<PAGE>   1

                       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, 2000.

                                       Or

[ ]      TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
         FROM                 TO             , 19     .
              ---------------    ------------    -----

                        Commission file number : 0-20937


                        PHOENIX INTERNATIONAL LTD., INC.
             (Exact name of registrant as specified in its charter)

               Florida                                   59-3171810
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

               500 International Parkway, Heathrow, Florida 32746
                    (Address of principal executive offices)

                                 (407) 548-5100
               (Registrant's telephone number including area code)

                                       N/A
              (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. Yes [ ] No [X]

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

                     Class                   Outstanding at October 23, 2000

         Common Stock, $0.01 par value                   9,410,689
                                                  ---------------------
                                                     (No. of Shares)


<PAGE>   2

                                EXPLANATORY NOTE

         As a result of the nonpayment of amounts due under certain software
license arrangements that had been previously recognized as revenue, Phoenix
conducted a comprehensive review of its software licensing arrangements and the
recognition of revenue for the years 1997 through 1999. As a result of that
review, Phoenix determined that, in certain instances, revenue that had been
recognized at the time the software was delivered should have been recognized
either as payments became due, as the related services were performed, upon
completion of all services required under the arrangements, or over the life of
the contract (up to five years). Additionally, in some instances revenue should
have been offset against development costs. In addition, Phoenix has determined
that certain software development costs were capitalized prior to the related
software reaching technological feasibility, or were otherwise capitalized in
error. We have restated our financial statements for the years ended December
31, 1999, 1998, and 1997, and the three-month periods ended March 31, 2000 and
1999, and the three- and six-month periods ended June 30, 1999. For a further
discussion of the restatement, see Note 1 of the Notes to Consolidated Financial
Statements included in Phoenix's Form 10-K/A for the year ended December 31,
1999 filed contemporaneously with the filing of this Form 10-Q.

         This Form 10-Q includes in Part I such restated financial statements
and related notes thereto for the three- and six-month periods ended June 30,
1999, together with financial statements and related notes for the three- and
six-month periods ended June 30, 2000.

         The effects of the restatement of the Company's financial statements
for the quarters and six-month periods ended June 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                           THREE MONTHS                        SIX MONTHS
                                           JUNE 30, 1999                     JUNE 30, 1999
                                   AS REPORTED      AS RESTATED      AS REPORTED      AS RESTATED

<S>                                <C>              <C>              <C>              <C>
Capitalized Software
  Costs, net                       $ 11,328,576     $  8,473,554     $ 11,328,576     $  8,473,554
Total Assets                         59,139,663       45,030,951       59,139,663       45,030,951
Deferred Revenue                      3,408,621       11,989,526        3,408,621       11,989,526
Shareholders Equity                  47,912,421       27,197,358       47,912,421       27,197,358

License Fees                          2,501,963        1,832,916        4,813,408        5,082,956
Implementation                        3,234,293        2,430,354        6,457,603        4,604,490
Total Revenues                        5,736,256        4,263,270       11,271,011        9,687,446
Total Expenses                        8,289,786        9,055,823       16,115,397       16,990,359
Net Loss                             (1,473,054)      (4,600,647)      (2,781,146)      (6,867,661)
Net loss per share -
  basic and diluted                $      (0.17)    $      (0.54)    $      (0.33)    $      (0.81)
</TABLE>


                                       2
<PAGE>   3

                        PHOENIX INTERNATIONAL LTD., INC.

                         TABLE OF CONTENTS TO FORM 10-Q

<TABLE>
<CAPTION>
                                                                                   PAGE
                                                                                   ----

<S>               <C>                                                              <C>
PART I            FINANCIAL INFORMATION

  Item 1.         Financial Statements (Unaudited)                                   4

                  Condensed Consolidated Balance Sheets as of
                  June 30, 2000 and December 31, 1999                                4

                  Condensed Consolidated Statements of Operations
                  for the Three Months and Six Months ended June
                  30, 2000 and 1999                                                  5

                  Condensed Consolidated Statements of Cash Flows
                  for the Three Months and Six Months ended June
                  30, 2000 and 1999                                                  6

                  Notes to Condensed Consolidated Financial
                  Statements                                                         7

  Item 2.         Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                               15

  Item 3.         Quantitative and Qualitative Disclosure on Market
                  Risk                                                              20

PART II           OTHER INFORMATION

  Item 1.         Legal Proceedings                                                 22

  Item 2.         Changes in Securities                                             22

  Item 3.         Defaults upon Senior Securities                                   22

  Item 4.         Submission of Matters to a Vote of Security Holders               22

  Item 5.         Other Information                                                 23

  Item 6.         Exhibits and Reports on Form 8-K                                  29

SIGNATURES

EXHIBIT INDEX
</TABLE>


                                       3
<PAGE>   4

                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        PHOENIX INTERNATIONAL LTD., INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                 June 30,        December 31,
                                                                                                   2000              1999
                                                                                               ------------      ------------
                                                                                                (Unaudited)       (Restated)
<S>                                                                                            <C>               <C>
ASSETS
     Current assets:
        Cash and cash equivalents                                                                $1,646,092      $  2,484,977
        Accounts receivable, net of allowance for doubtful accounts of $1,273,000 and
           $1,085,000 at June 30, 2000 and December 31, 1999, respectively                        9,818,202         8,039,819
        Prepaid expenses and other current assets                                                   572,178           639,303
                                                                                               ------------      ------------
           Total current assets                                                                  12,036,472        11,164,099
     Long-term investments, available for sale                                                    5,419,411         8,964,771
     Property and equipment:
        Computer equipment and purchased software                                                 5,543,773         5,087,369
        Furniture, office equipment and leasehold improvements                                    2,486,825         2,481,248
                                                                                               ------------      ------------
                                                                                                  8,030,598         7,568,617
        Accumulated depreciation and amortization                                                (4,776,678)       (3,964,923)
                                                                                               ------------      ------------
           Property and equipment, net                                                            3,253,920         3,603,694
     Capitalized software costs and purchased software, net of accumulated
        amortization of $5,223,000 and $4,099,000 at June 30, 2000 and
        December 31, 1999, respectively                                                          10,900,296        10,077,480
     Goodwill and other intangible assets, net of accumulated
        amortization of $168,000 and $41,000 at June 30, 2000, and
        December 31, 1999, respectively                                                           1,186,123         1,210,268
     Equity investments and other assets                                                            770,912         1,515,826
                                                                                               ------------      ------------
        Total assets                                                                           $ 33,567,134      $ 36,536,138
                                                                                               ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
        Accounts payable                                                                       $    915,940      $    905,395
        Accrued expenses                                                                          2,437,943         2,791,894
        Accrued contractor expense                                                                2,173,946         1,683,496
        Capital lease, current portion                                                              162,259           155,222
        Deferred revenue                                                                         16,486,463        14,003,270
                                                                                               ------------      ------------
           Total current liabilities                                                             22,176,551        19,539,277
     Capital lease, long-term portion                                                               116,448           199,871
     Minority interests                                                                             159,048           272,647

     Shareholders' equity:
        Common stock, $0.01 par value:
           50,000,000 shares authorized, 9,410,172 and 8,526,942 issued and
           outstanding at June 30, 2000 and December 31, 1999, respectively                          94,102            85,269
        Additional paid-in capital                                                               48,495,230        43,921,394
        Unrealized loss on investments available for sale                                        (1,374,666)         (577,670)
        Retained deficit                                                                        (36,099,579)      (26,904,650)
                                                                                               ------------      ------------
           Total shareholders' equity                                                            11,115,087        16,524,343
                                                                                               ------------      ------------
               Total liabilities and shareholders' equity                                      $ 33,567,134      $ 36,536,138
                                                                                               ============      ============
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
balance sheets.



