##### Table of Contents



UNITED
STATESSECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    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: 000-18338
 I-FLOW CORPORATION
  Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
    
    33-0121984
(I.R.S. Employer Identification No.)20202 Windrow Drive, Lake Forest, CA
    
    92630(Address of Principal Executive Offices)
    
    (Zip Code)
 
 þ o
 þ o
 o þ




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I-FLOW CORPORATION
 FORM 10-Q
 FOR THE QUARTER ENDED SEPTEMBER 30, 2005
 Table of Contents
 PagePart I: Financial InformationItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations and Comprehensive Operations
    
    
    2Condensed Consolidated Statements of Cash Flows
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    17Part II: Other InformationItem 1. Legal Proceedings
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    24Signatures
    
    
    25EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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PART 1  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (Amounts in thousands, except per share data)
 September 30,
    
    
    December 31,2005
    
    
    2004ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    9,113
    
    
    $
    10,021Short-term investments
    
    
    22,379
    
    
    
    34,087Accounts receivable, less allowance for doubtful accounts of $5,336
and $2,900 at September 30, 2005 and December 31, 2004,
respectively
    
    
    20,635
    
    
    
    15,765Inventories, net
    
    
    12,605
    
    
    
    8,365Prepaid expenses and other current assets
    
    
    1,373
    
    
    
    921Total current assets
    
    
    66,105
    
    
    
    69,159Property, net
    
    
    14,888
    
    
    
    11,097Goodwill
    
    
    2,639
    
    
    
    2,639Other intangible assets, net
    
    
    2,595
    
    
    
    1,407Other long-term assets
    
    
    128
    
    
    
    128TOTAL
    
    $
    86,355
    
    
    $
    84,430LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    4,656
    
    
    $
    4,392Accrued payroll and related expenses
    
    
    5,993
    
    
    
    5,995Accrued use taxes payable
    
    
    1,119
    
    
    
    Income taxes payable
    
    
    290
    
    
    
    115Other liabilities
    
    
    672
    
    
    
    709Total current liabilities
    
    
    12,730
    
    
    
    11,211COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock  $0.001 par value; 5,000 shares authorized;
no shares issued and outstanding
    
    
    
    
    
    
    Common stock  $0.001 par value; 40,000 shares authorized;
22,552 and 22,220 shares issued and outstanding at September 30,
2005 and December 31, 2004, respectively
    
    
    109,233
    
    
    
    105,703Accumulated other comprehensive loss
    
    
    (272
    )
    
    
    (290
    )Accumulated deficit
    
    
    (35,336
    )
    
    
    (32,194
    )Net stockholders equity
    
    
    73,625
    
    
    
    73,219TOTAL
    
    $
    86,355
    
    
    $
    84,430
  1




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I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS
 (Unaudited)
 (Amounts in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues:Net product sales
    
    $
    18,154
    
    
    $
    13,476
    
    
    $
    52,275
    
    
    $
    36,073Net rental income and other
    
    
    8,641
    
    
    
    5,212
    
    
    
    21,444
    
    
    
    13,951Total revenues
    
    
    26,795
    
    
    
    18,688
    
    
    
    73,719
    
    
    
    50,024Cost of revenues:Product cost of revenues
    
    
    5,123
    
    
    
    3,819
    
    
    
    13,988
    
    
    
    11,217Rental cost of revenues
    
    
    2,433
    
    
    
    1,558
    
    
    
    6,029
    
    
    
    4,063Total cost of revenues
    
    
    7,556
    
    
    
    5,377
    
    
    
    20,017
    
    
    
    15,280Gross profit
    
    
    19,239
    
    
    
    13,311
    
    
    
    53,702
    
    
    
    34,744Operating expenses:Selling and marketing
    
    
    13,370
    
    
    
    11,729
    
    
    
    39,999
    
    
    
    29,352General and administrative
    
    
    5,738
    
    
    
    3,835
    
    
    
    15,265
    
    
    
