##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 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
    
    33-0121984(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)
 20202 Windrow Drive, Lake Forest, CA
    
    92630(Address of Principal Executive Offices)
    
    (Zip Code)
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



I-FLOW CORPORATION
 FORM 10-Q
 FOR THE QUARTER ENDED MARCH 31, 2009
 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
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23Part II: Other InformationItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    25Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 6. Exhibits
    
    
    28SignaturesEX-31.1EX-31.2EX-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 par value amounts)
 March 31,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    44,471
    
    
    $
    39,276Short-term investments
    
    
    
    
    
    
    3,384Short-term investments  HAPC common stock
    
    
    5,703
    
    
    
    5,703Accounts receivable, less allowance for
doubtful accounts of $2,257 and $2,063 at
March 31, 2009 and December 31, 2008,
respectively
    
    
    18,728
    
    
    
    21,930Inventories
    
    
    18,170
    
    
    
    15,819Prepaid expenses and other current assets
    
    
    4,574
    
    
    
    3,356Note receivable, HAPC  current
    
    
    8,564
    
    
    
    3,270Deferred taxes
    
    
    783
    
    
    
    961Total current assets
    
    
    100,993
    
    
    
    93,699Property, net
    
    
    3,974
    
    
    
    4,127Goodwill
    
    
    12,233
    
    
    
    12,233Other intangible assets, net
    
    
    4,330
    
    
    
    4,201Other long-term assets
    
    
    169
    
    
    
    170Note receivable, HAPC  noncurrent
    
    
    20,868
    
    
    
    26,980Deferred taxes
    
    
    4,008
    
    
    
    7,277Total assets
    
    $
    146,575
    
    
    $
    148,687LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    6,908
    
    
    $
    4,882Accrued payroll and related expenses
    
    
    5,442
    
    
    
    6,138Accrued litigation costs (Note 10)
    
    
    11,967
    
    
    
    10,467Other current liabilities
    
    
    1,498
    
    
    
    2,140Total current liabilities
    
    
    25,815
    
    
    
    23,627Other liabilities (Note 10)
    
    
    5,953
    
    
    
    6,015Commitments and contingencies (Note 10)
    
    
    
    
    
    
    Stockholders equity:Preferred stock  $0.001 par value; 5,000
shares authorized; no shares issued and
outstanding
    
    
    
    
    
    
    Common stock and additional paid-in capital
 $0.001 par value; 40,000 shares
authorized; 24,443 and 24,534 shares issued
and outstanding at March 31, 2009 and
December 31, 2008, respectively
    
    
    135,390
    
    
    
    136,338Accumulated other comprehensive loss
    
    
    (321
    )
    
    
    (379
    )Accumulated deficit
    
    
    (20,262
    )
    
    
    (16,914
    )Net stockholders equity
    
    
    114,807
    
    
    
    119,045Total liabilities and stockholders equity
    
    $
    146,575
    
    
    $
    148,687
  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 EndedMarch 31,2009
    
    
    2008Net revenues
    
    $
    30,935
    
    
    $
    28,415Cost of revenues
    
    
    7,491
    
    
    
    7,187Gross profit
    
    
    23,444
    
    
    
    21,228Operating expenses:Selling and marketing
    
    
    16,870
    
    
    
    18,398General and administrative
    
    
    6,437
    
    
    
    4,908Product development
    
    
    2,163
    
    
    
    921Certain litigation and insurance charges
    
    
    1,500
    
    
    
    Total operating expenses
    
    
    26,970
    
    
    
    24,227Operating loss
    
    
    (3,526
    )
    
    
    (2,999
    )Interest and other income
    
    
    833
    
    
    
    1,707Loss before income taxes
    
    
    (2,693
    )
    
    
    (1,292
    )Income tax (provision) benefit
    
    
    (655
    )
    
    
    755Net loss
    
    $
    (3,348
    )
    
    $
    (537
    )Net loss per share of common stock:Basic and diluted
    
    $
    (0.14
    )
    
    $
    (0.02
    )Weighted average shares, basic and diluted
    
    
    24,546
    
    
    
    25,027Comprehensive Operations:Net loss
    
    $
    (3,348
    )
    
    $
    (537
    )Foreign currency translation gain
    
    
    58
    
    
    
    116Unrealized loss on investment securities
    
    
    
