<PAGE>   1
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(MARK ONE)

      X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    -----   EXCHANGE ACT OF 1934.
      
 For the quarterly period ended March 31, 1999

                                       OR

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

For the transition period from  _______ to _______

Commission File Number:  000-23453

                        FLEXIINTERNATIONAL SOFTWARE, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
<S>                                                                                           <C>       
                            Delaware                                                          06-1309427
 (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                  (I.R.S. EMPLOYER IDENTIFICATION NO.)

               Two Enterprise Drive, Shelton, CT                                                06484
            (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                          (ZIP CODE)
</TABLE>


                                 (203) 925-3040
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


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   X   No 
                                   -----    -----

As of May 7, 1999, there were 17,339,255 shares of FlexiInternational
Software, Inc. Common Stock outstanding.



<PAGE>   2
                        FLEXIINTERNATIONAL SOFTWARE, INC.

                                TABLE OF CONTENTS



                                                                           PAGE
                                                                           ----
PART I.    FINANCIAL INFORMATION                                           
           
Item 1.    Condensed Consolidated Financial Statements
              Condensed Consolidated Balance Sheet .......................   3
              Condensed Consolidated Statement of Operations .............   4
              Condensed Consolidated Statement of Cash Flows .............   5
              Condensed Consolidated Statement of Stockholders' Equity ...   6
              Notes to Condensed Consolidated Financial Statements .......   7
Item 2.    Management's Discussion and Analysis of Financial                
           Condition and Results of Operations ...........................   9
Item 3.    Quantitative and Qualitative Disclosure About Market Risk......   9
                                                                            
PART II.   OTHER INFORMATION                                                
Item 2.    Changes in Securities and Use of Proceeds .....................  13
Item 6.    Exhibits and Reports on Form 8-K ..............................  13
           Signature .....................................................  13
                                                                           
                                    













                                       2
<PAGE>   3
PART I.  FINANCIAL INFORMATION 

ITEM 1.  CONDENSED FINANCIAL STATEMENTS

                        FLEXIINTERNATIONAL SOFTWARE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                       March 31,    December 31,
                                                                                       ---------    ------------
                                                                                         1999           1998
                                                                                         ----           ----
                                                                                      (unaudited)
<S>                                                                                    <C>            <C>     
         ASSETS
Current assets:
  Cash and cash equivalents                                                            $  4,771       $  7,876
  Marketable securities                                                                   3,000          3,000
  Accounts receivable, net of allowance for doubtful
    accounts of $985 and $812, respectively                                              10,267         13,051
  Prepaid expenses and other current assets                                                 658            999
                                                                                       --------       --------
        Total current assets                                                             18,696         24,926

Property and equipment at cost, net of accumulated depreciation
 and amortization of $3,444 and $3,121, respectively                                      2,455          2,732
Acquired software, net of accumulated amortization of $324 and $216, respectively         1,836          1,944
Goodwill, net of accumulated amortization of $849 and $566, respectively                  4,818          5,101
Other assets, net of accumulated amortization of $217 and $217, respectively                208            218
                                                                                       --------       --------

        Total assets                                                                   $ 28,013       $ 34,921
                                                                                       ========       ========
         LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
  Accounts payable                                                                     $  2,001       $  3,199
  Accrued commissions                                                                       370            725
  Accrued restructuring costs                                                             1,211             --
  Accrued expenses - other                                                                2,605          3,483
  Current portion of capital lease obligations                                              594            586
  Short-term debt                                                                         2,000             --
  Deferred revenues                                                                       4,469          4,341
                                                                                       --------       --------
        Total current liabilities                                                        13,250         12,334

Long-term portion of capital lease obligations                                              714            878
                                                                                       --------       --------

        Total liabilities                                                                13,964         13,212
                                                                                       --------       --------

Stockholders' equity:
  Common stock; $.01 par value; 50,000,000 shares authorized; issued shares -
    17,383,133 and 17,383,133, respectively and
    outstanding shares - 17,339,255 and 17,293,622,  respectively                           174            174
  Additional paid-in capital                                                             56,128         56,308
  Accumulated deficit                                                                   (42,190)       (34,561)
  Currency translation adjustment                                                            17              2
  Common stock in treasury at cost - 43,878 and 89,511 shares, respectively                 (80)          (214)
                                                                                       --------       --------
        Total stockholders' equity                                                       14,049         21,709
                                                                                       --------       --------

        Total liabilities and stockholders' equity                                     $ 28,013       $ 34,921
                                                                                       ========       ========
</TABLE>

            See accompanying notes to condensed financial statements.