                                       4
<PAGE>   5

                        PHOENIX INTERNATIONAL LTD., INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                      Three Months Ended                  Six Months Ended
                                                                           June 30,                           June 30,
                                                                 ----------------------------      ------------------------------
                                                                    2000             1999              2000              1999
                                                                 -----------      -----------      ------------      ------------
                                                                                  (Restated)                          (Restated)
<S>                                                              <C>              <C>              <C>               <C>
Revenues:
     License fees and other                                      $ 1,761,198      $ 1,832,916      $  3,370,258      $  5,082,956
     Implementation, customer and software
         support and other service fees                            2,375,795        2,430,354         5,053,226         4,604,490
                                                                 -----------      -----------      ------------      ------------
            Total revenues                                         4,136,993        4,263,270         8,423,484         9,687,446

Expenses:
     Cost of license fees and other                                2,244,285          980,889         3,356,569         1,671,126
     Cost of implementation, customer
         and software support and other service fees               1,700,823        2,296,025         3,718,992         4,525,867
     Sales and marketing                                           1,032,990        1,027,826         2,250,130         2,326,499
     General and administrative                                    1,508,318        1,803,731         3,044,587         2,863,228
     Product development                                           2,779,131        2,947,352         5,518,402         5,603,639
                                                                 -----------      -----------      ------------      ------------
         Total expenses                                            9,265,547        9,055,823        17,888,680        16,990,359

Other income (expense):
     Interest income                                                 131,579          305,096           282,503           610,539
     Interest expense                                                 (5,681)         (10,101)          (15,383)          (17,915)
     Other income (loss)                                             (35,351)          (7,704)          (57,679)          (26,925)
                                                                 -----------      -----------      ------------      ------------
Loss before minority interest and income taxes                    (5,038,007)      (4,505,262)       (9,255,755)       (6,737,214)
Minority interest                                                     39,415               --           113,599                --
                                                                 -----------      -----------      ------------      ------------
Loss before income taxes                                          (4,998,592)      (4,505,262)       (9,142,156)       (6,737,214)
                                                                 -----------      -----------      ------------      ------------
Income tax expense                                                    40,000           95,385            52,773           130,447
                                                                 -----------      -----------      ------------      ------------
Net loss                                                         $(5,038,592)     $(4,600,647)     $ (9,194,929)     $ (6,867,661)
                                                                 ===========      ===========      ============      ============
Net loss per share - basic and diluted                           $     (0.54)     $     (0.54)     $      (1.00)     $      (0.81)
                                                                 ===========      ===========      ============      ============
Weighted average shares outstanding - basic and diluted            9,410,172        8,514,802         9,194,646         8,509,875
                                                                 ===========      ===========      ============      ============
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
statements of operations.


                                       5
<PAGE>   6

                        PHOENIX INTERNATIONAL LTD., INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                     Six Months Ended
                                                                                                         June 30,
                                                                                               ------------------------------
                                                                                                  2000               1999
                                                                                               ------------      ------------
                                                                                                                  (Restated)
<S>                                                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                                       $ (9,194,929)     $ (6,867,661)
     Adjustments to reconcile net loss to net cash used in operating activities:
         Depreciation and amortization                                                            2,144,078         1,704,263
         Provision against accounts receivable                                                      188,000           120,000
         Minority interest                                                                         (113,599)               --
     Changes in operating assets and liabilities:
         Accounts receivable                                                                     (1,966,383)       (4,032,919)
         Prepaid expenses and other current assets                                                   67,125          (626,061)
         Accounts payable                                                                            10,545         1,090,991
         Accrued expenses                                                                           136,499         1,232,022
         Deferred revenue                                                                         2,483,193         4,090,825
                                                                                               ------------      ------------
            Net cash used in operating activities                                                (6,245,471)       (3,288,540)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                                                (461,981)         (439,226)
Sale of short term investments                                                                           --         5,562,965
Sale of long term investments                                                                     3,522,428                --
Capitalized software costs                                                                       (3,018,594)       (4,483,058)
Investment in ERAs                                                                                 (103,297)               --
Sale (purchase) of other assets                                                                     (29,150)               --
                                                                                               ------------      ------------
     Net cash provided by investing activities                                                      (90,594)          640,681

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligations                                                               (76,387)          (70,707)
Proceeds from funded research and development arrangements                                          990,898           930,889
Net proceeds from issuance of common stock                                                        4,582,669           139,899
                                                                                               ------------      ------------
     Net cash provided by financing activities                                                    5,497,180         1,000,081
                                                                                               ------------      ------------

     Net decrease in cash and cash equivalents                                                     (838,885)       (1,647,778)
     Cash and cash equivalents at beginning of the period                                         2,484,977         3,795,962
                                                                                               ------------      ------------
     Cash and cash equivalents at end of the period                                            $  1,646,092      $  2,148,184
                                                                                               ============      ============
</TABLE>


The accompanying notes are an integral part of these condensed consolidated
statements of cash flows.

                                       6
<PAGE>   7

                        PHOENIX INTERNATIONAL LTD., INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
include all adjustments, consisting only of normal recurring accruals, which
Phoenix considers necessary for a fair presentation of the financial position
and the results of operations for the interim periods presented. The condensed
consolidated financial statements have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures usually found in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements,
"Selected Financial and Operating Data," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in Phoenix's
annual report on Form 10-K/A for the year ended December 31, 1999, filed
contemporaneously with the filing of this Form 10-Q/A.

2.       RESTATEMENT

         As a result of the nonpayment of amounts due under certain software
license arrangements, Phoenix conducted a comprehensive review of its software
licensing arrangements and the recognition of revenue for the years 1997 through
1999. As a result of that review, Phoenix has determined that, in certain
instances, revenue that was recognized at the time the software was delivered
should have been recognized either as payments became due, as the related
services were performed or upon completion of all services required under the
arrangements or, in some instances, accounted for as funded development
arrangements. In addition, Phoenix has determined that certain software
development costs were capitalized prior to the related software reaching
technological feasibility, or were otherwise capitalized in error. As a result,
the financial statements for the years ended December 31, 1999, 1998, and 1997,
and the three- and six-month periods ended June 30, 1999, have been restated.


                                       7
<PAGE>   8

         The effects of the restatement of the Company's financial statements
for the quarters and six-month periods ended June 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED                SIX MONTHS ENDED
                                        JUNE 30, 1999                    JUNE 30, 1999
                                AS REPORTED      AS RESTATED     AS REPORTED      AS RESTATED
                                ------------     ------------    ------------     ------------

<S>                             <C>              <C>             <C>              <C>
Capitalized Software
  Costs, net                    $ 11,328,576     $  8,473,554    $ 11,328,576     $  8,473,554
Total Assets                      59,139,663       45,030,951      59,139,663       45,030,951
Deferred Revenue                   3,408,621       11,989,526       3,408,621       11,989,526
Shareholders' Equity              47,912,421       27,197,358      47,912,421       27,197,358
License Fees                       2,501,963        1,832,916       4,813,408        5,082,956
Implementation                     3,234,293        2,430,354       6,457,603        4,604,490
Total Revenues                     5,736,256        4,263,270      11,271,011        9,687,446
Total Expenses                     8,289,786        9,055,823      16,115,397       16,990,359
Net Loss                        $ (1,473,054)      (4,600,647)     (2,781,146)      (6,867,661)
Net loss per share -
  basic and diluted             $      (0.17)    $      (0.54)   $      (0.33)    $      (0.81)
Weighted average shares
    outstanding - basic
    and diluted                    8,514,802        8,514,802       8,509,875        8,509,875
</TABLE>

3.       NET LOSS PER SHARE

         Net loss per share is calculated and presented in accordance with
Statement of Financial Accounting Standards No. 128, Earnings per Share. Basic
earnings per share is computed using the average number of common shares
outstanding. Diluted earnings per share is computed on the basis of the average
number of common shares outstanding plus the effect of dilutive outstanding
stock options using the "treasury stock" method based on average stock price for
the period.


                                       8
<PAGE>   9

The following table sets forth the computation of basic and diluted earnings per
share.