    
    
    
    (5
    )Unrealized loss on investment securities  HAPC common stock
    
    
    
    
    
    
    (4,276
    )Comprehensive loss
    
    $
    (3,290
    )
    
    $
    (4,702
    )
  2




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I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (Amounts in thousands)
 Three Months EndedMarch 31,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (3,348
    )
    
    $
    (537
    )Adjustments to reconcile net loss to net cash used in operating activities:Deferred taxes
    
    
    3,447
    
    
    
    Stock-based compensation
    
    
    1,349
    
    
    
    1,418Depreciation and amortization
    
    
    603
    
    
    
    489Amortization of deferred financing fees from note receivable, HAPC
    
    
    (178
    )
    
    
    (178
    )Provision for doubtful accounts receivable
    
    
    96
    
    
    
    (42
    )Write-off of inventory
    
    
    94
    
    
    
    45Gain on disposal of property
    
    
    
    
    
    
    (4
    )Changes in operating assets and liabilities, net of AcryMed acquisition:Accounts receivable
    
    
    3,106
    
    
    
    4,653Inventories
    
    
    (2,445
    )
    
    
    (1,622
    )Prepaid expenses and other assets
    
    
    495
    
    
    
    274Accounts payable, accrued payroll and related expenses
    
    
    697
    
    
    
    (2,504
    )Income taxes payable
    
    
    (2,880
    )
    
    
    (13,305
    )Accrued litigation costs
    
    
    1,500
    
    
    
    Other liabilities
    
    
    97
    
    
    
    (510
    )Net cash provided by (used in) operating activities
    
    
    2,633
    
    
    
    (11,823
    )CASH FLOWS FROM INVESTING ACTIVITIES:Property acquisitions
    
    
    (194
    )
    
    
    (175
    )Proceeds from sale of property
    
    
    
    
    
    
    11Acquisition of AcryMed, net of cash acquired
    
    
    
    
    
    
    (26,663
    )Repayments on note receivable, HAPC
    
    
    818
    
    
    
    408Purchases of investments
    
    
    
    
    
    
    (6,944
    )Maturities of investments
    
    
    3,384
    
    
    
    9,387Patent and other intangible asset acquisitions
    
    
    (365
    )
    
    
    (106
    )Net cash provided by (used in) investing activities
    
    
    3,643
    
    
    
    (24,082
    )CASH FLOWS FROM FINANCING ACTIVITIES:Purchase and retirement of common stock
    
    
    (1,134
    )
    
    
    (3,609
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    254Net cash used in financing activities
    
    
    (1,134
    )
    
    
    (3,355
    )Effect of exchange rates on cash
    
    
    53
    
    
    
    116Net increase (decrease) in cash and cash equivalents
    
    
    5,195
    
    
    
    (39,144
    )Cash and cash equivalents at beginning of period
    
    
    39,276
    
    
    
    78,571Cash and cash equivalents at end of period
    
    $
    44,471
    
    
    $
    39,427SUPPLEMENTAL CASH FLOW INFORMATION:Income tax payments
    
    $
    55
    
    
    $
    12,642Interest received
    
    
    656
    
    
    
    1,838SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:Property acquisitions
    
    $
    29
    
    
    $
    55
  3




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I-FLOW CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  1. Basis of Presentation and Summary of Significant Accounting Policies
 Basis of Presentation
  Use of Estimates 
 New Accounting Pronouncements Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible Assets
 Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities Earnings per Share
 4




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FSP FAS No. 115-2 (FSP FAS 115-2) and FAS 124-2  Recognition and Presentation of Other-Than-Temporary Impairments Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly
 FSP FAS 157-4  Fair Value Measurements ,
 FSP FAS No. 107-1 (FSP FAS 107-1) and Accounting Principles Board 28-1 (APB 28-1)  Interim Disclosures about Fair Value of Financial Instruments
  2. Inventories
  March 31,
    
    
    December 31,(Amounts in thousands)
    
    2009
    
    
    2008Raw materials
    
    $
    7,674
    
    
    $
    7,501Work in process
    
    
    6,871
    
    
    
    2,612Finished goods
    
    
    3,625
    
    
    
    5,706Total
    
    $
    18,170
    
    
    $
    15,819
 3. Earnings (Loss) Per Share
   5




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Three Months Ended March 31,___(Amounts in thousands, except per share amounts)
    