                                       3
<PAGE>   4
                        FLEXIINTERNATIONAL SOFTWARE, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
  
<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                       1999           1998
                                                       ----           ----
                                                     unaudited)    (unaudited)
<S>                                                  <C>            <C>     
Revenues:
  Software license                                   $  1,055       $  4,687
  Service and maintenance                               3,281          2,821
                                                     --------       --------
        Total revenues                                  4,336          7,508

Cost of revenues:
  Software license                                         68            467
  Service and maintenance                               2,601          1,753
                                                     --------       --------
        Total cost of revenues                          2,669          2,220

Operating expenses:
  Sales and marketing                                   2,461          2,143
  Product development                                   2,686          2,022
  General and administrative                            2,249            612
  Restructuring charge (See Note 5)                     1,896             -- 
                                                     --------       --------
Total operating expenses                                9,292          4,777
                                                     --------       --------

Operating (loss) income                                (7,625)           511
Interest income                                           104            286
Interest expense                                          (30)           (13)
                                                     --------       --------
(Loss) income before provision for income taxes        (7,551)           784
Provision for income taxes                                 --             --
                                                     --------       --------

Net (loss) income                                    $ (7,551)      $    784
                                                     ========       ========

Net (loss) income per share:
  Basic                                              $  (0.44)      $   0.05
  Diluted                                            $  (0.44)      $   0.05
Weighted average shares:
  Basic                                                17,339         16,500
  Diluted                                              17,339         17,287
</TABLE>




            See accompanying notes to condensed financial statements.

                                       4

<PAGE>   5
                        FLEXIINTERNATIONAL SOFTWARE, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                       1999           1998
                                                       ----           ----
                                                     unaudited)    (unaudited)
<S>                                                   <C>            <C>     
Cash flows from operating activities:
Net (loss) income                                    $ (7,551)      $    784
Non-cash items included in net (loss) income:
   Depreciation and amortization                          744            167
   Provision for doubtful accounts                        602             --
Change in operating accounts:
   Accounts receivable                                  2,171         (2,119)
   Prepaid expenses and other assets                      170            367
   Accounts payable and accrued expenses               (2,444)          (717)
   Accrued restructuring                                1,211             --
   Deferred revenue                                       131           (596)
                                                     --------       --------
Net cash used in operating activities                  (4,966)        (2,114)

Cash flows from investing activities:
Proceeds from sales of property and equipment              29             --
Purchase of property and equipment                       (105)          (113)
                                                     --------       --------
Net cash used in investing activities                     (76)          (113)

Cash flows from financing activities:
  Purchase of short-term investments                       --         (4,412)
  Proceeds from line of credit                          2,000             --
  Proceeds from employee stock purchase plan               56             --
  Proceeds from exercise of stock options
     and warrants                                          --             26
  Payments of capital lease obligations                  (156)           (31)
                                                     --------       --------
Net cash provided by (used in) financing
     activities                                         1,900         (4,417)
                                                     --------       --------

Effect of exchange rate changes on cash                    37             --
                                                     --------       --------

Decrease in cash and cash equivalents                  (3,105)        (6,644)
                                                     --------       --------
Cash and cash equivalents at beginning of period        7,876         24,622
                                                     --------       --------
Cash and cash equivalents at end of period           $  4,771       $ 17,978
                                                     ========       ========
</TABLE>








            See accompanying notes to condensed financial statements.

                                       5
<PAGE>   6
                        FLEXIINTERNATIONAL SOFTWARE, INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                       Total                      
                                   Common Stock    Additional                Currency               stockholders'
                                 ----------------   paid-in    Accumulated  translation   Treasury     equity     Comprehensive
                                 Shares    Amount   capital      deficit    adjustment      stock     (deficit)       income
                               ----------  ------   -------      -------    ----------      -----     ---------       ------
<S>                            <C>          <C>     <C>         <C>          <C>          <C>        <C>       
Balance at December 31, 1998   17,383,133   $ 174   $ 56,308    $ (34,561)     $  2        $ (214)     $ 21,709
  Shares issued for ESPP               --      --         --          (78)       --           134            56
  Cancellation of options                                                                            
     issued in conjunction                                                                           
     with the acquisition                                                                            
     of The Dodge Group                --      --       (180)          --        --            --          (180)
  Net loss                             --      --         --       (7,551)       --            --        (7,551)     $(7,551)
  Currency translation                                                                               
     adjustment                        --      --         --           --        15            --            15           15
                                                                                                                     -------
Comprehensive Income                   --      --         --           --        --            --           --       $(7,536)
                               ----------   -----   --------    ---------      ----        ------      --------      ======= 
                                                                                                     