<TABLE>
<CAPTION>
                                               Three Months Ended                  Six Months Ended
                                                     June 30,                          June 30,
                                          -----------------------------     -----------------------------
                                                            (Restated)                        (Restated)
                                              2000             1999             2000             1999
                                          ------------     ------------     ------------     ------------

<S>                                       <C>              <C>              <C>              <C>
Numerator - net loss                      $ (5,038,592)    $ (4,600,647)    $ (9,194,929)    $ (6,867,661)
                                          ============     ============     ============     ============

Denominator for basic and diluted
    net loss per share - weighted
    average shares outstanding               9,410,172        8,514,802        9,194,646        8,509,875
                                          ============     ============     ============     ============

Net loss per share - basic and
    diluted                               $      (0.54)    $      (0.54)    $      (1.00)    $      (0.81)
                                          ============     ============     ============     ============
</TABLE>

         Pursuant to Statement of Financial Accounting Standards No. 128 the
denominator for basic and diluted net income per share are identical for the
three months and six months ended June 30, 2000 and 1999, respectively, due to
the company's net losses. According to the statement, the exercise of any
outstanding options or warrants for a company with a net loss is considered
antidilutive. Employee stock options and warrants exercisable into 1,977,565 and
2,108,186 shares of common stock at June 30, 1999 and June 30, 2000,
respectively, have been excluded from the computation of diluted net loss per
share.

                                       9
<PAGE>   10

         Due to lack of funding and employee attrition, Phoenix has curtailed
its development of its future upgrade identified as project Aurora. Phoenix has
written off $409,635 of costs related to this project, which were previously
capitalized. The continuation and fruition of this project are currently at
significant risk.

5.       COMPREHENSIVE LOSS

         Phoenix adopted Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income as of January 1, 1998. This statement establishes
new rules for the reporting and display of comprehensive income and its
components. Comprehensive loss for the three months and six months ended June
30, 2000 and 1999, is comprised of the following:

<TABLE>
<CAPTION>
                                               Three Months Ended                 Six Months Ended
                                                     June 30,                          June 30,
                                          -----------------------------     -----------------------------
                                              2000             1999             2000             1999
                                          ------------     ------------     ------------     ------------
                                                            (Restated)                        (Restated)

<S>                                       <C>              <C>              <C>              <C>
Net loss as reported                      $ (5,038,592)    $ (4,600,647)    $ (9,194,929)    $ (6,867,661)
Other comprehensive income:
   Unrealized loss on investments
   available for sale                         (627,865)        (209,942)        (745,004)        (397,421)
                                          ------------     ------------     ------------     ------------
Comprehensive loss                        $ (5,666,457)    $ (4,810,589)    $ (9,939,933)    $ (7,265,082)
                                          ============     ============     ============     ============
</TABLE>

6.       RECENTLY ISSUED ACCOUNTING STANDARDS

         Effective January 1, 2000, Phoenix is required to adopt the provisions
of SOP 97-2 that limit what is considered vendor-specific objective evidence
(VSOE) of the fair value of the various elements in a multiple-element software
arrangement to the price charged when the same element is sold separately.
Because of the structure of Phoenix's contracts prior to October 1, 2000,
Phoenix has determined that it does not have VSOE, as defined in SOP 97-2, for
all undelivered elements in its software arrangements entered into between
January 1, 2000 and October 1, 2000 (the date that Phoenix modified the
structure of its contracts). As a result, all contracts that include maintenance
entered during that period will be required to be recognized over the
post-contract support period, generally five years.

         Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities, was issued in June 1998. This
statement establishes accounting and reporting standards for derivative
financial instruments and requires recognition of derivatives in the Statement
of Financial Position to be measured at fair value. Gains or losses resulting
from changes in the value of derivatives would be accounted for depending on the
intended use of the derivative and whether it qualifies for hedge accounting.
This statement is effective for our financial statements beginning in 2001. We
are currently studying the future effects of adopting this statement. However,
due to our limited use of derivative financial instruments, adoption of
Statement No. 133 is not expected to have a significant effect on our financial
position or results of operations.

         In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101") and


                                       10
<PAGE>   11

amended it in March and June 2000 with respect to the effective dates. We are
required to adopt the provisions of SAB 101 in our fourth fiscal quarter of 2000
and are currently in the process of assessing the impact of its adoption. While
SAB 101 does not supersede the software industry specific revenue recognition
guidance, which Phoenix believes it is in compliance with, once complete
guidance is disseminated, SAB 101 may change current interpretations of software
revenue recognition requirements. We do not expect the adoption of SAB 101 to
have a significant effect on our financial position or results of operations.

7.       CONTINGENCIES

Litigation

On November 23, 1999, a lawsuit was filed in the District Court for the Middle
District of Florida as a purported class action initiated by George Taylor, a
former Phoenix employee. Initially, Phoenix and our chief executive officer were
named as defendants. The lawsuit alleges, among other things, that Phoenix and
our chief executive officer improperly recognized revenues, overstated revenues
and failed to disclose that our revenues were allegedly in decline, all of which
allegedly caused our stock price to be higher than it otherwise would have been
during the class period. The lawsuit alleges that these purported actions
violate Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. On May 5, 2000, the plaintiffs filed an Amended
Complaint which, among other things, (1) adds four additional investors as named
plaintiffs and proposed class representatives; (2) expands the purported class
period to the period from May 5, 1997 to April 15, 1999; and (3) adds Phoenix's
president as an additional named defendant. Phoenix and the other two defendants
filed Motions to Dismiss, which were denied by the Court without opinion in
August 2000. The parties are beginning to conduct discovery. Phoenix's insurance
carriers have denied coverage for the claims in this lawsuit. Phoenix is
vigorously defending this case.

In addition, Phoenix is subject to various claims and legal proceedings covering
a variety of matters arising in the ordinary course of its business activities.

Customer Disputes

IBM/Sekerbank. In 1998, Phoenix contracted to provide software and software
development and implementation services as a subcontractor to IBM Turk Limited
Sirketi for the benefit of its customer, Sekerbank T.A.S. In May of 1999, IBM
informed Phoenix that its contract with Sekerbank had been cancelled. IBM then
purported to cancel its contract with Phoenix. According to IBM, Sekerbank
cancelled their contract with IBM because of the failure of Phoenix to perform,
called in an IBM performance bond from a bank, and received most of its money
back from IBM. IBM has paid Phoenix over $1 million under the subcontract, has
requested a return of all funds, and has indicated they may have claims against
Phoenix up to $5.2 million in damages. Phoenix disagrees with IBM's position,
believes that IBM, and not Phoenix, is responsible for the cancellation of the
contract by Sekerbank, and believes that it has claims against IBM under its
subcontract for the remaining value of the contract, which amounts to at least
$3.9 million. The parties are in negotiation to resolve the dispute. The
contract calls for arbitration of disputes; however, no arbitration or other
action has been filed by either party.

         Toprakbank. In June of 2000, Phoenix received notice from Toprakbank
A.S., one of its customers in Turkey, that it had canceled its implementation of
the Phoenix System. The parties have exchanged letters making cross claims
against each other. Toprakbank has paid Phoenix $550,000 under the contract and
has requested a refund of this money. Phoenix receivables from Toprakbank exceed
$1.3 million, and Phoenix has requested payment of this amount, plus future
support fees under the contract. The parties are in negotiation to resolve the
dispute. The contract calls for arbitration of disputes; however, no arbitration
or other action has been filed by either party.

         Demirbank. In June of 2000, Phoenix received notice from Demirbank
T.A.S., one of its customers in Turkey, that it has canceled its implementation
of the Phoenix System. To date Demirbank has paid Phoenix over $4.6 million
under its agreement. Phoenix receivables from Demirbank currently exceed
$900,000. No demand has been received from Demirbank. Phoenix has requested
payment of all receivables due. The parties are in negotiation to resolve the
dispute. The contract calls for arbitration of disputes; however, no arbitration
or other action has been filed by either party.


