<PAGE>   1


                                   FORM 10-Q/A

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                 AMENDMENT NO. 1

(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>
<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


RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION

As a result of the Company's regular quarterly financial statement review with
its independent accountants in the second quarter of 1999, the Company
determined that it would restate the amounts originally reported for 1998 and
the first quarter of 1999, to reflect a change in the revenue recognition for
several software license contracts. Most of the restated amounts relate to two
contracts that the Company believes were appropriately due and payable under
their contractual terms but payments with respect to which, in the second
quarter of 1999, became subject to dispute by the contracting parties. The
Company has restated its financial statements for the quarter ended March 31,
1999 (See Note 6 to the Company's condensed consolidated financial statements).

This Amendment No. 1 of Quarterly Report on Form 10Q/A amends and restates Items
1 and 2 and Exhibit 27.1 of the Company's Quarterly Report on Form 10-Q filed on
May 17, 1999 for the quarter ended March 31, 1999.




                                       2

<PAGE>   3


                        FLEXIINTERNATIONAL SOFTWARE, INC.

                                TABLE OF CONTENTS



                                                                           PAGE
                                                                           ----

PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements
            Condensed Consolidated Balance Sheet...........................  4
            Condensed Consolidated Statement of Operations.................  5
            Condensed Consolidated Statement of Cash Flows.................  6
            Condensed Consolidated Statement of Stockholders' Equity.......  7
            Notes to Condensed Consolidated Financial Statements...........  8
Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations............................... 11


PART II. OTHER INFORMATION
         Signature......................................................... 15



                                       3
<PAGE>   4


PART I.  FINANCIAL INFORMATION

ITEM 1.  CONDENSED FINANCIAL STATEMENTS


                        FLEXIINTERNATIONAL SOFTWARE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)
                             (RESTATED, SEE NOTE 6)

<TABLE>
<CAPTION>
                                                                                            March 31,     December 31,
                                                                                              1999           1998
                                                                                            ---------     ------------
                                                                                                           (audited)
<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                                                    8,842          11,041
  Prepaid expenses and other current assets                                                      658             999
                                                                                            --------        --------
        Total current assets                                                                  17,271          22,916

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 (see Note 4)                                                   1,836           1,944
Goodwill, net of accumulated amortization of $849 and $566, respectively (see Note 4)          4,818           5,101
Other assets                                                                                     208             218
                                                                                            --------        --------

        Total assets                                                                        $ 26,588        $ 32,911
                                                                                            ========        ========
         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                                          $  2,001        $  3,199
  Accrued commissions                                                                            370             725
  Accrued restructuring costs (see Note 5)                                                     1,211              --
  Accrued expenses - other                                                                     2,605           3,483
  Current portion of capital lease obligations                                                   594             586
  Short-term debt                                                                              2,000              --
  Deferred revenues                                                                            8,487           7,426
                                                                                            --------        --------
        Total current liabilities                                                             17,268          15,419

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

        Total liabilities                                                                     17,982          16,297
                                                                                            --------        --------

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                                                                        (47,633)        (39,656)
  Currency translation adjustment                                                                 17               2
  Common stock in treasury at cost - 43,878 and 89,511 shares, respectively                      (80)           (214)
                                                                                            --------        --------
        Total stockholders' equity                                                             8,606          16,614
                                                                                            --------        --------

        Total liabilities and stockholders' equity                                          $ 26,588        $ 32,911
                                                                                            ========        ========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5


                        FLEXIINTERNATIONAL SOFTWARE, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)
                             (RESTATED, SEE NOTE 6)



<TABLE>
<CAPTION>
                                            Three Months Ended March 31,
                                            ---------------------------
                                               1999             1998
                                            ---------        ----------
<S>                                          <C>             <C>
Revenues:
  Software license                           $    855        $  2,687
  Service and maintenance                       3,133           2,821
                                             --------        --------
        Total revenues                          3,988           5,508

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                                 (7,973)         (1,489)
Interest income                                   104             286
Interest expense                                  (30)            (13)
                                             --------        --------
Loss before provision for income taxes         (7,899)         (1,216)
Provision for income taxes                         --              --
                                             --------        --------

Net loss                                     $ (7,899)       $ (1,216)
                                             ========        ========