    11,275Product development
    
    
    639
    
    
    
    743
    
    
    
    1,934
    
    
    
    2,013Total operating expenses
    
    
    19,747
    
    
    
    16,307
    
    
    
    57,198
    
    
    
    42,640Operating loss
    
    
    (508
    )
    
    
    (2,996
    )
    
    
    (3,496
    )
    
    
    (7,896
    )Interest income, net
    
    
    115
    
    
    
    182
    
    
    
    588
    
    
    
    292Loss before income taxes
    
    
    (393
    )
    
    
    (2,814
    )
    
    
    (2,908
    )
    
    
    (7,604
    )Income tax expense (benefit)
    
    
    95
    
    
    
    (1,044
    )
    
    
    234
    
    
    
    (2,830
    )Net loss
    
    $
    (488
    )
    
    $
    (1,770
    )
    
    $
    (3,142
    )
    
    $
    (4,774
    )Net loss per share:Basic and diluted
    
    $
    (0.02
    )
    
    $
    (0.08
    )
    
    $
    (0.14
    )
    
    $
    (0.24
    )Comprehensive Operations:Net loss
    
    $
    (488
    )
    
    $
    (1,770
    )
    
    $
    (3,142
    )
    
    $
    (4,774
    )Foreign currency translation gain (loss)
    
    
    4
    
    
    
    2
    
    
    
    64
    
    
    
    (44
    )Unrealized loss on investment securities
    
    
    (8
    )
    
    
    (11
    )
    
    
    (46
    )
    
    
    (11
    )Comprehensive income (loss)
    
    $
    (492
    )
    
    $
    (1,779
    )
    
    $
    (3,124
    )
    
    $
    (4,829
    )
  2




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I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (Amounts in thousands)
 Nine Months EndedSeptember 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (3,142
    )
    
    $
    (4,774
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    3,625
    
    
    
    2,377Stock-based compensation
    
    
    2,489
    
    
    
    1,179Provision for doubtful accounts receivable
    
    
    1,491
    
    
    
    1,473Provision for inventory obsolescence
    
    
    64
    
    
    
    209Loss on property disposal
    
    
    339
    
    
    
    117Deferred income tax benefit
    
    
    
    
    
    
    (2,830
    )Tax benefit from exercise of stock options
    
    
    
    
    
    
    2,021Changes in operating assets and liabilities:Accounts receivable
    
    
    (6,361
    )
    
    
    (2,864
    )Inventories
    
    
    (4,304
    )
    
    
    (1,340
    )Prepaid expenses and other current assets
    
    
    (452
    )
    
    
    (260
    )Deferred tax assets
    
    
    
    
    
    
    (1,978
    )Accounts payable, accrued payroll and related expenses
    
    
    189
    
    
    
    648Accrued use taxes payable
    
    
    97
    
    
    
    Income taxes payable
    
    
    175
    
    
    
    (172
    )Other liabilities
    
    
    (37
    )
    
    
    (384
    )Net cash used in operating activities
    
    
    (5,827
    )
    
    
    (6,578
    )CASH FLOWS FROM INVESTING ACTIVITIES:Property acquisitions
    
    
    (6,374
    )
    
    
    (5,777
    )Purchases of investments
    
    
    (12,013
    )
    
    
    Maturities of investments
    
    
    22,690
    
    
    
    Sale of investments
    
    
    985
    
    
    
    Patent and licensing right acquisitions
    
    
    (1,422
    )
    
    
    (424
    )Net cash provided by (used in) investing activities
    
    
    3,866
    
    
    
    (6,201
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net proceeds from common stock offering
    
    
    
    
    
    
    43,088Proceeds from exercise of stock options and warrants
    
    
    989
    
    
    
    918Net cash provided by financing activities
    
    
    989
    
    
    
    44,006Effect of exchange rates on cash
    
    
    64
    
    
    
    (12
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (908
    )
    
    
    31,215CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    10,021
    
    
    