                                       11
<PAGE>   12
8.       SUBSEQUENT EVENTS

On August 22, 2000, we entered into an exclusivity agreement with London Bridge
Software Holdings plc, which among other things, provided for a 30-day period of
exclusivity during which the parties agreed to work towards definitive
agreements regarding an acquisition of Phoenix by London Bridge. On September
22, 2000, Phoenix and London Bridge extended the period of exclusivity through
October 8, 2000, and agreed to negotiate in good faith with respect to the
execution by that date of a definitive agreement providing for the acquisition
of Phoenix by London Bridge and the extension by London Bridge of a working
capital line of credit of up to $10 million for interim financing. On October 7,
2000, the parties agreed to extend the exclusivity period through October 31,
2000 on the same terms. Drafts of acquisition documents have been circulated for
comment, and we are continuing our discussions and negotiations with London
Bridge concerning the potential acquisition and interim financing. Consummation
of any transaction, however, is contingent on several conditions, including
resolution of the pending purported class action lawsuit and successful
completion of due diligence.

On August 23, 2000, the Nasdaq Stock Market halted trading in our common stock
at the last reported price of $3.00 per share. Trading in our common stock will
remain halted until we have satisfied Nasdaq's request for additional
information primarily regarding accounting issues identified in our press
release dated August 22, 2000. Nasdaq also indicated that it would delist our
common stock from trading on the Nasdaq National Market at the opening of
business on September 1, 2000, because of our failure to timely file our June
30, 2000 Form 10-Q, unless we appealed Nasdaq's decision. We timely requested an
appeal, and appeared at a hearing before the Nasdaq Listing Qualifications Panel
on September 22, 2000. The Listing Qualifications Panel stated that if Phoenix
failed to file its restated financial results and required periodic reports on
or before October 20, 2000, then our common stock would be delisted at that
time. We are fully cooperating with Nasdaq and do not expect that the
restatement of our financial statements will impact our ability to maintain
compliance with Nasdaq's quantitative listing requirements.


                                       12

<PAGE>   13

Any delisting by Nasdaq would likely have an adverse and material effect on the
price of our common stock and on the ability of our shareholders to sell their
shares. Such delisting could also adversely affect our ability to obtain
additional debt or equity financing and may result in a reduction in the amount
and quality of security analysts' and news media's coverage of our business
operations. There can be no assurance that our actions will be successful to
maintain listing on the Nasdaq National Market.

In the third quarter of 2000, Phoenix moved most of its Orlando operations into
one building, and is currently seeking a sublessee for a portion of its second,
smaller facility there. In addition, Phoenix intends to relocate its UK
operations to a serviced office, and is currently in negotiations to sublease
its UK facilities to a third party.

In the third quarter of 2000, we determined that the decrease of the value of
our investment in Netzee was other than temporary and we will therefore record a
loss in that quarter.


                                       13
<PAGE>   14

In October, Phoenix learned that a mini-tender offer for 400,000 shares of
Phoenix stock at a cash price of $.50 per share, less distributions after
September 7, 2000, was commenced by Sutter Opportunity Fund 2, LLC ("Sutter").
Phoenix recommended to its shareholders that they reject this mini-tender offer.

                                       14
<PAGE>   15

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

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

         This 10-Q contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements appear in a number of places in this Quarterly Report and
include all statements that are not historical statements of fact regarding our
intent, belief, current expectations, and those of our management with respect
to, among other things:

         -        our financing plans;
         -        trends affecting our financial condition or results of
                  operations;
         -        our growth strategy and operating strategy;
         -        the development and implementation of the Phoenix System and
                  our other products;
         -        sales performance and prospects; and
         -        the possible impact on our operations and financial
                  performance of market conditions and other factors that have
                  hindered us in the past, such as currently-pending litigation
                  and the slowdown in purchases of software during 1999.

The words "may," "would," "could," "continue," "will," "expect," "estimate,"
"anticipate," "goal," "strategy," "believe," "hope," "intend," "plan" and
similar expressions are intended to identify forward looking statements.
Forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, many of which we cannot control. Our actual results may
differ materially from those projected in forward looking statements. Among the
key risks, assumptions, and factors that may adversely affect our operating
results, performance, and financial condition are:

         -        whether we will be able to complete a transaction with London
                  Bridge or otherwise raise sufficient capital to continue
                  operations;
         -        whether the market conditions and other factors which hindered
                  our success in 1999, such as a slowdown in purchase decisions
                  as a result of Year 2000 concerns and the negative publicity
                  and litigation against us, will continue to affect our
                  operations in the future;
         -        unanticipated delays in developing new products and
                  enhancements;
         -        unanticipated delays in deploying our products and services
                  through our application service centers;
         -        whether the market accepts our new products and services,
                  including those under development and our e-commerce operating
                  environment and services;
         -        our reliance on significant new customers to reach or exceed
                  market expectations for our performance;
         -        the timing of customer contracts, which may slip from one
                  quarter to later quarters or fiscal periods;
         -        the timing of the recognition of revenue under new contracts;
         -        our ability to leverage our sales force, marketing
                  relationships, and other distribution channels worldwide to
                  generate new customers;
         -        settlement of customer disputes;


                                       15
<PAGE>   16

         -        the distraction of management's time and attention, increased
                  legal and other costs, and other adverse impacts of pending
                  litigation and negative publicity;
         -        our ability to grow and manage our growth despite adverse
                  market and other factors described above; and
         -        competition and other factors discussed in detail in our prior
                  press releases and filings with the Securities and Exchange
                  Commission, including the "Risk Factors" section of our
                  registration statement on Form S-1, as declared effective on
                  August 13, 1997 (No. 333-31415).

         We derive our revenues from two primary sources: (i) license fees for
software products, principally the Phoenix System, and commissions from the sale
of third party software and hardware; and (ii) fees for services, which include
implementation services, custom programming, training, interface development for
third party products, ongoing software support, and Internet/Intranet consulting
services.

         Our quarterly and annual operating results have varied significantly in
the past and may vary significantly in the future. Factors that may cause our
future operating results to vary include, but are not limited to:

         -        whether adverse market conditions and other factors that
                  hindered our sales in 1999 continue to impact our efforts;
         -        the size and timing of significant orders;
         -        the mix of direct and indirect sales;
         -        the mix and timing of U.S. and foreign sales;
         -        the manner in which revenue from new orders is recognized as a
                  result of the application of generally accepted accounting
                  principles;
         -        possible delays or other problems in new product
                  announcements;
         -        changes in our pricing policies and those of our competitors;
         -        possible delays or other problems in the development,
                  implementation, and release of our products and enhancements;
         -        the distraction of management's time, adverse impact on sales
                  and marketing efforts, and possible increased costs due to
                  pending litigation;
         -        whether we will have sufficient capital to satisfy concerns of
                  prospects;
         -        changes in our strategy and operating expenses; and
         -        competition and general economic factors.

Product revenues are difficult to forecast because the market for client/server
application software products is evolving and affected by many different
factors, including general considerations beyond our control such as the recent
slowdown attributable to Year 2000 concerns. Our sales cycle varies
substantially from customer to customer and can exceed 12 months in some cases.
In addition, license fee revenue from any particular contract can be recognized
in multiple ways which can cause significant variations in the recognition of
revenue from customer to customer. Depending on how the contract is structured,
the terms of each transaction, and other factors, license fees can be recognized
immediately upon execution of the contract (up front), over the period required
to implement the software for the customer (over 3 to 12 months), or over the
life of the contract (up to five years). Therefore we do not believe that
quarter-to-quarter comparisons of our results of operations can or should be
relied upon as indications of our future performance.


                                       16
<PAGE>   17
REVENUE RECOGNITION

         Effective January 1, 2000, Phoenix is required to adopt the provisions
of SOP 97-2 that limit what is considered vendor-specific objective evidence
(VSOE) of the fair value of the various elements in a multiple-element software
arrangement to the price charged when the same element is sold separately.
Because of the structure of Phoenix's contracts prior to October 1, 2000,
Phoenix has determined that it does not have VSOE, as defined in SOP 97-2, for
all undelivered elements in its software arrangements entered into between
January 1, 2000 and October 1, 2000 (the date that Phoenix modified the
structure of its contracts). As a result, all contracts that include maintenance
entered during that period will be required to be recognized over the
post-contract support period, generally five years.

RESULTS OF OPERATIONS

         The following table sets forth the percentage of total revenues
represented by certain line items in the Company's statement of operations for
the periods indicated.

