September 30,1999 there were 14,487,306 shares outstanding of
Common Stock.

<PAGE>   2

                               I-FLOW CORPORATION
                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999

                                TABLE OF CONTENTS


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

           Item 1.  Financial Statements

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

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

           Consolidated Statements of Cash Flows for the nine-month periods
               ended September 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>
                                                            September 30,        December 31,
                                                                1999                 1998
                                                            -------------        ------------
ASSETS                                                       (Unaudited)
<S>                                                         <C>                  <C>
  CURRENT ASSETS:
    Cash and cash equivalents                               $    809,000         $    971,000
    Accounts receivable, net                                   8,518,000            7,490,000
    Inventories, net                                           4,489,000            4,328,000
    Prepaid expenses and other                                   644,000              638,000

                                                            ------------         ------------
       Total current assets                                   14,460,000           13,427,000
                                                            ------------         ------------

PROPERTY:
    Furniture, fixtures and equipment                          7,614,000            6,789,000
    Less accumulated depreciation                             (4,456,000)          (3,362,000)

                                                            ------------         ------------
       Property, net                                           3,158,000            3,427,000
                                                            ------------         ------------


OTHER ASSETS
    Goodwill and other intangibles, net                        7,100,000            7,223,000
    Notes receivable and other                                   110,000              259,000

                                                            ------------         ------------
TOTAL                                                       $ 24,828,000         $ 24,336,000
                                                            ============         ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                        $  1,426,000         $  1,300,000
    Accrued payroll and related expenses                       2,065,000            1,453,000
    Current portion of long-term debt                          1,905,000            2,083,000
    Borrowings under line-of-credit                              260,000            1,979,000
    Other liabilities                                                 --               24,000

                                                            ------------         ------------
       Total current liabilities                               5,656,000            6,839,000
                                                            ------------         ------------

LONG-TERM DEBT                                                 1,571,000            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; 14,487,306 and 14,044,428 shares
      issued and outstanding at June 30, 1999 and
      December 31, 1998, respectively                         38,624,000           37,735,000
    Common stock warrants                                        615,000              615,000
    Cumulative other comprehensive income                         12,000                   --
    Accumulated deficit                                      (21,650,000)         (24,219,000)

                                                            ------------         ------------
       Net shareholders' equity                               17,601,000           14,817,000

                                                            ------------         ------------
TOTAL                                                       $ 24,828,000         $ 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                Nine Months Ended
                                                        September 30,                    September 30,
                                                ----------------------------     ----------------------------
                                                    1999            1998             1999            1998
                                                ------------    ------------     ------------    ------------
<S>                                             <C>             <C>              <C>             <C>
Net revenues                                    $  7,831,000    $  6,574,000     $ 21,387,000    $ 16,539,000
                                                ------------    ------------     ------------    ------------

Costs and expenses:
  Cost of sales                                    3,057,000       2,733,000        8,380,000       7,184,000
  Selling and marketing                            1,011,000       1,107,000        3,141,000       3,038,000
  General and administrative                       2,248,000       1,742,000        6,069,000       4,556,000
  Product development                                275,000         236,000          801,000         678,000

                                                ------------    ------------     ------------    ------------
    Total costs and expenses                       6,591,000       5,818,000       18,391,000      15,456,000

Operating income                                   1,240,000         756,000        2,996,000       1,083,000

Interest expense, net                                115,000         204,000          364,000         521,000
Income taxes                                          29,000          15,000           86,000          37,000

                                                ------------    ------------     ------------    ------------
Net income                                      $  1,096,000    $    537,000     $  2,546,000    $    525,000
                                                ============    ============     ============    ============


Net income per share
     Basic                                      $       0.08    $       0.04     $       0.18    $       0.04
     Diluted                                    $       0.07    $       0.04     $       0.17    $       0.03
                                                ============    ============     ============    ============

Comprehensive Operations:
     Net income                                 $  1,096,000    $    537,000     $  2,546,000    $    525,000
     Foreign currency translation adjustment          12,000          (9,000)          12,000          (9,000)
                                                ------------    ------------     ------------    ------------
     Comprehensive income                       $  1,108,000    $    528,000     $  2,558,000    $    516,000
                                                ============    ============     ============    ============
</TABLE>


See accompanying notes to consolidated financial statements



                                       4
<PAGE>   5

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


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

Net income                                                          $ 2,546,000       $   525,000
Adjustments to reconcile net income
  to net cash provided by operations:
  Depreciation and amortization                                       1,812,000         1,528,000
  Changes in operating assets and liabilities:
    Accounts receivable                                              (1,028,000)          561,000
    Inventories                                                        (161,000)          249,000
    Prepaid expenses and other                                           (6,000)         (231,000)
    Accounts payable, accrued and other liabilities                     737,000        (1,854,000)

                                                                    -----------       -----------
Net cash provided by operating activities                             3,900,000           778,000
                                                                    -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Property acquisitions                                                (825,000)         (403,000)
  Change in other assets                                               (446,000)          (13,000)