    15,185CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    9,113
    
    
    $
    46,400SUPPLEMENTAL CASH FLOW INFORMATION:Income taxes paid
    
    $
    
    
    
    $
    126SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:Property acquisitions
    
    $
    1,096
    
    
    $
    
  3




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I-FLOW CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Basis of Presentation and Summary of Significant Accounting Policies
 Basis of Presentation
  Use
of Estimates 
 New Accounting Pronouncements Inventory Costs Inventory Pricing.
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  4




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Accounting Changes and Error Corrections  A Replacement
of APB Opinion No. 20 and FASB Statement No. 3
 Accounting for Stock-Based Compensation Accounting for Stock Appreciation Rights and Other Variable Stock Option or
Award Plans, .
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss  as reported
    
    $
    (488
    )
    
    $
    (1,770
    )
    
    $
    (3,142
    )
    
    $
    (4,774
    )Stock-based employee and director compensation
included in net loss, net of tax
    
    
    786
    
    
    
    285
    
    
    
    2,484
    
    
    
    662Total stock-based employee and director compensation
expense determined under fair-value-based method for
all awards, net of tax
    
    
    (2,639
    )
    
    
    (1,103
    )
    
    
    (7,951
    )
    
    
    (2,995
    )Net loss  pro forma
    
    $
    (2,341
    )
    
    $
    (2,588
    )
    
    $
    (8,609
    )
    
    $
    (7,107
    )Basic and diluted net loss per share  as reported
    
    $
    (0.02
    )
    
    $
    (0.08
    )
    
    $
    (0.14
    )
    
    $
    (0.24
    )Basic and diluted net loss per share  pro forma
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.38
    )
    
    $
    (0.35
    )
   Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Expected life (in years)
    
    
    4.3
    
    
    
    5.0
    
    
    
    4.9
    
    
    
    5.0Risk-free interest rate
    
    
    3.86
    %
    
    
    3.64
    %
    
    
    4.07
    %
    
    
    3.64
    %Volatility
    
    
    60
    %
    
    
    90
    %
    
    
    83
    %
    
    
    90
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
 5




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2. Inventories
  September 30,
    
    
    December 31,(Amounts in thousands)
    
    2005
    
    
    2004Raw Materials
    
    $
    6,788
    
    
    $
    5,145Work in Process
    
    
    2,627
    
    
    
    1,369Finished Goods
    
    
    4,149
    
    
    
    2,774Reserve for Obsolescence
    
    
    (959
    )
    
    
    (923
    )Total
    
    $
    12,605
    
    
    $
    8,365
 3. Earnings (Loss) Per Share
 Earnings Per Share
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss (Numerator)
    
    $
    (488
    )
    
    $
    (1,770
    )
    
    $
    (3,142
    )
    
    $
    (4,774
    )Basic net loss per share (Denominator):Weighted average number of common shares outstanding
    
    
    22,518
    
    
    
    21,501
    
    
    
    22,377
    
    
    
    20,185Effect of dilutive securities:Stock options and unvested restricted stock (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted net loss per share (Denominator):Weighted average number of common and common equivalent
shares outstanding
    
    
    22,518
    
    
    
    21,501
    
    
    
    22,377
    
    
    
    20,185Net loss per share:Basic and diluted
    
    $
    (0.02
    )
    
    $
    (0.08
    )
    
    $
    (0.14
    )
    
    $
    (0.24
    )
 
 (1)
    
    Options to purchase 297,000 and 215,000 shares of common stock have been excluded
from the treasury stock method of calculation for diluted weighted average common shares for
the three and nine-month periods ended September 30, 2005, respectively, because their
exercise prices exceeded the average market price of the Companys common stock for these
periods and their effect would be anti-dilutive.Options to purchase 320,000 and 183,000 shares of common stock have been excluded from the
treasury stock method of calculation for diluted weighted average common shares for the
three and nine-month periods ended September 30, 2004, respectively, because their exercise
prices exceeded the average market price of the Companys common stock for these periods
and their effect would be anti-dilutive. 6