<TABLE>
<CAPTION>
                                                           Three Months Ended     Six Months Ended
                                                                 June 30,              June 30,
                                                           ------------------     -----------------
                                                             2000       1999       2000       1999
                                                            ------     ------     ------     ------
                                                                     (Restated)            (Restated)
<S>                                                         <C>        <C>        <C>        <C>
Revenues:
     License fees and other                                   42.6%      43.0%      40.0%      52.5%
     Implementation, customer and software
         support and other service fees                       57.4%      57.0%      60.0%      47.5%
                                                            ------     ------     ------     ------
              Total revenues                                 100.0%     100.0%     100.0%     100.0%
Expenses:
     Cost of license fees and other                           54.2%      23.0%      39.8%      17.3%
     Cost of implementation, customer
         and software support and other service fees          41.1%      53.9%      44.2%      46.7%
     Sales and marketing                                      25.0%      24.1%      26.7%      24.0%
     General and administrative                               36.5%      42.3%      36.1%      29.6%
     Product development                                      67.2%      69.1%      65.5%      57.8%
                                                            ------     ------     ------     ------
         Total expenses                                      224.0%     212.4%     212.3%     175.4%

Other income (expense):
     Interest income                                           3.2%       7.2%       3.4%       6.3%
     Interest expense                                         (0.1)%     (0.2)%     (0.2)%     (0.2)%
     Other income (loss)                                       0.1%      (0.2)%     (0.7)%     (0.3)%
                                                            ------     ------     ------     ------

Loss before income taxes                                    (120.8)%   (105.7)%   (108.5)%    (69.5)%
Income tax expense                                             1.0%       2.2%       0.6%       1.3%
                                                            ------     ------     ------     ------
Net loss                                                    (121.8)%   (107.9)%   (109.1)%    (70.8)%
                                                            ======     ======     ======     ======
</TABLE>


                                       17
<PAGE>   18
Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

         Revenues. Total revenues decreased by 3% to $4.1 million in the three
months ended June 30, 2000, from $4.3 million in the three months ended June 30,
1999. Revenues from license fees decreased 4% to $1.76 million in the three
months ended June 30, 2000, from $1.83 million in the three months ended June
30, 1999. The decrease in license fee revenues was due to a decline in the
number of new contract signings, which fell from 6 to 2 license arrangement for
the Phoenix System between the two periods, and the effect of applying
subscription accounting to all contracts signed in the first half of 2000. Under
subscription accounting, all license and service revenues are spread over the
term of the contract, which typically extends for five years after the customer
has implemented the system. Since a significant portion of our license fees are
deferred under the provisions of SOP 97-2, whether through subscription
accounting or by other accounting methods, there is often a lag between the
signing of a contract and the recognition of the related license fee revenue.
Revenues from implementation, customer and software support, and other service
fees decreased 2% to $ 2.38 million in the three months ended June 30, 2000 from
$2.43 million in the three months ended June 30, 1999. Customer and software
support fees increased 48% from $0.7 million in the three months ended June 30,
1999 to $1.1 million in the three months ended June 30, 2000 due to an increase
in the number of installed clients.

         Expenses. On May 11, 2000, we initiated cost saving measures by
eliminating open positions, terminating approximately 15% of our existing
workforce, and reorganizing employees along US and International business lines.
The cost of salaries and employee benefits for the terminated employees was
approximately $3.5 million on an annualized basis. Severance-related expenses in
connection with these terminations was approximately $200,000, and cost of
license fees increased 129% to $2.2 million in the three months ended June 30,
2000 from $1.0 million in the three months ended June 30, 1999. These costs
increased mainly as a result of write-downs of capitalized assets of $0.5
million to their net realizable values in the three months ended June 30, 2000.
Amortization of capitalized software costs increased by $0.2 million and
royalties and commissions increased by $0.2 million between the two periods.

         Cost of implementation, customer and software support and other service
fees decreased 26% to $1.7 million in the three months ended June 30, 2000 from
$2.3 million in the three months ended June 30, 1999, primarily as a result of
decreased employee headcount.

         Sales and marketing expenses remained unchanged at $1.0 million in the
three months ended June 30, 2000 and 1999.

         General and administration expenses decreased 16% to $1.5 million in
the three months ended June 30, 2000, from $1.8 million in the three months
ended June 30, 1999, primarily as a result of lower administrative expenses.

         Product development expenses decreased 6% to $2.8 million in the three
months ended June 30, 2000 from $2.9 million in the three months ended June 30,
1999, primarily as a result of a reduced number of contractors in the latter
period.

         Other Income (Expense) and Minority Interest. Interest income was
$132,000 in the three months ended June 30, 2000 compared to $305,000 in the
three months ended June 30, 1999. Interest income decreased primarily due to a
decrease in interest yielding investments. The minority interest of $39,000 for
the three months ended June 30, 2000, is the net loss attributable to minority
shareholders of Phoenix International New York (formerly Servers On-Line, Inc.).
Phoenix acquired 54% of Servers On-Line in October 1999.

         Income Tax Expense. Income tax expense was $40,000 for the three months
ended June 30, 2000, and $95,000 for the three months ended June 30, 1999,
reflecting the Company's estimate of foreign taxes on projected foreign income.

         Net Loss. As a result of all of the above, the Company incurred a net
loss of $5.0 million in the three months ended June 30, 2000, compared to net
loss of $4.6 million in the three months ended June 30, 1999.


                                       18
<PAGE>   19
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

         Revenues. Total revenues decreased 13% to $8.4 million in the six
months ended June 30, 2000 from $9.7 million for the six months ended June 30,
1999. Revenues from license fees decreased $1.7 million, or 34%, to $3.4 million
for the six months ended June 30, 2000 from $5.1 million in the six months ended
June 30, 1999. The decrease in license fee revenues is attributable to the
effect of applying subscription accounting to all contracts signed in the first
half of 2000 and a decrease in the number of new contract signings, which fell
from 10 to 8 license arrangements for the Phoenix System between the two
periods. Under subscription accounting, all license and service revenues are
spread over the term of the contract, which typically extends for five years
after the customer has implemented the system. Since a significant portion of
our license fees are deferred under the provisions of SOP 97-2, whether through
subscription accounting or by other accounting methods, there is often a lag
between the signing of a contract and the recognition of the related license fee
revenue. Revenues from implementation, customer and software support, and other
service fees increased $0.4 million, or 10%, to $5.1 million in the six months
ended June 30, 2000 from $4.6 million in the six months ended June 30, 1999.
Customer and software support fees increased from $1.4 million to $2.6 million
between the two periods, reflecting an increased number of customers under
support agreements.

         Expenses. Cost of license fees increased 101% to $3.4 million in the
six months ended June 30, 2000 from $1.7 million in the six months ended June
30, 1999. These costs increased mainly as a result of higher royalties and
commissions due to third parties of $0.5 million, write-downs of capitalized
assets to their net realizable values of $0.5 million, and an increase in the
amortization of capitalized software costs of $0.5 million.

         Cost of implementation, customer and software support and other service
fees decreased $0.8 million, or 18%, to $3.7 million in the six months ended
June 30, 2000 from $4.5 million in the six months ended June 30, 1999, primarily
as a result of decreased staffing, travel and personnel related costs to support
customers under support agreements.

         Sales and marketing expenses remained mostly unchanged at $2.3 million
in the six months ended June 30, 2000 and 1999.

         General and administration expenses increased 6.0% to $3.0 million in
the six months ended June 30, 2000 from $2.9 million in the six months ended
June 30, 1999.

         Product development expenses decreased 2.0% to $5.5 million in the six
months ended June 30, 2000 from $5.6 million in the six months ended June 30,
1999.

         Total Other Income (Expense). Interest income was $282,000 and $611,000
in the six months ended June 30, 2000 and 1999, respectively. Interest income
decreased in the six months ended June 30, 2000 period primarily due to a
decrease in interest-bearing funds used to fund operations.

         Income Tax Expense. The income tax expense was $53,000 for the six
months ended June 30, 2000 and $130,000 for the six months ended June 30, 1999,
reflecting the Company's estimate of foreign taxes on projected foreign income.