                                                                    -----------       -----------
Net cash used by investing activities                                (1,271,000)         (416,000)
                                                                    -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in line of credit                                           (1,719,000)       (1,243,000)
  Change in notes payable                                            (1,287,000)        1,352,000
  Proceeds from exercise of stock options and warrants                  203,000            13,000

                                                                    -----------       -----------
Net cash (used) provided by financing activities                     (2,803,000)          122,000
                                                                    -----------       -----------

Effect of exchange rates on cash                                         12,000           126,000

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                   (162,000)          610,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF
  PERIOD                                                                971,000           715,000
                                                                    -----------       -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $   809,000       $ 1,325,000
                                                                    ===========       ===========


SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid                                                       $   364,000       $   521,000
                                                                    -----------       -----------
Income tax payments                                                 $    86,000       $    37,000
                                                                    -----------       -----------
Conversion of preferred stock to common stock                       $   662,000       $   808,000
                                                                    -----------       -----------
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) that, in
        the opinion of management, are necessary to present fairly the financial
        position of I-Flow Corporation (the Company) at September 30, 1999 and
        the results of its operations and its cash flows for the three and
        nine-month periods ended September 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 September 30, 1999.

2.      INVENTORIES

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

<TABLE>
<CAPTION>
                                               September 30,     December 31,
                                                   1999              1998
        ---------------------------------------------------------------------
<S>                                            <C>                <C>
                Raw Materials                   $ 3,826,000       $ 3,507,000
                Work in Process                     591,000           172,000
                Finished Goods                    1,564,000         1,869,000
                Reserve for Obsolescence         (1,492,000)       (1,220,000)
        ---------------------------------------------------------------------

                Total                           $ 4,489,000       $ 4,328,000
        ---------------------------------------------------------------------
</TABLE>

3.      EARNINGS PER SHARE

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

        Diluted net income 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 and the number
        of shares used in the basic and diluted net income per share
        calculations:

<TABLE>
<CAPTION>
                                                                       Three Months              Nine Months
                                                                           Ended                    Ended
                                                                       September 30,             September 30,
        ---------------------------------------------------------------------------------------------------------
          (Amounts in thousands)                                    1999         1998         1999         1998
        ---------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>          <C>          <C>
          Net income                                               $ 1,096      $   537      $ 2,546      $   525
          Less preferred stock dividends                                             14                        42
        ---------------------------------------------------------------------------------------------------------
            Net income available to common shareholders            $ 1,096      $   523      $ 2,546      $   483
        ---------------------------------------------------------------------------------------------------------

          Basic net income per  share
             Weighted average number of shares outstanding          14,442       13,632       14,298       13,332
             Effect of dilutive securities:
                Preferred stock                                                     570                       570
                Stock options                                        1,324          185        1,008          333
        ---------------------------------------------------------------------------------------------------------
          Diluted net income  per share
             Weighted average number of shares outstanding          15,766       14,387       15,306       14,235
        ---------------------------------------------------------------------------------------------------------
</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 nine-month
        periods ended September 30, 1999 and 1998:


<TABLE>
<CAPTION>
                                              Manufacturing
                (Amounts in thousands)        and Marketing     Rentals   Consolidated
        ------------------------------------------------------------------------------
<S>                                           <C>               <C>       <C>
        1999
        THREE MONTHS ENDED SEPTEMBER 30,
        Revenues                                 $ 5,788        $ 2,043        $ 7,831
        Operating income                             814            426          1,240
        Assets                                    15,852          8,976         24,828

        NINE MONTHS ENDED SEPTEMBER 30,
        Revenues                                  15,228          6,159         21,387
        Operating income                           1,639          1,357          2,996
        Assets                                    15,852          8,976         24,828

        1998
        THREE MONTHS ENDED SEPTEMBER 30,
        Revenues                                   4,924          1,650          6,574
        Operating income                             563            193            756
        Assets                                    16,342          8,521         24,863

        NINE MONTHS ENDED SEPTEMBER 30,
        Revenues                                  12,178          4,361         16,539
        Operating income                             429            654          1,083
        Assets                                    16,342          8,521         24,863

        ------------------------------------------------------------------------------
</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 were merged (the "Merger") with and into 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. No adjustment was necessary for
        the eighteen-month anniversary in August 1999.



                                       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 nine-month periods ended September 30,
        1999 were $7,831,000 and $21,387,000, respectively, compared to
        $6,574,000 and $16,539,000 for the same periods in the prior year,
        representing an increase of 19% and 29%, respectively. 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 were merged into InfuSystem, Inc. ("InfuSystem"), a
        wholly owned subsidiary of the Company. Rental revenues generated by
        InfuSystem, Inc. of $2,043,000 and $6,159,000 were included in net
        revenues for the three and nine-month periods ended September 30, 1999,
        respectively. Rental revenues generated by InfuSystem, Inc. subsequent
        to the February 11, 1998 acquisition date, of $1,650,000 and $4,361,000
        were included in net revenues for the three and nine-month periods ended
        September 30, 1998.