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4. Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets
  As of September 30, 2005Carrying
    
    
    Accumulated(Amounts in thousands)
    
    Amount
    
    
    Amortization
    
    
    NetPatents
    
    $
    2,756
    
    
    $
    1,096
    
    
    $
    1,660Licensing Rights
    
    
    1,101
    
    
    
    166
    
    
    
    935Total
    
    $
    3,857
    
    
    $
    1,262
    
    
    $
    2,595
 As of December 31, 2004Carrying
    
    
    Accumulated(Amounts in thousands)
    
    Amount
    
    
    Amortization
    
    
    NetPatents
    
    $
    2,310
    
    
    $
    903
    
    
    $
    1,407Licensing Rights
    
    
    150
    
    
    
    150
    
    
    
    Total
    
    $
    2,460
    
    
    $
    1,053
    
    
    $
    1,407
   7




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5. Stockholders Equity
   6. Operating Segments and Revenue Data
   Manufacturing(Amounts in thousands)
    
    and Marketing
    
    Rentals
    
    ConsolidatedThree months ended September 30, 2005Revenues
    
    $
    18,154
    
    
    $
    8,641
    
    
    $
    26,795Operating income (loss)
    
    
    (3,307
    )
    
    
    2,799
    
    
    
    (508
    )Assets
    
    
    58,748
    
    
    
    27,607
    
    
    
    86,355Depreciation and amortization
    
    
    338
    
    
    
    1,160
    
    
    
    1,498Property additions
    
    
    281
    
    
    
    2,458
    
    
    
    2,739Nine months ended September 30, 2005Revenues
    
    $
    52,275
    
    
    $
    21,444
    
    
    $
    73,719Operating income (loss)
    
    
    (9,925
    )
    
    
    6,429
    
    
    
    (3,496
    )Assets
    
    
    58,748
    
    
    
    27,607
    
    
    
    86,355Depreciation and amortization
    
    
    1,040
    
    
    
    2,585
    
    
    
    3,625Property additions
    
    
    355
    
    
    
    7,115
    
    
    
    7,470Three months ended September 30, 2004Revenues
    
    $
    13,476
    
    
    $
    5,212
    
    
    $
    18,688Operating income (loss)
    
    
    (4,543
    )
    
    
    1,547
    
    
    
    (2,996
    )Assets
    
    
    78,796
    
    
    
    15,568
    
    
    
    94,364Depreciation and amortization
    
    
    326
    
    
    
    535
    
    
    
    861Property additions
    
    
    281
    
    
    
    1,896
    
    
    
    2,177Nine months ended September 30, 2004Revenues
    
    $
    36,073
    
    
    $
    13,951
    
    
    $
    50,024Operating income (loss)
    
    
    (11,401
    )
    
    
    3,505
    
    
    
    (7,896
    )Assets
    
    
    78,796
    
    
    
    15,568
    
    
    
    94,364Depreciation and amortization
    
    
    1,021
    
    
    
    1,356
    
    
    
    2,377Property additions
    
    
    1,011
    
    
    
    4,766
    
    
    
    5,777
 8




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7. Commitments and Contingencies
     9




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Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
  Critical Accounting Policies
  Revenue Recognition
   10




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Accounts Receivable
  Inventories
  Deferred Taxes
  Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets
 11




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Overview
   Results of Operations
 Revenue
   TM TM
   12




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Cost of Revenues
   Selling and Marketing Expenses
    13




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General and Administrative Expenses
    Product Development Expenses
  Interest Income, Net
  Income Taxes
  Liquidity and Capital Resources
  14




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New Accounting Pronouncements
 Inventory Costs Inventory Pricing.
 15




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Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  Accounting Changes and Error Corrections  A Replacement
of APB Opinion No. 20 and FASB Statement No. 3
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   Foreign Currency
  16




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Item 4. CONTROLS AND PROCEDURES
  