    2009
    
    
    2008Numerator:Net loss
    
    $
    (3,348
    )
    
    $
    (537
    )Denominators:Denominator for basic earnings per share:Weighted-average number of common shares outstanding
    
    
    24,546
    
    
    
    25,027Effect of dilutive securities:Stock options, nonvested restricted stock and
nonvested restricted stock units
    
    
    
    
    
    
    Denominator for diluted net income per share:Weighted-average number of common and common
equivalent shares outstanding
    
    
    24,546
    
    
    
    25,027Basic and diluted earnings per share:Net loss
    
    $
    (0.14
    )
    
    $
    (0.02
    )
  4. Goodwill and Other Intangible Assets
  6




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As of March 31, 2009Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Net(Amounts in thousands)Purchased technology and patents
    
    $
    4,721
    
    
    $
    (1,899
    )
    
    $
    2,822Licensing rights and agreements
    
    
    1,402
    
    
    
    (567
    )
    
    
    835Customer relationships
    
    
    700
    
    
    
    (152
    )
    
    
    548Other
    
    
    150
    
    
    
    (25
    )
    
    
    125Total
    
    $
    6,973
    
    
    $
    (2,643
    )
    
    $
    4,330
 As of December 31, 2008Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Net(Amounts in thousands)Purchased technology and patents
    
    $
    4,404
    
    
    $
    (1,784
    )
    
    $
    2,620Licensing rights and agreements
    
    
    1,402
    
    
    
    (528
    )
    
    
    874Customer relationships
    
    
    700
    
    
    
    (123
    )
    
    
    577Other
    
    
    150
    
    
    
    (20
    )
    
    
    130Total
    
    $
    6,656
    
    
    $
    (2,455
    )
    
    $
    4,201
   7




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5. Stockholders Equity
   6. Stock-Based Compensation
 Share-Based Payment
  Three Months Ended March 31,(Amounts in thousands)
    
    2009
    
    
    2008Selling and marketing
    
    $
    110
    
    
    $
    100General and administrative
    
    
    1,239
    
    
    
    1,318Total
    
    $
    1,349
    
    
    $
    1,418
  8




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Stock Options
  Weighted-AverageWeighted-
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateNumber
    
    
    Exercise Price
    
    
    Term
    
    
    Intrinsic(Amounts in thousands, except per share and year amounts)
    
    of Shares
    
    
    per Share
    
    
    (in years)
    
    
    ValueOptions outstanding at December 31, 2008
    
    
    2,001
    
    
    $
    11.79Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options forfeited or expired
    
    
    (647
    )
    
    
    13.59Options outstanding at March 31, 2009
    
    
    1,354
    
    
    
    10.92
    
    
    
    1.17
    
    
    $
    1,166Options vested and exercisable at March 31, 2009
    
    
    1,269
    
    
    $
    10.66
    
    
    
    1.07
    
    
    $
    1,166
   Restricted Stock and Restricted Stock Units
 i.e.
 9




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Restricted Stock
    
    
    Restricted Stock UnitsWeighted-
    
    
    
    
    
    
    Weighted-Average Grant
    
    
    
    
    
    
    Average GrantNumber of
    
    
    Date Fair Value
    
    
    Number of
    
    
    Date Fair Value(Amounts in thousands, except per share amounts)
    
    Shares
    
    
    per Share
    
    
    Shares
    
    
    per ShareNonvested shares outstanding at December 31, 2008
    
    
    517
    
    
    $
    14.35
    
    
    
    676
    
    
    $
    14.12Shares issued
    
    
    85
    
    
    
    4.58
    
    
    
    148
    
    
    
    4.32Shares vested
    
    
    (354
    )
    
    
    14.48
    
    
    
    (145
    )
    
    
    14.58Shares forfeited
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    13.63Nonvested shares outstanding at March 31, 2009
    
    
    248
    
    
    $
    10.80
    
    
    
    668
    
    
    $
    11.87
  7. Income Taxes
  Business Combinations
 Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109
    10




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8. Discontinued Operations
      11




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(Amounts in thousands)Purchase price
    