Balance at March 31, 1999      17,383,133   $ 174   $ 56,128    $ (42,190)     $ 17        $  (80)     $ 14,049
                               ==========   =====   ========    =========      ====        ======      ========
</TABLE>



















            See accompanying notes to condensed financial statements.

                                       6
<PAGE>   7
                        FLEXIINTERNATIONAL SOFTWARE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, the Company believes that the
disclosures are adequate to make the information presented not misleading. These
condensed consolidated financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.

The unaudited condensed consolidated financial statements include the accounts
of FlexiInternational Software, Inc. and its subsidiaries and reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management, necessary to state fairly the results for the three month
period ended March 31, 1999. The results for the three month period ended March
31, 1999 are not necessarily indicative of the results expected for the full
year.

NOTE 2 - EARNINGS PER SHARE

Basic earnings per share includes no dilution and is computed by dividing net
income (loss) available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the earnings of an
entity, similar to fully diluted earnings per share. The Company has presented
basic and diluted income (loss) per share for all periods. The difference
between the number of shares used in the basic per share calculation compared to
the diluted per share calculation for the three months ended March 31, 1998 is
due to the dilutive effect of outstanding stock options and warrants. The number
of shares used in the March 31, 1999 diluted per share calculation does not 
include the effect of outstanding stock options, as the effect would be 
anti-dilutive.

NOTE 3 - REVENUE RECOGNITION

The Company licenses software under noncancellable license agreements through
direct and indirect channels, and provides services including maintenance,
training and consulting. Effective January 1, 1998, the Company has adopted SOP
97-2 "Software Revenue Recognition". The adoption of SOP 97-2 had no material
impact on the financial statements. Software license revenues through the
Company's direct sales channel and guaranteed minimum royalties through its
indirect sales channel are recognized when a noncancellable license agreement
has been signed, the product has been delivered and installed, collection is
considered probable by management and all significant contractual obligations
have been satisfied. Other software license royalties earned through the
Company's indirect sales channel are recognized as such fees are reported to the
Company. Revenues on all software license transactions in which there are
significant outstanding obligations are not recognized until such obligations
are fulfilled. Maintenance revenues for maintaining, supporting and providing
periodic upgrading are deferred and recognized ratably over the maintenance
period, generally one year. Revenues from training and consulting services are
recognized as such services are performed. The Company does not require
collateral for its receivables, and reserves are maintained for potential
losses.

NOTE 4 - ACQUISITION

On June 24, 1998, the Company completed the acquisition of The Dodge Group, Inc.
("Dodge"), a software developer that specializes in financial data warehouse
solutions. As a result of the acquisition, the company wrote off $1,890 for
acquired in-process research and development in the June 1998 quarter.

The following table reflects pro forma combined results of operations
(unaudited) of the Company and Dodge, giving effect to the acquisition of Dodge
at the beginning of the fiscal year 1998, for all periods presented, and
excludes the one-time in-process research and development charge of $1,890 for
the periods presented:



                                       7
<PAGE>   8

<TABLE>
<CAPTION>
                                            Three Months Ended March 31, 
                                            ---------------------------- 
                                              1999               1998
                                              ----               ----
                                                    (unaudited)
<S>                                        <C>                <C>     
Revenue                                    $  4,336           $  9,650
Net loss                                   $ (7,551)          $   (400)
Net loss per diluted common share          $  (0.44)          $  (0.02)
Shares used in computation                   17,339             17,363
</TABLE>


NOTE 5 - RESTRUCTURING CHARGE

On February 26, 1999, management, with the approval of the Board of Directors,
took certain actions to reduce employee headcount in order to align its sales,
development and administrative organization with the current overall
organization structure, and to position the Company for profitable growth in the
future consistent with management's long term objectives. In this regard, the
primary actions taken include involuntary terminations of selected personnel.
Severance packages were offered to 66 employees. This reduction in headcount
also led to the Company having excess leased facility space. As a result of
these actions, the Company recorded a charge to operations during the three
month period ended March 31, 1999 of $1,896. Of the total amount of this charge,
$1,730 was related to severance costs, of which $667 was paid during the three
month period ended March 31, 1999 and $166 related to costs of idle facility
space, of which $18 was paid during the three month period ended March 31, 1999.
The remaining balance of the severance costs, $1,063 will be payable in
installments for up to two years. The Company believes that these actions
resulted in sustainable cost savings, primarily through the elimination of
redundant functions in product development, due to completion of development
work on FlexiFinancials Release 4, and to a lesser extent in the support and
sales organizations.