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   
 Item 5. OTHER INFORMATION
 Risk Factors
 RISK FACTORS RELATING TO OUR BUSINESS AND THE INDUSTRY IN WHICH WE OPERATE
 We have experienced net losses in prior periods and have an accumulated deficit. Future losses are
possible.
  17




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We have invested substantial resources into the sales and marketing of the ON-Q PainBuster. If this
product does not achieve significant clinical acceptance or if our direct sales strategy is not
successful, our financial condition and operating results will be adversely affected.
  Our customers frequently receive reimbursement from private insurers and governmental agencies. Any
change in the overall reimbursement system may adversely impact our business.
    Changes in reimbursement rates may adversely impact InfuSystems revenues.
  Changes in reimbursement rates may adversely impact the revenue that we earn from our developing
billing strategy for ON-Q.
  18




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Our products are highly regulated by a number of governmental agencies. Any changes to the existing
rules and regulations of these agencies may adversely impact our ability to manufacture and market
our products.
     Our compliance with laws frequently involves our subjective judgment. If we are wrong in any of our
interpretations of the laws, we could be subjected to substantial penalties for noncompliance.
  We may need to raise additional capital in the future to fund our operations. We may be unable to
raise funds when needed or on acceptable terms.
  19




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Our intangible assets are subject to potential impairment charges that could adversely affect our
results of operations.
 Goodwill and Other
Intangible Assets
 Our industry is intensely competitive and changes rapidly. If we are unable to maintain a
technological lead over our competitors, our business operations will suffer.
  We rely on independent suppliers for parts and materials necessary to assemble our products. Any
delay or disruption in the supply of parts may prevent us from manufacturing our products and
negatively impact our operations.
  If one of our products proves to be defective or is misused by a health care practitioner or
patient, we may be subject to claims of liability that could adversely affect our financial
condition and the results of our operations.
  20




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We are dependent on our proprietary technology and the patents, copyrights, and trademarks that
protect our products. If competitors are able to independently develop products of equivalent or
superior capabilities, the results of our operations could be adversely impacted.
   We manufacture the majority of our products in Mexico. Any difficulties or disruptions in the
operation of our plant may adversely impact our operations.
  A significant portion of our sales is to customers in foreign countries. We may lose revenues,
market share, and profits due to exchange rate fluctuations and other factors related to our
foreign business.
  We currently rely on two distributors for a significant percentage of our sales. If our
relationship with these distributors were to deteriorate, our sales may materially decline.
  21




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The preparation of our financial statements in accordance with accounting principles generally
accepted in the United States requires us to make estimates, judgments, and assumptions that may
ultimately prove to be incorrect.
  Failure to achieve and maintain effective internal controls in accordance with Section 404 of the
Sarbanes-Oxley Act could have a material adverse effect on the Companys business and its stock
price.
  RISK FACTORS RELATED SPECIFICALLY TO OUR COMMON STOCK
 The average trading volume for our common stock is relatively low when compared to most larger
companies. As a result, there may be less liquidity and more volatility associated with our common
stock, even if our business is doing well.
   
    
    announcements of technological innovations, new products, or clinical studies by us or others;
    
    government regulation;
    
    changes in the coverage of reimbursement rates of private insurers and governmental agencies;
    
    developments in patent or other proprietary rights;
 22




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
    
    future sales of substantial amounts of our common stock by existing stockholders or by us; and
    
    comments by securities analysts and general market conditions.
  Future sales of our common stock by existing stockholders could negatively affect the market price
of our stock and make it more difficult for us to sell stock in the future.
  
    
    22,431,073 shares of common stock that have been issued in registered offerings and are
freely tradable in the public markets;
    
    225,111 shares of common stock underlying outstanding warrants which have been registered for
resale under a Registration Statement on Form S-3 (Registration No. 333-109096);
    
    121,000 shares of vested and unvested restricted common stock that have been issued under our
restricted stock plans; and
    
    an aggregate of 4,318,202 shares of common stock that may be issued on the exercise of stock
options outstanding under our equity incentive plans.
  Anti-takeover devices may prevent a sale, or changes in the management, of the Company.
   We do not pay dividends and this may negatively affect the price of our stock.
  23




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In the future, our common stock may be removed from listing on the Nasdaq quotation system and may
not qualify for listing on any stock exchange, in which case it may be difficult to find a market
in our stock.
  