    $
    100,000Termination fee
    
    
    3,000Working capital adjustments
    
    
    (798
    )Costs of disposition
    
    
    (3,035
    )Net proceeds from the sale
    
    
    99,167Less: Book value of net assets disposed of
    
    
    (23,077
    )Gain on sale of discontinued operations, before income taxes
    
    
    76,090Provision for income taxes
    
    
    (30,694
    )Gain on sale of discontinued operations, net of income taxes
    
    $
    45,396
 9. Fair Values of Financial Instruments
     Determining the Fair
Value of a Financial Asset When the Market for That Asset Is Not Active
 Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableBalance at
    
    
    Assets
    
    
    Inputs
    
    
    Inputs(Amounts in thousands)
    
    March 31, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3) (3)Reported as:Cash equivalents (1)
    
    $
    36,771
    
    
    $
    36,771
    
    
    $
    
    
    
    $
    Short-term
investments  HAPC
common stock (2)
    
    
    5,703
    
    
    
    
    
    
    
    
    
    
    
    5,703Total
    
    $
    42,474
    
    
    $
    36,771
    
    
    $
    
    
    
    $
    5,703
 
 (1)
    
    Level 1 securities include money market securities that are valued based on quoted market
prices in active markets. The money market securities participate in the Department of
Treasurys Temporary Guarantee Program for Money Market Funds.(2)
    
    Level 3 securities include available-for-sale investment in HAPC common stock purchased in
October 2007 in connection with the sale of InfuSystem to HAPC. The value is based on quoted
market prices for the exchange-traded equity security, adjusted to reflect the restriction on
the sale of the security due to the Companys potential affiliate status with HAPC for 12




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purposes of federal securities laws resulting from the Companys position as a substantial
stockholder and creditor on a secured promissory note.(3)
    
    There was no change in the fair value of the securities using Level 3 inputs from December
31, 2008 to March 31, 2009. Accounting for
Certain Investments in Debt and Equity Securities The Meaning
of Other-Than-Temporary Impairment and Its Application to Certain Investments Other Than Temporary Impairment of Certain Investments in Debt and Equity
Securities
  10. Commitments and Contingencies
   Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others
 13




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Chondrolysis Litigation
 e.g. ® ®
   Accounting for Contingencies Reasonable Estimation of the Amount of a Loss
 14




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Other Litigation and Regulatory Matters
 ®
   11. Operating Segments and Revenue Data
 Disclosures about Segments of an Enterprise and Related Information
 15




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Three Months Ended March 31,__(Amounts in thousands)

    
    2009
    
    
    2008Infusion Pumps:Regional Anesthesia
    
    $
    24,697
    
    
    $
    22,615IV Infusion Therapy
    
    
    5,441
    
    
    
    5,225Subtotal
    
    
    30,138
    
    
    
    27,840Antimicrobial Materials
    
    
    797
    
    
    
    575Total
    
    $
    30,935
    
    
    $
    28,415
  Infusion
    
    AntimicrobialPumps
    
    Materials
    
    Consolidated(Amounts in thousands)Three Months Ended March 31, 2009Revenues (1)
    
    $
    30,138
    
    
    $
    797
    
    
    $
    30,935Operating loss (1)(2)
    
    
    (2,917
    )
    
    
    (609
    )
    
    
    (3,526
    )Assets
    
    
    131,037
    
    
    
    15,538
    
    
    
    146,575Depreciation and amortization
    
    
    497
    
    
    
    106
    
    
    
    603Property additions
    
    
    211
    
    
    
    12
    
    
    
    223Three Months Ended March 31, 2008Revenues (1)
    
    $
    27,840
    
    
    $
    575
    
    
    $
    28,415Operating loss (1)(2)
    
    
    (2,734
    )
    
    
    (265
    )
    
    
    (2,999
    )Assets
    
    
    139,794
    
    
    
    27,727
    
    
    
    167,521Depreciation and amortization
    
    
    410
    
    
    
    79
    
    
    
    489Property additions
    
    
    218
    
    
    
    12
    
    
    
    230
 
 (1)
    
    Intercompany sales and operating income between the Infusion Pumps and Antimicrobial
Materials operating segments have been eliminated in the consolidation and have been excluded
from the above numbers.(2)
    
    Certain expenses incurred by the Company at the corporate level have not been allocated to
the Antimicrobial Materials operating segment, such as employee stock administration, human
resources, finance, information technology, investor relations, corporate governance, SEC
compliance, general management, strategy development, taxes, audit fees, cash management,
legal fees, regulatory compliance and budgeting. 16