         Net Loss. As a result of all of the above, the Company incurred a $9.2
million net loss in the six months ended June 30, 2000 compared to net loss of
$6.9 million in the six months ended June 30, 1999.


                                      19
<PAGE>   20

LIQUIDITY AND CAPITAL RESOURCES

         We fund our cash needs through existing cash and investment balances,
sales of capital stock, interest on investments and, to a lesser extent, through
cash flow from operations. We do not rely on lines of credit or other borrowings
to fund operations. At June 30, 2000, we had cash and cash equivalents of $1.6
million, and long-term investments of $5.4 million. Long-term investments
consist primarily of U.S. Treasury securities. For the six months ended June 30,
2000, our operations used net cash of $6.3 million, primarily due to our net
loss and an increase in trade receivables.

         For the six months ended June 30, 2000, investing activities used net
cash of $0.1 million, which included $3.5 million from the sale of investments,
reduced primarily by $3.0 million invested in capitalized software development
costs and $0.5 million in purchase of property and equipment.

         For the six months ended June 30, 2000, financial activities provided
$4.5 million from the net proceeds from the issuance of common stock and $1.0
in proceeds under funded software development arrangements.

         We believe our cash balances, investments, and cash flow from
operations will be sufficient to meet working capital, capital expenditure, and
software development requirements through the beginning of the 4th quarter 2000,
assuming no "New Business." Cash flows from operating activities are dependent
on continued advance payments from customers, and we cannot be sure that we will
continue to receive these payments or that we will continue to receive these
payments in advance of contract performance on the same terms as we have in the
past. We anticipate that operating activities will use cash in the future, due
primarily to growth in operations and development activities. These factors
raise substantial doubt about the ability of Phoenix to continue as a going
concern. Consequently, we will require additional equity or debt financing.
These statements are "forward looking" statements which are subject to risks and
uncertainties as previously discussed.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ON MARKET RISK

         Phoenix does not use derivative financial instruments in its operations
or investments. While we have significant international operations, our
contracts provide for all payments to be made in U.S. Dollars. We therefore do
not believe that fluctuations in foreign currency exchange rates will have a
material impact on our results or operations. We have experienced foreign
exchange losses from the operations of two of our foreign subsidiaries, but
believe these losses have been immaterial in amount. Foreign exchange risks in
the future could, however, have a material adverse impact on our results of
operations. Phoenix's short-term and long-term investments are deposited
principally in a single financial institution with significant assets and
consist of U.S. Treasury bills and notes with maturities of less than three
years. We do not consider the interest rate risk for these investments to be
material. We do not have any material credit facilities and, therefore, do not
have a significant risk due to potential fluctuations in interest rates for
loans at this time. Changes in interest rates could decrease our interest
income, could make it more costly to borrow money in the future, and may impede
Phoenix's future acquisition and growth strategies if management determines that


                                       20
<PAGE>   21

the costs associated with borrowing funds are too high to implement these
strategies.


                                       21
<PAGE>   22

                           PART II. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         On November 23, 1999, a lawsuit was filed in the District Court for the
Middle District of Florida as a purported class action initiated by George
Taylor, a former Phoenix employee. Initially, Phoenix and our chief executive
officer were named as defendants. The lawsuit alleges, among other things, that
Phoenix and our chief executive officer improperly recognized revenues,
overstated revenues and failed to disclose that our revenues were allegedly in
decline, all of which allegedly caused our stock price to be higher than it
otherwise would have been during the class period. The lawsuit alleges that
these purported actions violate Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. On May 5, 2000, the plaintiffs filed
an Amended Complaint which, among other things, (1) adds four additional
investors as named plaintiffs and proposed class representatives; (2) expands
the purported class period to the period from May 5, 1997 to April 15, 1999; and
(3) adds Phoenix's president as an additional named defendant. Phoenix and the
other two defendants filed Motions to Dismiss, which were denied by the Court
without opinion in August 2000. The parties are beginning to conduct discovery.
Phoenix's insurance carriers have denied coverage for the claims in this
lawsuit. Phoenix is vigorously defending this case.

In addition, Phoenix is subject to various claims and legal proceedings covering
a variety of matters arising in the ordinary course of its business activities.

ITEM 2.           CHANGES IN SECURITIES

         None.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Annual Meeting of the Shareholders of Phoenix was held on May 5,
2000 for the following purposes:

         1.       To elect four directors to serve on the Board of Directors;

         2.       To vote on a proposal to amend the 1996 Director Stock Option
                  Plan to increase the shares reserved for issuance and provide
                  for the grant of options to directors of Phoenix and its
                  subsidiaries in different amounts and at different times than
                  before;

         3.       To vote on a proposal to amend the 1995 Employee Stock Option
                  Plan to


                                       22
<PAGE>   23

                  increase the shares reserved for issuance; and

         4.       To transact any other business properly coming before the
                  Annual Meeting.

         Only shareholders of record at the close of business on March 15, 2000
were entitled to vote at the Annual Meeting. Proxies for the meeting were
solicited pursuant to the Florida Business Corporation Act, and there was no
solicitation in opposition to management's solicitation.

         Proxies and ballots were received from the holders of 6,279,633 shares
of the Company's common stock, representing 66.7% of the 9,410,172 outstanding
shares of common stock entitled to vote.

         The results were as follows:

         1.       The four individuals nominated to serve as directors were
                  elected with the number of votes for and withheld as indicated
                  below:

<TABLE>
<CAPTION>
                  NOMINEE                        FOR                 WITHHELD
                  -------                        ---                 --------

                  <S>                         <C>                    <C>
                  J. Michael Murphy           5,765,379               514,254
                  O. Jay Tomson               5,765,379               514,254
                  Ruann F. Ernst              5,765,379               514,254
                  William C. Hess             5,765,379               514,254
</TABLE>

         2.       The proposal to amend the 1996 Director Stock Option Plan was
                  approved with the number of votes as follows:

<TABLE>
                          <S>          <C>               <C>
                          For          -                 4,171,459
                          Against      -                   132,381
                          Withheld     -                 1,975,793
</TABLE>

         3.       The proposal to amend the 1995 Employee Stock Option Plan was
                  approved with the number of votes as follows:

<TABLE>
                          <S>          <C>               <C>
                          For          -                 3,508,806
                          Against      -                   797,684
                          Withheld     -                 1,973,143
</TABLE>

ITEM 5.           OTHER INFORMATION

         Many changes have occurred in Phoenix's business since December 31,
1999. These changes and other events subsequent to year end 1999 are described
below.

CUSTOMER DISPUTES

         IBM/Sekerbank. In 1998, Phoenix contracted to provide software and
software


                                       23
<PAGE>   24

development and implementation services as a subcontractor to IBM Turk Limited
Sirketi for the benefit of its customer, Sekerbank T.A.S. In May of 1999, IBM
informed Phoenix that its contract with Sekerbank had been cancelled. IBM then
purported to cancel its contract with Phoenix. According to IBM, Sekerbank
cancelled their contract with IBM because of the failure of Phoenix to perform,
called in an IBM performance bond, and received most of its money back from IBM.
IBM has paid Phoenix over $1 million under the subcontract, has requested a
return of all funds, and has indicated they may have claims against Phoenix for
up to $5.2 million in damages. Phoenix disagrees with IBM's position, believes
that IBM, and not Phoenix, is responsible for the cancellation of the contract
by Sekerbank, and believes that it has claims against IBM under its subcontract
for the remaining value of the contract, which amounts to at least $3.9 million.
The parties are in negotiation to resolve the dispute. The contract calls for
arbitration of disputes; however, no arbitration or other action has been filed
by either party.

         Toprakbank. In June of 2000, Phoenix received notice from Toprakbank
A.S., one of its customers in Turkey, that it had canceled its implementation of
the Phoenix System. The parties have exchanged letters making cross claims
against each other. Toprakbank has paid Phoenix $550,000 under the contract and
has requested a refund of this money. Phoenix receivables from Toprakbank exceed
$1.3 million, and Phoenix has requested payment of this amount, plus future
support fees under the contract. The parties are in negotiation to resolve the
dispute. The contract calls for arbitration of disputes; however, no arbitration
or other action has been filed by either party.