 Item 6. EXHIBITS
  24




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SIGNATURES
  I-FLOW CORPORATIONDate: November 2, 2005
    
    /s/Donald M. EarhartDonald M. EarhartPresident, Chairman and Chief Executive Officer(On Behalf of the Registrant)Date: November 2, 2005
    
    /s/James R. TalevichJames R. TalevichChief Financial Officer(As Principal Financial Officer)
 25




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Exhibit2.1
    
    Stock Purchase Agreement, dated October 28, 2004, by and between Integra LifeSciences
Corporation and I-Flow Corporation (1)2.2
    
    Merger Agreement, dated July 27, 2001, by and between I-Flow Corporation, a Delaware
corporation, and I-Flow Corporation, a California corporation (2)2.3
    
    Agreement and Plan of Merger, dated January 13, 2000, by and among I-Flow Corporation,
Spinal Acquisition Corp., Spinal Specialties, Inc. and the Shareholders of Spinal
Specialties, Inc. (3)2.4
    
    Agreement and Plan of Merger, dated February 9, 1998, by and among I-Flow Corporation,
I-Flow Subsidiary, Inc., Venture Medical, Inc., InfuSystems II, Inc. and the Shareholders
of Venture Medical, Inc. and InfuSystems II, Inc. (4)2.5
    
    Agreement for Purchase and Sale of Assets, dated July 3, 1996, by and among I-Flow
Corporation, Block Medical, Inc. and Hillenbrand Industries, Inc. (5)3.1
    
    Amended and Restated Certificate of Incorporation of I-Flow Corporation, a Delaware
Corporation (6)3.2
    
    Bylaws of I-Flow Corporation, a Delaware Corporation (2)3.3
    
    Certificate of Designation Regarding Series A Junior Participating Cumulative Preferred
Stock (7)4.1
    
    Specimen Common Stock Certificate (20)4.2
    
    Warrant Agreement, dated February 13, 1990, between the Company and American Stock
Transfer & Trust Company, as warrant agent (9)4.3
    
    Rights Agreement, dated as of March 8, 2002, by and between I-Flow Corporation and
American Stock Transfer & Trust Company, as rights agent, which includes, as Exhibit A,
the Form of Rights Certificate, the Form of Assignment and the Form of Election to
Purchase (7)4.4
    
    Warrant to Purchase Stock, dated May 8, 2003, between I-Flow Corporation and Silicon
Valley Bank (10)4.5
    
    Registration Rights Agreement, dated May 8, 2003, between I-Flow Corporation and Silicon
Valley Bank (10)4.6
    
    Form of Warrant, dated September 4, 2003 (1)4.7
    
    Form of Registration Rights Agreement, dated September 4, 2003 (1)10.1
    
    Form of Securities Purchase Agreement, dated September 2, 2003 (1)10.2
    
    I-Flow Corporation Amended and Restated 2001 Equity Incentive Plan (11) *10.3
    
    2003 Restricted Stock Plan of I-Flow Corporation (10)*10.4
    
    2001 Restricted Stock Plan of I-Flow Corporation (12)*10.5
    
    1996 Stock Incentive Plan (13)*10.6
    
    1992 Non-Employee Director Stock Option Plan (14)*10.7
    
    1987-1988 Incentive Stock Option Plan and Non-Statutory Stock Option Plan, restated as of
March 23, 1992 (15)*10.8
    
    License and Transfer Agreement with SoloPak Pharmaceuticals Inc., dated March 6, 1996 (16)10.9
    
    Summary of the terms of the COIP for 2005 (23)*10.10
    
    Addendum to manufacturing plant lease agreement (23)10.11
    
    Lease Agreement between Industrial Developments International, Inc. as Landlord and
I-Flow Corporation as Tenant dated April 14, 1997 (17)10.12
    
    Block Medical de Mexico lease agreement dated December 7, 1999 (22)




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##### Table of Contents



Exhibit No.
    