Net loss per share:
  Basic                                      $  (0.46)       $  (0.07)
  Diluted                                    $  (0.46)       $  (0.07)
Weighted average shares:
  Basic                                        17,339          16,500
  Diluted                                      17,339          16,500
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6


                        FLEXIINTERNATIONAL SOFTWARE, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
                             (RESTATED, SEE NOTE 6)

<TABLE>
<CAPTION>
                                                             Three Months Ended March 31,
                                                             ----------------------------
                                                                1999             1998
                                                             ---------        -----------
<S>                                                           <C>             <C>
Cash flows from operating activities:
Net loss                                                      $(7,899)        $ (1,216)
Non-cash items included in net loss:
   Depreciation and amortization                                  744              167
   Provision for doubtful accounts                                602               --
Change in operating accounts:
   Accounts receivable                                          1,586             (119)
   Prepaid expenses and other assets                              170              367
   Accounts payable and accrued expenses                       (2,444)            (717)
   Accrued restructuring                                        1,211               --
   Deferred revenue                                             1,064             (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 consolidated financial statements.


                                       6
<PAGE>   7


                        FLEXIINTERNATIONAL SOFTWARE, INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)
                             (RESTATED, SEE NOTE 6)


<TABLE>
<CAPTION>
                                                Common Stock         Additional                         Currency
                                            -------------------       paid-in         Accumulated      translation        Treasury
                                            Shares       Amount       capital           deficit         adjustment          stock
                                            ------       ------      ----------       -----------      -----------        ---------
<S>                                       <C>             <C>         <C>              <C>                <C>              <C>
Balance at December 31, 1998              17,383,133      $ 174       $ 56,308         $(39,656)          $  2             $(214)
  Shares issued for ESPP                           -          -              -              (78)             -               134
  Cancellation of options issued in
     conjunction with the acquisition
     of The Dodge Group                            -          -           (180)               -              -                 -
  Net loss                                         -          -              -           (7,899)             -                 -
  Currency translation adjustment                  -          -              -                -             15                 -

Comprehensive income (loss)                        -          -              -                -              -                 -
                                          ----------      -----       --------         --------           ----             -----

Balance at March 31, 1999                 17,383,133      $ 174       $ 56,128         $(47,633)          $ 17             $ (80)
                                          ==========      =====       ========         ========           ====             =====


                                            Total
                                         stockholders'    Comprehensive
                                       equity (deficit)   income (loss)
                                       ----------------   -------------

Balance at December 31, 1998              $  16,614
  Shares issued for ESPP                         56
  Cancellation of options issued in
     conjunction with the acquisition
     of The Dodge Group                        (180)
  Net loss                                   (7,899)        $ (7,899)
  Currency translation adjustment                15               15
                                                            --------
Comprehensive income (loss)                       -         $ (7,884)
                                          ---------         ========

Balance at March 31, 1999                 $   8,606
                                          =========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.



                                       7
<PAGE>   8


                        FLEXIINTERNATIONAL SOFTWARE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION. The
condensed consolidated financial statements contain previously reported amounts
that have been restated to reflect a change in the revenue recognition for
certain contracts (see Note 6).

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, as amended.

The unaudited condensed consolidated financial statements included herein
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 - LOSS PER SHARE

Basic loss per share includes no dilution and is computed by dividing net loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted loss per share reflects the potential
dilution of securities that could share in the earnings of an entity. The
Company has presented basic and diluted loss per share for all periods. The
number of shares used in the March 31, 1999 and 1998 diluted per share
calculations do 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". Software license revenues through the
Company's direct sales channel are recognized when persuasive evidence of an
arrangement exists, the licensed products have been shipped, fees are fixed and
determinable and collectibility is considered probable. Customers may elect to
receive the licensed products pre-loaded and configured on a hardware unit. In
this case, revenue is recognized when the licensed products are installed on the
hardware unit, the unit is shipped and all other criteria are met. 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.

During the second quarter of 1999, the Company reviewed its revenue recognition
policies for multiple element arrangements. For such arrangements with extended
payment terms, or where a significant portion of the payment is due after
inception of the license agreement, all revenue is deferred until the final
portion of the license fee becomes due and payable, and all other criteria are
met at that time.