         Demirbank. In June of 2000, Phoenix received notice from Demirbank
T.A.S., one of its customers in Turkey, that it has canceled its implementation
of the Phoenix System. To date Demirbank has paid Phoenix over $4.6 million
under its agreement. Phoenix receivables from Demirbank currently exceed
$900,000. No demand has been received from Demirbank. Phoenix has requested
payment of all receivables due. The parties are in negotiation to resolve the
dispute. The contract calls for arbitration of disputes; however, no arbitration
or other action has been filed by either party.

DISCUSSIONS WITH LONDON BRIDGE

         In February 2000, London Bridge Software Holdings plc purchased 861,623
shares of Phoenix common stock for $5,000,000. This acquisition made London
Bridge a 9.16% equity owner in Phoenix as of the transaction date. In connection
with such purchase, Phoenix entered into an agreement with London Bridge to
market one of its products called "Vectus."

         On August 22, 2000, we entered into an exclusivity agreement with
London Bridge, which among other things, provided for a 30-day period of
exclusivity during which the parties agreed to work towards definitive
agreements regarding an acquisition of Phoenix by London Bridge. On September
22, 2000, Phoenix and London Bridge extended the period of exclusivity through
October 8, 2000, and agreed to negotiate in good faith with respect to the
execution by that date of a definitive agreement providing for the acquisition
of Phoenix by London Bridge and the extension by London Bridge of a working
capital line of credit of up to $10 million for interim financing. On October 7,
2000, the parties agreed to extend the exclusivity period through October 31,
2000 on the same terms. Drafts of acquisition documents have been circulated for
comment, and we are continuing our discussions and negotiations with London


                                       24
<PAGE>   25

Bridge concerning the potential acquisition and interim financing. Consummation
of any transaction, however, is contingent on several conditions, including
resolution of the pending purported class action lawsuit and successful
completion of due diligence.

RESTATEMENT OF FINANCIAL RESULTS

         Phoenix announced on August 23, 2000 that it was reviewing its revenue
recognition policies and might be required to restate its prior financial
results, and would be delayed in finalizing its 10-Q for the second quarter of
2000 as a result. This 10-K/A has been filed as a result of that restatement.

NASDAQ TRADING HALT

         On August 23, 2000, the Nasdaq Stock Market halted trading in our
common stock at the last reported price of $3.00 per share. Trading in our
common stock will remain halted until we have satisfied Nasdaq's request for
additional information primarily regarding accounting issues identified in our
press release dated August 22, 2000. Nasdaq also indicated that it would delist
our common stock from trading on the Nasdaq National Market at the opening of
business on September 1, 2000, because of our failure to timely file our June
30, 2000 Form 10-Q, unless we appealed Nasdaq's decision. We timely requested an
appeal, and appeared at a hearing before the Nasdaq Listing Qualifications Panel
on September 22, 2000. The Listing Qualifications Panel stated that if Phoenix
failed to file its restated financial results and required periodic reports on
or before October 20, 2000, then our common stock would be delisted at that
time. We are fully cooperating with Nasdaq and do not expect that the
restatement of our financial statements will impact our ability to maintain
compliance with Nasdaq's quantitative listing requirements.

         Any delisting by Nasdaq would likely have an adverse and material
effect on the price of our common stock and on the ability of our shareholders
to sell their shares. Such delisting could also adversely affect our ability to
obtain additional debt or equity financing and may result in a reduction in the
amount and quality of security analysts' and news media's coverage of our
business operations. There can be no assurance that our actions will be
successful to maintain listing on the Nasdaq National Market.

WORKFORCE REDUCTION

         On May 11, 2000, we initiated cost reduction measures by eliminating
open positions and terminating approximately 15% of our existing workforce. The
cost of salaries and employee benefits for the terminated employees was expected
to be approximately $3.5 million on an annualized basis. Severance-related
expenses in connection with these terminations was approximately $200,000.
Following this workforce reduction, the announcement of the restatement of our
financial results, and the trading halt imposed by Nasdaq, Phoenix has
experienced higher than normal attrition in its employee base.

         As of September 30, Phoenix had 275 employees and contract workers, of
which 99 were engaged in research and development (including research projects
and project development), 64 in U.S. sales, implementation, training and
support, 85 in international sales, implementation, training and support, 2 in
corporate marketing, 18 in finance and administration, and 7 in executive
management. This represents a significant reduction in staff since the end of
1999 in


                                       25
<PAGE>   26

all areas including sales, development, and support. Phoenix has also given
notice to Siemens Australia to reduce the number of development contractors by
an additional 17 before the end of the year. Phoenix is not currently hiring
additional employees or expanding its sales or operations. All of our executive
officers, other than William Zayas and Gregory Blalack who joined us in 2000,
have employment agreements with Phoenix.

         In the third quarter of 2000, Phoenix moved most of its Orlando
operations into one building, and is currently seeking a sublessee for a portion
of its second, smaller facility there. In addition, Phoenix intends to relocate
its UK operations to a serviced office, and is currently in negotiations to
sublease its UK facilities to a third party.

TENDER OFFER

         In October, Phoenix learned that a mini-tender offer for 400,000 shares
of Phoenix stock at a cash price of $.50 per share, less distributions after
September 7, 2000, was commenced by Sutter Opportunity Fund 2, LLC ("Sutter").
Phoenix recommended to its shareholders that they reject this mini-tender offer
for following reasons:

- By structuring its offer to acquire less than 5% of Phoenix's stock, Sutter's
offer falls in the category of mini-tender offers that are exempt from the
filing, disclosure and procedural requirement of Section 14(d) of the Securities
Exchange Act of 1934 and Regulation 14D adopted by the SEC. The disclosure and
procedural requirements of Section 14(d) and Regulation 14D are designed to
provide protections to shareholders who receive a tender offer. However, in
connection with the Sutter mini-tender offer, Phoenix shareholders will not
receive those protections. The U.S. Securities and Exchange Commission has
issued an investor alert regarding mini-tender offers, which can be accessed at
the SEC's web site at www.sec.gov/consumer/keyword/tminiten.html. Among other
things, the SEC recommends that before accepting such mini-tender offers,
shareholders should determine the market price, determine the tender price,
consult with their broker or financial advisor and determine where to get the
best price if they want to sell. The SEC warns investors not to assume that a
premium over fair value is being offered for their shares.

- The Sutter offer was made on a "First-Come, First-Buy Basis," which tends to
pressure shareholders to make a quick investment decision. If more than 400,000
shares should be tendered to Sutter, only those shareholders who responded most
quickly would get to sell their shares to Sutter. Phoenix has entered into an
exclusivity agreement with London Bridge Software Holdings plc. This exclusivity
agreement has been extended to October 31, 2000. Phoenix and London Bridge
agreed to negotiate in good faith with respect to the execution by that date of
a definitive agreement providing for the acquisition of Phoenix by London Bridge
and the extension by London Bridge of a working capital line of credit of up to
$10 million for interim financing. Shareholders who tender prior to any public
announcement of the execution of an agreement or the termination of negotiations
will be making an investment decision without the benefit of knowing whether or
not a definitive agreement had been executed or the price and terms that would
apply to London Bridge's acquisition should be a definitive agreement be
executed and consummated.

- The price offered by Sutter, $.50 per share less distributions after September
7, 2000, is less than the $3.00 per share trading price of Phoenix stock on
August 23, 2000, the date on which


                                       26
<PAGE>   27

Nasdaq trading in Phoenix stock was halted. Further, the Sutter offer states
that tenders of shares made pursuant to the offer are irrevocable (i.e., there
are no withdrawal rights) unless the offer is amended (other than to increase
the offer price or the number of shares that Sutter is willing to purchase) or
extended beyond November 17, 2000. Although Nasdaq may not allow trading in
Phoenix stock to resume in the future, Phoenix has requested that Nasdaq allow
trading to be resumed. Phoenix does not know the prices at which Phoenix stock
would trade should Nasdaq trading be resumed. However, if trading occurred at a
price higher than Sutter's offer prior to the expiration of Sutter's offer,
shareholders who had tendered their shares to Sutter could not then withdraw
their shares and thus could not sell their shares in the Nasdaq market (unless
the offer is amended or extended as described above).