    Exhibit10.13
    
    Amendment to Loan Agreement between Silicon Valley Bank and I-Flow Corporation dated
January 30, 2004 (22)10.14
    
    Amended and Restated Loan and Security Agreement between Silicon Valley Bank and I-Flow
Corporation dated May 8, 2003 (10)10.15
    
    Loan Agreement, dated March 31, 2000, by and among InfuSystem, Inc., I-Flow Corporation
and Old Kent Bank (10)10.16
    
    First Amendment to Loan Agreement, dated April 1, 2002, by and among InfuSystem, Inc.,
I-Flow Corporation and Fifth Third Bank (formerly Old Kent Bank) (10)10.17
    
    Second Amendment to Loan Agreement, dated April 1, 2003, by and among InfuSystem, Inc.,
I-Flow Corporation and Fifth Third Bank (formerly Old Kent Bank) (10)10.18
    
    Second Amended and Restated Promissory Note, dated April 1, 2004, between InfuSystem,
Inc. and Fifth Third Bank (formerly Old Kent Bank) (10)10.19
    
    Promissory Note with Donald M. Earhart dated June 15, 2001 (8)*10.20
    
    Underwriting Agreement, dated April 13, 2004 (21)10.21
    
    Employment Agreement with Donald M. Earhart, dated May 16, 1990 (18)*10.22
    
    Amendment No. 1 to Employment Agreement with Donald M. Earhart, dated June 21, 2001 (8)*10.23
    
    Amended and Restated Employment Agreement with James J. Dal Porto, dated June 21, 2001
(8)*10.24
    
    Employment Agreement with James R. Talevich, dated June 30, 2000 (19) *10.25
    
    Agreement Re: Change in Control with Donald M. Earhart dated June 21, 2001 (8)*10.26
    
    Agreement Re: Change in Control with James J. Dal Porto dated June 21, 2001 (8)*10.27
    
    Agreement Re: Change in Control with James R. Talevich, dated June 21, 2001 (8)*10.28
    
    Amendment to Loan Agreement, dated as of April 30, 2005, between I-Flow Corporation and
Silicon Valley Bank (24)31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, a copy of which is filed herewith31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, a copy of which is filed herewith32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, a copy of which is filed herewith
 
 *
    
    Management contract or compensatory plan or arrangement required to be filed as
an exhibit pursuant to applicable rules of the Securities and Exchange Commission.(1)
    
    Incorporated by reference to exhibit with this title filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended September 30, 2003.(2)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on August 3, 2001.(3)
    
    Incorporated by reference to exhibit with this title filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000.(4)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K/A filed on March 6, 1998.(5)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K dated July 22, 1996.




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(6)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K dated May 29, 2002.(7)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on March 13, 2002.(8)
    
    Incorporated by reference to exhibit with this title filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended June 30, 2001.(9)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended September 30, 1990.(10)
    
    Incorporated by reference to exhibit with this title filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended June 30, 2003.(11)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on June 1, 2005.(12)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 2002.(13)
    
    Incorporated by reference to exhibit with this title filed with the Companys Definitive
Proxy Statement filed on March 27, 1996.(14)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 1991.(15)
    
    Incorporated by reference to exhibit with this title filed with the Companys Post-Effective
Amendment to its Registration Statement (No. 33-41207) filed on October 27, 1992.(16)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.(17)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K dated April 14, 1997.(18)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended September 30, 1990.(19)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 2000.(20)
    
    Incorporated by reference to exhibit with this title filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002.(21)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on April 14, 2004.(22)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 2003.(23)
    
    Incorporated by reference to exhibit with this title filed with the Companys Annual Report
on Form 10 -K for the fiscal year ended December 31, 2004.(24)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on May 9, 2005.