        Net product revenues increased from $12,178,000 for the nine months
        ended September 30, 1998 to $13,769,000 for the same period in 1999, an
        increase of 13%. 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 distributors contributed significantly to the increased
        product revenues for the nine-months ended September 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. During the nine months ended September
        30, 1999 and 1998, aggregate sales to these two companies accounted for
        approximately 22% and 25%, respectively, of the Company's net revenues.

        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 PainBuster
        pain management system exclusively 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



                                       9
<PAGE>   10

        also 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
        September 30, 1999 the Company had recorded as revenue $1,400,000 in
        such licensing fees. The Company has not yet received payment for
        $600,000 of these licensing fees which were due September 20, 1999.

        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
        ON-Q Pain Management System for all surgical applications excluding
        orthopedics. The ON-Q Pain Management System infuses non-narcotic local
        anesthetics directly into the intraoperative site, 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.

        Cost of sales of $3,057,000 and $8,380,000 were incurred during the
        three and nine-month periods ended September 30, 1999, compared to
        $2,733,000 and $7,184,000 in the prior year. As a percentage of net
        sales, cost of sales was approximately 4 % lower compared to the same
        periods in the prior year due primarily to a change in the sales mix
        towards the new pain management products, which have a higher gross
        margin.

        Selling and marketing expenses for the three-months ended September 30,
        1999 decreased over the same period in the prior year by $96,000 or 9%,
        due to the lower selling costs associated with the new distribution
        agreements described above. Selling and marketing expenses for the
        nine-months ended September 30, 1999 increased over the same period in
        the prior year by $103,000 or 3%. The nine-month increase is primarily
        due to the addition of such expenses for InfuSystem for the entire
        nine-month period in 1999 versus only a portion of the nine-month period
        for 1998.

        General and administrative expenses for the three and nine-months ended
        September 30, 1999 increased $506,000 or 29% and $1,513,000 or 33% 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 nine-month period in 1999 compared to only a
        portion of the nine-month period for 1998.

        Product development expenses for the three and nine-months ended
        September 30, 1999 increased over the same period in the prior year by
        $39,000, or 17% and $123,000 or 18%, 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 nine month period ended September 30, 1999, funds of
        $3,900,000 were provided by operating activities consisting of net
        income of $2,546,000 plus non-cash expenses of $1,812,000 less net
        changes in operating assets and liabilities of $458,000. These changes
        in operating assets and liabilities consisted of: (1) an increase in
        accounts receivable of $1,028,000, (2) an increase in inventories of
        $161,000, (3) an increase in prepaid expenses and other of $6,000, less
        (4) an increase in accounts payable, accrued expenses, and other
        liabilities of $737,000.

        The Company used funds for investing activities during the nine-month
        period ended September 30, 1999 aggregating $1,271,000. These
        expenditures consisted of $825,000 for acquiring furniture, fixtures and
        equipment for use in its operations and $446,000 in intangible assets.
        Included in such amount is the payment of $286,000 to the former
        shareholders of InfuSystem (see Note 5 of Notes to Consolidated
        Financial Statements).

        During the nine month period ended September 30, 1999, funds of
        $2,803,000 were used for financing activities consisting primarily of
        payments on notes payable net of borrowings of $1,287,000 and a net



                                       10
<PAGE>   11

        reduction on the Company's line of credit of $1,719,000. The Company
        also received $203,000 in proceeds from the exercise of stock options.

        As of September 30, 1999, the Company had cash funds of $809,000 and net
        receivables of $8,518,000. 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 has modified or replaced portions of its hardware and
        software so that its computer systems properly recognize dates beyond
        December 31, 1999. The Company has completed its Year 2000 remediation
        efforts and 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. Additionally, The Company has contacted the
        companies that it relies heavily upon 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 has assessed and
        attempted 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 has evaluated its own products for potential Year 2000
        issues and made 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
        did not incur 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. Although the
        Company is not aware of any additional 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.



                                       11
<PAGE>   12

FOREIGN CURRENCY

        The Company has a subsidiary operating 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.


                           PART II - OTHER INFORMATION

Items 1. - 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 (4)

       3.4           Certificate of Determination covering Company's Series B
                     Preferred Stock filed with the Secretary of State on
                     October 5, 1992 (4)

       3.5           Restated Bylaws as of July 22, 1991 of the Company (3)

       4.1           Specimen Common Stock Certificate (4)

       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. (5)


       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)

       10.9          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)
</TABLE>



                                       12
<PAGE>   13

<TABLE>
<S>                  <C>
       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: November 11, 1999                /s/ Donald M. Earhart
             -------------------               ---------------------------------
                                               Donald M. Earhart,
                                               Chairman, President and CEO




        Date: November 11, 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)

       3.2          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)

      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



                                       15
<PAGE>   16

            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.



                                       16