CHANGES IN BUSINESS

         Downturn in Sales. Phoenix has closed 8 new contracts for the provision
of its core banking solution in the first 9 months of 2000, as compared to 13 in
the first 9 months of 1999, and 29 in the first 9 months of 1998. We believe
that the downturn in sales is attributable to:

         -        negative publicity from the purported class action lawsuit
                  described in "Item 3 - Legal Proceedings",
         -        negative postings on Phoenix's Yahoo! chat board,
         -        a slower than anticipated return to normal sales activity
                  following the year 2000 related downturn,
         -        prospect concerns about Phoenix's viability due to its recent
                  losses and decreasing capital reserves,
         -        the announced restatement of Phoenix's financials results, and
         -        the trading halt imposed by Nasdaq.

         ASC Centers. Only one new bank has been added to Phoenix's ASC centers
in 2000, and Phoenix does not anticipate that it will open any new centers in
2000, and no new centers are currently planned.

         Capital Resources. As described above, the events that depressed our
results of operations in 1999 have continued. Since December 31, 1999, sales are
down significantly and Phoenix has continued to lose money and use cash. At
September 30, 2000, Phoenix had approximately $4.1 million of cash and
marketable investment securities. If Phoenix does not complete the potential
transaction with London Bridge or otherwise identify new sources of capital
funding, Phoenix may not have sufficient capital resources to fund its
operations through the end of the year without significantly cutting back its
operations and expenses. As a result, Phoenix has included a "going concern"
note to its financial statements and Phoenix's auditors have included a "going
concern" modification in their audit opinion, both of which are included in
"Item 8 - Financial Statements and Supplementary Data."

         OCC. Our customers are being asked by the Office of the Comptroller of
the Currency to prepare contingency plans for replacing Phoenix as a vendor.

         Project Aurora. Due to lack of funding and employee attrition, Phoenix
has curtailed its development of its future upgrade identified as project
Aurora. Phoenix has written off the costs of this project which were previously
capitalized. The continuation and fruition of this project are currently at
significant risk.


                                       27
<PAGE>   28

         Professional Fees. Phoenix has incurred substantial professional fees
in relation to the defense of the class action lawsuit, the restatement of
Phoenix's financial results, and the negotiations with London Bridge. The
cumulative total of such fees is expected to exceed $2 million.

         New Software Releases. In February of 2000, Phoenix released version
2.5 of its EIS system. In June of 2000, Phoenix released version I 2.0.5 of the
international code line of the Phoenix core banking system. In October of 2000,
Phoenix released version 3.0 YE of its U.S. core banking system and Phoenix
International A.P. released version 3.6 of the Phoenix Trade Finance System.
Each of these new releases includes significant new functionality, new features,
and fixes for a significant number of previously identified bugs.

         New Marketing Partner in The Philippines. On March 31, 1999, Phoenix
entered into a new Cooperative Marketing agreement with Computer Data Vision,
Inc. (CDVI), pursuant to which Phoenix granted CDVI non-exclusive marketing
rights to Phoenix's products in The Philippines. CDVI brings significant
experience in the financial software area and is already working with two
customers in the region.

         Revision of Marketing Agreement with Towne Services, Inc. On June 28,
2000, Phoenix modified its marketing arrangement for software from Towne
Services, Inc. In exchange for $365,000, Phoenix agreed to convert its exclusive
marketing rights for TSI's Collection Works product into non-exclusive rights.
Further, TSI paid Phoenix a total of $175,000 in consideration of the sale of
exclusive marketing rights to such product to an entity in The Philippines.
Phoenix retained non-exclusive rights to market the TSI product on revised
terms.

         Regency Systems, Inc. Telephone Banking System. In May of 2000, Phoenix
entered into an agreement with Regency Systems, Inc. pursuant to which Regency
granted Phoenix rights to market Regency's telephone banking system to Phoenix
customers. Additionally, Regency agreed to replace the Phoenix telephone banking
system for Phoenix customers at no charge (other than one or two days worth of
on site implementation fees), and to provide support for such system at the
rates previously agreed with Phoenix for the Phoenix system.

         Relocation of Miami Application Service Center. In March of 2000,
Phoenix successfully relocated its Florida based Application Service Center
previously acquired from ERAS JV from Miami to its main offices in Orlando.

         E-commerce. In March of 2000, Phoenix entered into a marketing
arrangement with Stockwalk.com, Inc., pursuant to which Phoenix will integrate
Stockwalk.com's online brokerage services with Phoenix's Internet banking
products, allowing Phoenix's financial institution clients to offer their
customers seamless retail banking and co-branded online brokerage services. In
compliance with applicable rules and regulations, all brokerage services will be
provided and controlled directly by Stockwalk.com.


                                       28
<PAGE>   29

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

         a)       Exhibits

<TABLE>
<CAPTION>
   Exhibit
     No.     Description
   -------   -----------
   <S>       <C>
     3.1     Amended and Restated Articles of Incorporation, as amended by the
             Articles of Amendment to Amended and Restated Articles of
             Incorporation as filed with the Secretary of the State of Florida on
             May 28, 1997 (incorporated by reference to Exhibit 3.1 of our
             Registration Statement on Form S-1 (No. 333-31415) as declared
             effective by the SEC on August 13, 1997 (the "Registration
             Statement")).
     3.2     Amended and Restated Bylaws, effective July 8, 1996 (incorporated by
             reference to Exhibit 3.2 of Phoenix's Form 10-Q, dated August 14,
             1996, File No. 0-20937).
     4.1     See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
             Articles of Incorporation and Amended and Restated Bylaws defining
             the rights of the holders of Common Stock of Phoenix (incorporated by
             reference to Exhibit 4.1 of Registration Statement).
    10.1     Marketing Agreement between London Bridge Software Limited and
             Phoenix International Ltd., Inc. (incorporated by reference to Exhibit
             10.1 of Phoenix's Form 10-Q for the quarter ended March 31, 2000,
             dated May 15, 2000, File No. 0-20937).
    27.1     Financial Data Schedule for the six months ended June 30, 2000
             (for SEC use only).
</TABLE>

         b)       Reports on Form 8-K

                  None.


                                       29
<PAGE>   30

                                   SIGNATURES

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

                        PHOENIX INTERNATIONAL LTD., INC.


October 24, 2000               /s/Bahram Yusefzadeh
                               -------------------------------------------------
                               Bahram Yusefzadeh
                               Chairman of the Board and Chief Executive Officer
                               (principal executive officer)


October 24, 2000               /s/Theodore C. Burns
                               -------------------------------------------------
                               Theodore C. Burns
                               Senior Vice President and Chief Financial Officer
                               (principal financial and accounting officer)


                                       30
<PAGE>   31

                                  EXHIBIT INDEX

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

<S>        <C>                                                                           <C>
  3.1      Amended and Restated Articles of Incorporation, as amended by the
           Articles of Amendment to Amended and Restated Articles of
           Incorporation as filed with the Secretary of the State of Florida on
           May 28, 1997 (incorporated by reference to Exhibit 3.1 of Phoenix's
           Registration Statement on Form S-1 (No. 333-31415) as declared
           effective by the SEC on August 13, 1997 (the "Registration
           Statement")).
  3.2      Amended and Restated Bylaws, effective July 8, 1996 (incorporated by
           reference to Exhibit 3.2 of Phoenix's Form 10-Q, dated August 14,
           1996, File No. 0-20937).
  4.1      See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
           Articles of Incorporation and Amended and Restated Bylaws defining
           the rights of the holders of Common Stock of Phoenix (incorporated by
           reference to Exhibit 4.1 of Registration Statement).
 10.1      Marketing Agreement between London Bridge Software Limited and Phoenix
           International Ltd., Inc. (incorporated by reference to Exhibit 10.1 of
           Phoenix's Form 10-Q for the quarter ended March 31, 2000, dated May
           15, 2000, File No. 0-20937)
 27.1      Financial Data Schedule for the three months ended June 30, 2000
           (for SEC use only).
</TABLE>


                                       27