Detail of the restructuring charge is as follows:

<TABLE>
<CAPTION>
                            Severance           Excess
                           & benefits         facilities           Total
                           ----------         ----------           -----
<S>                         <C>                <C>                <C>    
Reserve balances,
February 26, 1999           $ 1,730            $   166            $ 1,896

Cash charges                   (667)               (18)              (685)
                            -------            -------            -------

Reserve balances,
March 31, 1999              $ 1,063            $   148            $ 1,211
                            =======            =======            =======
</TABLE>















                                       8
<PAGE>   9

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


FORWARD-LOOKING STATEMENTS

      In addition to historical information, this Quarterly Report contains
forward-looking statements. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," and similar expressions are intended to identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's opinions only as of
the date hereof. The Company undertakes no obligation to revise or publicly
release the results of any revision to these forward-looking statements. Readers
should carefully review the risk factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Annual Report on Form 10-K for the year ended December 31, 1998.

RESULTS OF OPERATIONS

      Revenues. Total revenues, consisting of software license revenues and
service and maintenance revenues, decreased 42.2%, from $7.5 million for the
three months ended March 31, 1998 to $4.3 million for the three months ended
March 31, 1999. Two customers provided approximately 25.5% and 46.5% of the
total revenues for the three months ended March 31, 1999 and 1998, respectively.

      Software license revenues decreased 77.5%, from $4.7 million for the three
months ended March 31, 1998 to $1.1 million for the three months ended March 31,
1999. The Company believes that the decline in software license revenue was
primarily due to continued delays in companies' buying decisions as a result of
their focus on Year 2000 issues. Service and maintenance revenues increased
16.3%, from $2.8 million for the three months ended March 31, 1998 to $3.3
million for the three months ended March 31, 1999. The increase was primarily
attributable to the growth of the installed base of customers, which resulted in
an increased maintenance revenue stream.

      Cost of Revenues. The Company's cost of revenues consists of cost of
software license revenues and cost of service and maintenance revenues. Cost of
software license revenues consists primarily of the cost of third-party software
products distributed by the Company and the cost of product media, manuals and
shipping. Cost of service and maintenance revenues consists of costs to provide
customers with consulting, implementation, training , software maintenance and
technical support services, and periodic upgrades of software.

      Cost of software license revenues decreased 85.4%, from $467,000 for the
three months ended March 31, 1998 to $68,000 for the three months ended March
31, 1999. Cost of software license revenues as a percentage of software license
revenues decreased from 10.0% for the three months ended March 31, 1998 to 6.4%
for the three months ended March 31, 1999. The decrease in cost of software
license revenues in dollar amount was primarily attributable to lower
third-party license fee revenues which resulted in lower royalties.

      Cost of service and maintenance revenues increased 48.4%, from $1.8
million for the three months ended March 31, 1998 to $2.6 million for the three
months ended March 31, 1999. Cost of service and maintenance revenues as a
percentage of service and maintenance revenues increased from 62.1% for the
three months ended March 31, 1998 to 79.3% for the three months ended March 31,
1999. The increase in dollar amount resulted primarily from the addition of
service consultants and customer support personnel to provide services to a
larger customer base. The increase as a percentage of service and maintenance
revenues was due to lower utilization of the Company's consulting staff. The
Company has taken actions to bring the cost of service and maintenance into line
with anticipated service and maintenance revenues. As a result, the Company
anticipates cost of service and maintenance revenues to decrease in subsequent
quarters (See Note 5).

      Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions, travel and promotional expenses, and facility and
communication costs for direct sales offices. Sales and marketing expenses
increased 14.8%, from $2.1 million for the three months ended March 31, 1998 to
$2.5 million for the three months ended March 31, 1999. The increase in dollar
amount was primarily attributable to higher average headcount levels in during
the three months ended March 31, 1999 versus the three months ended March 31,
1998. Sales and marketing expenses as a percentage of total revenues increased
from 28.5% for the three months ended March 31, 1998 to 56.8% for the three
months ended March 31, 1999 due to a lower revenue base. The Company has taken
action to align its sales and marketing costs with its anticipated revenues. As
a result, the Company anticipates sales and marketing expenses to decrease in
subsequent quarters (See Note 5).



                                       9
<PAGE>   10

      Product Development. Product development expenses include software
development costs and consist primarily of engineering personnel costs.

      Product development expenses increased 32.8%, from $2.0 million for the
three months ended March 31, 1998 to $2.7 million for the three months ended
March 31, 1999. The increase in product development expenses was due primarily
to the increase in development staff needed to complete work on the Company's
latest version of its software. The Company has subsequently reduced its 
development staff to the level needed to maintain and enhance the products
as necessary. As a result, the Company anticipates development expenses to
decrease in subsequent quarters (See Note 5). Product development expenses as a
percentage of total revenues increased from 26.9% for the three months ended
March 31, 1998 to 61.9% for the three months ended March 31, 1999 due to the
lower revenue base.

      General and Administrative. General and administrative expenses consist
primarily of salaries of executive, administrative and financial personnel, as
well as provisions for doubtful accounts, amortization of acquired software and
goodwill and outside professional fees. General and administrative expenses
increased 267.5%, from $612,000 for the three months ended March 31, 1998 to
$2.2 million for the three months ended March 31, 1999. The increase was
primarily attributable to an increase in the reserve for bad debts, commencement
of amortization of acquired software and goodwill associated with the June 1998
acquisition of The Dodge Group and an increase in administrative personnel as a
result of The Dodge Group acquisition. General and administrative expenses as a
percentage of total revenues increased from 8.2% for the three months ended
March 31, 1998 to 51.9% for the three months ended March 31, 1999 due to the
increased expenses and lower revenue base. The Company has taken actions to
reduce the ongoing general and administrative expenses.

      Provision for Income Taxes. No provision or benefit for federal, state or
foreign income taxes was made for the three month periods ended March 31, 1999
and 1998. The Company has reported only annual tax losses to date and
consequently has approximately $31.0 million and $7.3 million of U.S. and
foreign net operating loss carryforwards, respectively, which expire at various
times through the year 2018, available to offset future taxable income. The
utilization of such net operating losses is subject to limitations as a result
of ownership changes. The annual limitation and the timing of attaining
profitability will result in the expiration of net operating loss carryforwards
before utilization.

      Net (Loss) Income and (Loss) Income per Share. The net loss for the three
month period ended March 31, 1999, was ($7.5) million or ($0.44) per basic and
diluted share. Excluding the one-time restructuring charge of $1.9 million the
net loss for the three month period ended March 31, 1999 was ($5.7) million or
($0.33) per basic and diluted share. This compares to net income of $784,000 or
$0.05 per basic and diluted share for the three month period ended March 31,
1998, as reflected in the following table:

<TABLE>
<CAPTION>
                                              Three Months Ended March 31,
                                        -------------------------------------
                                        1999             1999*           1998
                                        ----             -----           ----
                                     (unaudited)      (unaudited)    (unaudited)
                                       (in thousands, except per share amounts)

<S>                                   <C>              <C>               <C>   
      Net (loss) income               $(7,551)         $(5,655)          $  784

      Net (loss) income per share:

           Basic                      $ (0.44)         $ (0.33)          $ 0.05
           Diluted                    $ (0.44)         $ (0.33)          $ 0.05
</TABLE>

    *   Excludes one-time restructuring charge of $1.9 million.


LIQUIDITY AND CAPITAL RESOURCES

      Since its inception, the Company has primarily financed its operations
through private placements of its stock to private investors, issuances of
convertible promissory notes and loans, equipment financing and traditional
borrowing arrangements, and in December 1997, an initial public offering of its
Common Stock, resulting in net proceeds to the Company of approximately $22.2
million.


                                       10
<PAGE>   11

      As of March 31, 1999, the Company had cash and cash equivalents of $4.8
million, a decrease of $3.1 million from December 31, 1998. The Company also had
$3.0 million in short-term marketable securities at March 31, 1999 and December
31, 1998. The Company's working capital at March 31, 1999 was $5.4 million,
compared to $12.6 million at December 31, 1998.