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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
  Overview
   ®
 17




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Results of Operations
 Revenue
    ® ®
 18




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Cost of Revenues
  Selling and Marketing Expenses
     General and Administrative Expenses
  19




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Product Development Expenses
  Certain Litigation and Insurance Charges
 Accounting for Contingencies Reasonable Estimation of the Amount of a Loss ,
 20




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Interest and Other Income
  Income Taxes
  Liquidity and Capital Resources
       21




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Total Number of
    
    
    
    
    
    Maximum Number ofShares Purchased
    
    
    
    
    
    Shares That May YetTotal Number of
    
    
    
    
    
    Under the Stock
    
    
    
    
    
    Be Purchased UnderShares Repurchased
    
    Average
    
    Repurchase
    
    Average
    
    the StockFor Tax
    
    Price Paid
    
    Program
    
    Price Paid
    
    Repurchase Program2009
    
    Withholding (1)
    
    per Share
    
    (2)
    
    per Share
    
    (2)January 1  January 31
    
    
    22,434
    
    
    $
    4.12
    
    
    
    
    
    
    $
    
    
    
    
    3,092,548February 1  February 28
    
    
    167,739
    
    
    
    4.36
    
    
    
    
    
    
    
    
    
    
    
    3,092,548March 1  March 31
    
    
    1,968
    
    
    
    2.96
    
    
    
    128,863
    
    
    
    2.35
    
    
    
    2,963,685Total
    
    
    192,141
    
    
    $
    4.32
    
    
    
    128,863
    
    
    $
    2.35
    
    
    
    2,963,685
 
 (1)
    
    The total number of shares purchased represents shares delivered to or withheld by the
Company in connection with employee payroll tax withholding upon vesting of restricted stock
and restricted stock units.(2)
    
    The stock repurchase program authorized the repurchase of up to 4,000,000 shares of the
Companys common stock. The program will be in existence until February 28, 2010, unless the
program is terminated sooner by the board of directors.  22




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New Accounting Pronouncements
  Critical Accounting Policies
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   Foreign Currency
  
 Item 4. CONTROLS AND PROCEDURES
   
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
 Chondrolysis Litigation
  23




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e.g.
   Accounting for Contingencies Reasonable Estimation of the Amount of a Loss
  24




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Other Litigation and Regulatory Matters
 ®
   
 Item 1A. RISK FACTORS
  RISK FACTORS RELATING TO OUR BUSINESS AND THE INDUSTRY IN WHICH WE OPERATE
 If one or more of our products proves to be defective or is misused by a health care practitioner,
we may be subject to claims of liability that could adversely affect our financial condition and
the results of our operations.
  25




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e.g.
   We have experienced net losses in prior periods. Future losses are possible.
  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.
  26




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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.
  Our financial results could be adversely impacted by recording impairment losses or incurring
capital losses on stock sales in connection with our ownership of HAPC common stock.
 Accounting for Certain Investments in Debt and Equity Securities
 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.
   27




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
    
    announcements of technological innovations, new products, or clinical studies by us or
others;
    
    government regulation;
    
    changes in the coverage or reimbursement rates of private insurers and governmental
agencies;
    
    developments in patent or other proprietary rights;
    
    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.
  
    
    24,194,818 shares of common stock that are freely tradable in the public markets;
    
    248,052 shares of restricted stock that are subject to outstanding awards under our 2001
Equity Incentive Plan; and
    
    an aggregate of 2,022,457 shares of common stock that are subject to outstanding awards under
our various equity incentive plans, including shares of restricted stock units and stock
options.
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 6. EXHIBITS
  28




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SIGNATURES
   Date: May 11, 2009
    /s/Donald M. EarhartDonald M. EarhartChairman, President and Chief Executive Officer
(On behalf of the registrant)Date: May 11, 2009
    /s/James R. TalevichJames R. TalevichChief Financial Officer
(As principal financial officer) 29




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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)2.6
    
    
    Stock Purchase Agreement, dated as of September 29, 2006, by and among
I-Flow Corporation, InfuSystem, Inc., HAPC, Inc. and Iceland Acquisition
Subsidiary, Inc. (including the Form of Services Agreement, attached
thereto as Exhibit A, the Form of License Agreement attached thereto as
Exhibit B and the Term Sheet attached thereto as Exhibit C) (11)2.7
    