                                       8
<PAGE>   9


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 $1.9 million
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 $1.9 million
for the periods presented (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                 Three Months Ended March 31,
                                                 ----------------------------
                                                   1999               1998
                                                 --------          ----------
                                                         (unaudited)
<S>                                              <C>               <C>
Revenue                                          $  3,988          $  7,650
Net loss                                         $ (7,899)         $ (2,400)
Net loss per diluted common share                $  (0.46)         $  (0.15)
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 $1.9 million. Of the total amount of this
charge, $1.7 million was related to severance costs, of which $667,000 was paid
during the three month period ended March 31, 1999 and $166,000 related to costs
of idle facility space, of which $18,000 was paid during the three month period
ended March 31, 1999. The remaining balance of the severance costs, $1.1 million
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 (in thousands):

<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>

NOTE 6 - RESTATEMENT

As a result of the Company's regular quarterly financial statement review with
its independent accountants in the second quarter of 1999, the Company
determined that it would restate the prior period amounts originally reported
for 1998 and the first quarter of 1999, to reflect a change in the revenue
recognition for several software license contracts. Most of the restated amounts
relate to two contracts that the Company believes were appropriately due and
payable under their contractual terms but payments with respect to which, in the
second quarter of 1999 became subject to dispute by the contracting parties. For
revenue which has been restated in the three months ended March 31, 1998 and
1999, all amounts billed are included in accounts receivable as of March 31,
1998 and 1999, with a corresponding offset included in deferred revenues. Any
amounts stipulated in contracts which have not been


                                       9

<PAGE>   10


invoiced have not been recognized in the financial statements. A summary
(unaudited) of the effects of the restatement follows (in thousands, except per
share amounts):

<TABLE>
<CAPTION>

                                             Three Months Ended                 Three Months Ended
                                               March 31, 1999                     March 31, 1998
                                          -----------------------            ------------------------
                                          As Reported    Restated            As Reported     Restated
                                          -----------    --------            -----------     --------
<S>                                         <C>          <C>                   <C>           <C>
STATEMENT OF OPERATIONS:
Software license revenue                    $ 1,055      $   855               $ 4,687       $ 2,687
Service and maintenance revenue               3,281        3,133                 2,821         2,821
Total revenues                                4,336        3,988                 7,508         5,508
Operating income (loss)                      (7,625)      (7,973)                  511        (1,489)
Net income (loss)                            (7,551)      (7,899)                  784        (1,216)
Net income (loss) per share:
  Basic                                     $ (0.44)     $ (0.46)              $  0.05       $ (0.07)
  Diluted                                   $ (0.44)     $ (0.46)              $  0.05       $ (0.07)
Weighted average shares:
  Diluted                                    17,339       17,339                17,287        16,500
</TABLE>

<TABLE>
<CAPTION>
                                               March 31, 1999                   December 31, 1998
                                            ---------------------             -----------------------
                                            As Reported  Restated             As Reported    Restated
                                            -----------  --------             -----------    --------
<S>                                         <C>          <C>                  <C>           <C>
BALANCE SHEET:
Accounts receivable, net of allowance for
 doubtful accounts                          $ 10,267     $ 8,842              $ 13,051      $ 11,041
Total current assets                          18,696      17,271                24,926        22,916
Total assets                                  28,013      26,588                34,921        32,911
Deferred revenues                              4,469       8,487                 4,341         7,426
Current liabilities                           13,250      17,268                12,334        15,419
Total liabilities                             13,964      17,982                13,212        16,297
Accumulated deficit                          (42,190)    (47,633)              (34,561)      (39,656)
Total stockholders' equity                    14,049       8,606                21,709        16,614
Total liabilities and stockholders' equity    28,013      26,588                34,921        32,911
</TABLE>


NOTE 7 - SUBSEQUENT EVENTS - GOING CONCERN

Late in the second quarter of 1999, management identified a number of factors
that cause them to believe that available cash resources may not be sufficient
to fund anticipated operating losses. These include: (1) the continued general
business slowdown, which resulted in revenue levels significantly lower than
expected in the first half of 1999; (2) payment disputes that arose in the
second quarter of 1999 related to two significant contracts for licensing of
software and provision of services (see Note 6) and; (3) delays experienced in
the second quarter of 1999 related to the release of the next version of the
Company's general ledger product. Management has taken actions to reduce costs
in response to lower revenues and is prepared to take further actions, if
necessary, in order to continue to respond to competitive and economic pressures
in the marketplace. Management is also seeking to obtain additional equity
capital. However, there can be no assurance that the Company will be able to
reduce costs to a level to appropriately respond to competitive pressures or to
obtain additional funding. As a result of the foregoing, there exists
substantial doubt about the Company's ability to continue as a going concern.
These financial statements do not include any adjustments relating to the
recoverability of the carrying amount of recorded assets or the amounts of
liabilities that might result from the outcome of this uncertainty.