      The Company's operating activities resulted in net cash outflow of $5.0
million for the three months March 31, 1999, principally from the net operating
loss. Investing activities, consisting of capital expenditures, resulted in net
cash outflow of $76,000 for the three months ended March 31, 1999. The Company's
financing activities resulted in a net cash inflow for the three months ended
March 31, 1999 of $1.9 million, principally from the proceeds from borrowings
against the Company's line of credit.

      The Company's Board of Directors has adopted a share repurchase program
authorizing the Company to purchase up to 1.0 million shares of its common stock
on the open market. As of March 31, 1999 the Company has purchased 135,000
common shares at a total cost of $463,000.

      The Company has a working capital revolving line of credit with a bank,
which is secured by the Company's accounts receivable. The amount available
under this facility is limited to the lesser of 80% of the Company's eligible
accounts receivable, or $5.0 million. The facility will expire on May 17, 1999,
unless renewed. The Company is currently in negotiations with the bank, and the
Company expects that it will be successful in renewing the facility, although
there is no guarantee this will happen. At March 31, 1999 the company had $2.0
million outstanding under this line of credit, which was subsequently repaid
after quarter end.

      The Company believes that cash and cash equivalents, cash generated
internally by operations, will be sufficient to meet the Company's working
capital requirements for at least the next twelve months.


YEAR 2000 COMPLIANCE

      The year 2000 issue relates to computer programs and systems that
recognize dates using two-digit year data rather than four-digit year data.
These programs and systems may fail or provide incorrect information when using
dates after December 31, 1999. If the year 2000 issue disrupts our internal
information technology systems, or the information technology systems of
companies with whom we have significant commercial relationships, our business
and financial condition could be materially adversely affected.

      The year 2000 issue may affect three areas of our business: (1) the design
of our products, (2) our internal computer systems, and (3) the computer systems
of our significant suppliers or customers. Each area is addressed below.

      1. YEAR 2000 COMPLIANCE OF OUR PRODUCTS. In as much as no test of year
2000 compliance can simulate the actual change of the millennium, we cannot
assure you that our products will be unaffected by the year 2000. From the
beginning, our products have been designed and tested to be year 2000 compliant,
and we design new products, and any updates of existing products, to be year
2000 compliant. However, failures that cannot be detected using currently
available compliance testing could have a material adverse effect on our
business and financial condition.

      2. YEAR 2000 COMPLIANCE OF OUR INTERNAL SYSTEMS. Our internal computer
programs and operating systems relate to virtually all segments of our business,
including:

            *    merchandising
            *    customer database management 
            *    marketing 
            *    order processing 
            *    order fulfillment 
            *    contract management
            *    customer service
            *    financial reporting

These applications are currently, or are expected to be, year 2000 compliant.
Nonetheless, we are requesting compliance statements from any parties that
service and supply these applications. We intend to evaluate any risks disclosed
in their responses and, if necessary, consider possible alternative sources.




                                       11
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      3. YEAR 2000 COMPLIANCE OF THIRD-PARTY SYSTEMS. The computer programs and
operating systems used by entities with whom we have commercial relationships
pose potential problems relating to the year 2000 issue, which may affect our
operations in a variety of ways. These risks are more difficult to assess than
those posed by internal programs and systems. We rely on third parties for some
of the software code or programs that are embedded in, or work with, our
products. We are assessing whether the functionality of our products would be
materially diminished by a failure of such third-party software to be year 2000
compliant. There can be no assurance that we may not experience unanticipated
expenses or be otherwise adversely impacted by a failure of third-party systems
or software to be year 2000 compliant. The most reasonably likely worst-case
scenarios may include: (i) corruption of data contained in our internal
information systems, (ii) hardware failure, and (iii) failure of infrastructure
services provided by utilities or government. We intend to include an evaluation
of these scenarios in our plan for assessing the programs and systems of the
entities with whom we have commercial relationships.

     We have formed a management team assigned with the task of assessing the
programs and systems of the entities with whom we have commercial relationships;
questionnaires have been sent out and responses are being evaluated for possible
next steps. We expect to complete this phase of assessment and identify related
risks and uncertainties by the end of the second quarter of fiscal 1999. Once we
have identified the risks and uncertainties, we intend to resolve any material
risks and uncertainties by communicating further with the relevant vendors and
providers, by working internally to identify alternative sourcing and by
formulating contingency plans to deal with those risks and uncertainties. To
date, however, we have not formulated such a contingency plan. We expect the
resolution of material risks and uncertainties to be an ongoing process until
all year 2000 problems are satisfactorily resolved. We do not currently
anticipate that the total cost of any year 2000 remediation efforts that may be
needed will be material.