    
    Amendment No. 1 dated as of April 30, 2007 to the Stock Purchase Agreement
dated as of September 29, 2006 by and among I-Flow Corporation,
InfuSystem, Inc., HAPC, Inc. and Iceland Acquisition Subsidiary, Inc. (12)2.8
    
    
    Amendment No. 2 dated as of June 29, 2007 to the Stock Purchase Agreement
dated as of September 29, 2006, as amended by an Amendment No. 1 dated as
of April 30, 2007, by and among I-Flow Corporation, InfuSystem, Inc.,
HAPC, Inc. and Iceland Acquisition Subsidiary, Inc. (13)2.9
    
    
    Amendment No. 3 dated as of July 31, 2007 to the Stock Purchase Agreement
dated as of September 29, 2006, as amended by Amendment No. 1 dated as of
April 30, 2007 and an Amendment No. 2 dated as of June 29, 2007, by and
among I-Flow Corporation, InfuSystem, Inc., HAPC, Inc. and Iceland
Acquisition Subsidiary, Inc. (14)2.10
    
    
    Memorandum of Intent dated as of September 12, 2007 by and among I-Flow
Corporation, InfuSystem, Inc., HAPC, Inc. and Iceland Acquisition
Subsidiary, Inc. (15)2.11
    
    
    Amendment No. 4 dated as of September 18, 2007 to the Stock Purchase
Agreement dated as of September 29, 2006, as amended by Amendment No. 1
dated as of April 30, 2007, an Amendment No. 2 dated as of June 29, 2007
and an Amendment No. 3 dated as of July 31, 2007, by and among I-Flow
Corporation, InfuSystem, Inc., HAPC, Inc. and Iceland Acquisition
Subsidiary, Inc. (16)2.12
    
    
    Further Agreement Regarding Project Iceland dated as of October 17, 2007
by and among I-Flow Corporation, InfuSystem, Inc., HAPC, Inc. and Iceland
Acquisition Subsidiary, Inc. (17)2.13
    
    
    Acknowledgement and Agreement dated as of October 8, 2007 by and among
I-Flow Corporation, InfuSystem, Inc., HAPC, Inc., Iceland Acquisition
Subsidiary, Inc., Sean D. McDevitt and Philip B. Harris (17)2.14
    
    
    Form of Share Purchase Agreement (17)2.15
    
    
    Second Form of Share Purchase Agreement (17)2.16
    
    
    Form of Irrevocable Proxy (17)2.17
    
    
    Binding Letter of Intent dated as of December 13, 2007 by and among I-Flow
Corporation, AcryMed, Inc., Bruce L. Gibbins, Jack D. McMaken, John A.
Calhoun and James P. Fee, Jr. (18)2.18
    
    
    Agreement and Plan of Merger dated as of February 2, 2008 by and among
I-Flow Corporation, Alaska Acquisition Subsidiary, Inc., AcryMed
Incorporated, Bruce L. Gibbins, Jack D. McMaken, John A. Calhoun and James
P. Fee, Jr., in their capacities as stockholders, and John A. Calhoun, in
his capacity as the stockholder representative (19)




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Exhibit No.
    
    Exhibit3.1
    
    
    Amended and Restated Certificate of Incorporation of I-Flow Corporation, a
Delaware Corporation (6)3.2
    
    
    Bylaws of
I-Flow Corporation, as Amended and Restated (20)3.3
    
    
    Certificate of Designation Regarding Series A Junior Participating
Cumulative Preferred Stock (7)4.1
    
    
    Specimen Common Stock Certificate (8)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
    
    
    Summary of the terms of the 2009 Executive Performance Incentive Plan (20)*31.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    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.(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 March 31, 2002.




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(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 October 4, 2006.(12)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on May 1, 2007.(13)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on July 2, 2007.(14)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on July 31, 2007.(15)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on September 13, 2007.(16)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on September 19, 2007.(17)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on October 19, 2007.(18)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on December 17, 2007.(19)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on February 6, 2008.(20)
    
    Incorporated by reference to exhibit with this title filed with the Companys Current Report
on Form 8-K filed on April 3, 2009.