                                       10
<PAGE>   11


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
(amendment pending to give effect to restatement).

RESULTS OF OPERATIONS

     Restatement. The condensed consolidated financial statements included and
discussed herein contain amounts which have been restated to reflect a change in
the original revenue recognition for certain contracts. (See Note 6 to the
condensed consolidated financial statements for effects of the restatement.) The
appropriate amounts below reflect the restatement.

     Revenues. Total revenues, consisting of software license revenues and
service and maintenance revenues, decreased 27.6%, from $5.5 million for the
three months ended March 31, 1998 to $4.0 million for the three months ended
March 31, 1999. One customer provided approximately 13.9% and three customers
provided approximately 54.0% of the total revenues for the three months ended
March 31, 1999 and 1998, respectively.

     Software license revenues decreased 68.2%, from $2.7 million for the three
months ended March 31, 1998 to $0.9 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
11.1%, from $2.8 million for the three months ended March 31, 1998 to $3.1
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 17.4% for the three months ended March 31, 1998 to 8.0%
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 83.0% 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 during the
three months ended March 31, 1999 versus the three months ended March 31, 1998.
Sales and marketing



                                       11
<PAGE>   12


expenses as a percentage of total revenues increased from 38.9% for the three
months ended March 31, 1998 to 61.7% 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).

     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 36.7% for the three months ended
March 31, 1998 to 67.4% 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 11.1% for the three months ended
March 31, 1998 to 56.4% 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 $32.6 million and $7.3 million of U.S. and
foreign net operating loss carryforwards, respectively at December 31, 1998,
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 and Loss per Share. The net loss for the three month period ended
March 31, 1999, was ($7.9) million or ($0.46) 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 ($6.0) million or ($0.35) per basic
and diluted share. This compares to a net loss of ($1.2) or ($0.07) 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(1)         1999(2)             1998(1)
                              -----------     -----------         ----------
                              (unaudited)     (unaudited)         (unaudited)
                                   (in thousands, except per share amounts)
<S>                            <C>              <C>                 <C>
 Net loss                      $(7,899)         $(6,003)            $(1,216)

 Net loss per share:
      Basic                    $ (0.46)         $ (0.35)            $ (0.07)
      Diluted                  $ (0.46)         $ (0.35)            $ (0.07)
</TABLE>

(1)  Restated, see Note 6 to the condensed consolidated financial statements.

(2)  Excludes one-time restructuring charge of $1.9 million.


                                       12

<PAGE>   13


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.

     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 $3,000, compared
to $7.5 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 expired on May 17, 1999 and
was not renewed. At March 31, 1999 the Company had $2.0 million outstanding
under this line of credit, which was subsequently repaid after quarter end.

     Late in the second quarter of 1999, management identified a number of
factors that cause them to believe that available cash resources may not be
sufficient to fund anticipated operating losses. These include: (1) the
continued general business slowdown, which resulted in revenue levels
significantly lower than expected in the first half of 1999; (2) payment
disputes that arose in the second quarter of 1999 related to two significant
contracts for licensing of software and provision of services (see Note 6) and;
(3) delays experienced in the second quarter of 1999 related to the release of
the next version of the Company's general ledger product. Management has taken
actions to reduce costs in response to lower revenues and is prepared to take
further actions, if necessary, in order to continue to respond to competitive
and economic pressures in the marketplace. Management is also seeking to obtain
additional equity capital. However, there can be no assurance that the Company
will be able to reduce costs to a level to appropriately respond to competitive
pressures or to obtain additional funding. As a result of the foregoing, there
exists substantial doubt about the Company's ability to continue as a going
concern. The Company's financial statements do not include any adjustments
relating to the recoverability of the carrying amount of recorded assets or the
amounts of liabilities that might result from the outcome of this uncertainty.

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:


                                       13

<PAGE>   14


            *  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.

     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.



                                       14


<PAGE>   15


                                    SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment of 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: November 5, 1999



                                       15

<PAGE>   16




                                  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).




                                       16