EUROPEAN MONETARY UNION ("EMU")

      The Company's internal business information systems are comprised of the
same commercial application software products generally offered for license by
the Company to end user customers. The Company's latest software release
contains EMU functionality that allows for dual currency reporting and
information management. The Company is not aware of any material operational
issues or costs associated with preparing internal systems for the EMU. However,
the Company utilizes other third party software products that may or may not be
EMU compliant. Although the Company is currently taking steps to address the
impact, if any, of EMU compliance for such third party products, failure of any
critical technology components to operate properly post EMU may have an adverse
impact on business operations or require the Company to incur unanticipated
expenses to remedy any problems.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      Market risk refers to the potential effects of unfavorable changes in
certain prices and rates on Company's financial results and conditions,
primarily foreign currency exchange rates and interest rates on marketable
securities. The Company does not utilize derivative instruments in managing its
exposure to such changes. The Company does not believe that near-term changes
in foreign currency exchange rates or interest rates will have a material
effect on its future earnings, fair values or cash flows.

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PART II.  OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

          (d) Use of Proceeds.

          (1)  The Company's registration statement on Form S-1 under the
               Securities Act of 1933, as amended, (File No. 333-38403) for the
               Company's initial public offering, the use of proceeds of which
               is herein reported, was declared effective as of December 11,
               1997.

          (4) (vii)  The Company used approximately $15.6 million of the
                     proceeds from the initial public offering for ongoing
                     operations of the Company ($13.4 million), for the
                     purchase and installation of property and equipment ($1.0
                     million), the payments of convertible notes payable in
                     connection with the Dodge acquisition ($754,000), and the
                     purchase 135,000 shares ($463,000) of its common stock on
                     the open market under the Company's share repurchase
                     program. Payment of these expenses were to persons other
                     than (a) directors or officers of the Company or their
                     associates, (b) persons owning 10% or more of the equity
                     securities of the Company or (c) affiliates of the
                     Company.
        
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

       (a)    Exhibits

              3.1    Amended and Restated Certificate of Incorporation

              3.2    Amended and Restated By-Laws

              10.1   Severance and Settlement Agreement and Release dated
                     February 2, 1999 between the Registrant and Jennifer V.
                     Cheng.

              10.2   Severance and Settlement Agreement and Release dated
                     February 2, 1999 between the Registrant and James W.
                     Schenck.

              10.3   Amendment of Options dated May 12, 1999 between the
                     Registrant and Jennifer V. Cheng.

              10.4   Amendment of Options dated May 12, 1999 between the
                     Registrant and James W. Schenck.

              27.1   Financial Data Schedule

       (b)    Reports on Form 8-K

              None



                                    SIGNATURE


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

                                            FLEXIINTERNATIONAL SOFTWARE, INC.



                                            By: /s/ Stefan R. Bothe
                                                -------------------------------
                                                Stefan R. Bothe, Chairman & CEO

Date: May 14, 1999







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<PAGE>   14


                                  EXHIBIT INDEX

      EXHIBIT                                 
        NO.                        DESCRIPTION
      -------                      -----------

       3.1    Amended and Restated Certificate of Incorporation of the
              Registrant is incorporated herein by reference to Exhibit 3.2 to
              the Registrant's Registration Statement on Form S-1, as amended
              (File No 333-38403) (the "Form S-1").

       3.2    Amended and Restated By-Laws of the Registrant is incorporated
              herein by reference to Exhibit 3.4 to the Form S-1.

       10.1   Severance and Settlement Agreement and Release dated February 2,
              1999 between the Registrant and Jennifer V. Cheng.


       10.2   Severance and Settlement Agreement and Release dated February 2,
              1999 between the Registrant and James W. Schenck.

       10.3   Amendment of Options dated May 12, 1999 between the Registrant and
              Jennifer V. Cheng.

       10.4   Amendment of Options dated May 12, 1999 between the Registrant and
              James W. Schenck.

       27.1   Financial Data Schedule (three month period ended March 31, 1999).




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