##### Table of Contents



UNITED STATES SECURITIES 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 March 31, 2007
 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 þ o
 o þ




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##### 



I-FLOW CORPORATION
 FORM 10-Q
 FOR THE QUARTER ENDED MARCH 31, 2007
 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
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4.
    
    Controls and Procedures
    
    
    19Part II: Other InformationItem 1.
    
    Legal Proceedings
    
    
    19Item 1A.
    
    Risk Factors
    
    
    19Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 6.
    
    Exhibits
    
    
    22SignaturesEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
(Amounts in thousands)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,750
    
    
    $
    9,288Short-term investments
    
    
    16,752
    
    
    
    18,134Accounts receivable, less allowance for
doubtful accounts of $3,210 and $3,405
at March 31, 2007 and December 31, 2006,
respectively
    
    
    17,174
    
    
    
    18,935Inventories
    
    
    15,828
    
    
    
    13,611Prepaid expenses and other current assets
    
    
    1,245
    
    
    
    1,485Deferred taxes
    
    
    3,391
    
    
    
    3,260Current assets  held for sale
    
    
    12,162
    
    
    
    11,977Total current assets
    
    
    71,302
    
    
    
    76,690Property, net
    
    
    3,185
    
    
    
    2,843Other intangible assets, net
    
    
    2,663
    
    
    
    2,754Other long-term assets
    
    
    138
    
    
    
    137Deferred taxes
    
    
    16,211
    
    
    
    14,406Non-current assets  held for sale
    
    
    16,309
    
    
    
    15,316Total assets
    
    $
    109,808
    
    
    $
    112,146LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    4,816
    
    
    $
    4,249Accrued payroll and related expenses
    
    
    5,215
    
    
    
    7,171Income taxes payable
    
    
    
    
    
    
    18Other current liabilities
    
    
    804
    
    
    
    1,078Current liabilities  held for sale
    
    
    7,227
    
    
    
    7,626Total current liabilities
    
    
    18,062
    
    
    
    20,142Other liabilities
    
    
    1,226
    
    
    
    Commitments 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; 24,214 and 23,901
shares issued and outstanding at March
31, 2007 and
December 31, 2006, respectively
    
    
    119,273
    
    
    
    119,092Accumulated other comprehensive loss
    
    
    (191
    )
    
    
    (163
    )Accumulated deficit
    
    
    (28,562
    )
    
    
    (26,925
    )Net stockholders equity
    
    
    90,520
    
    
    
    92,004Total liabilities and stockholders equity
    
    $
    109,808
    
    
    $
    112,146
  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 31,2007
    
    
    2006Net product sales
    
    $
    24,306
    
    
    $
    19,901Cost of revenues
    
    
    6,288
    
    
    
    5,322Gross profit
    
    
    18,018
    
    
    
    14,579Operating expenses:Selling and marketing
    
    
    17,141
    
    
    
    13,788General and administrative
    
    
    4,034
    
    
    
    3,062Product development
    
    
    622
    
    
    
    583Total operating expenses
    
    
    21,797
    
    
    
    17,433Operating loss
    
    
    (3,779
    )
    
    
    (2,854
    )Interest income
    
    
    279
    
    
    
    201Loss from continuing operations before income taxes
    
    
    (3,500
    )
    
    
    (2,653
    )Income tax benefit
    
    
    (1,293
    )
    
    
    (742
    )Loss from continuing operations
    
    
    (2,207
    )
    
    
    (1,911
    )Discontinued operations:Income from discontinued operations, net of tax
    
    
    1,286
    
    
    
    1,429Net loss
    
    $
    (921
    )
    
    $
    (482
    )Per share of common stock, basic and diluted:Loss from continuing operations
    
    $
    (0.09
    )
    
    $
    (0.08
    )Income from discontinued operations, net of tax
    
    
    0.05
    
    
    
    0.06Net loss
    
    $
    (0.04
    )
    
    $
    (0.02
    )Weighted average shares, basic and diluted
    
    
    23,550
    
    
    
    22,701Comprehensive Operations:Net loss
    
    $
    (921
    )
    
    $
    (482
    )Foreign currency translation loss
    
    
    (28
    )
    
    
    (27
    )Unrealized gain on investment securities
    
    
    
    
    
    
    25Comprehensive loss
    
    $
    (949
    )
    
    $
    (484
    )
  2




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I-FLOW CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (Amounts in thousands)
 Three Months EndedMarch 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (921
    )
    
    $
    (482
    )Adjustments to reconcile net loss to net cash used in operating activities:Income from discontinued operations, net of tax
    
    
    (1,286
    )
    
    
    (1,429
    )Deferred taxes
    
    
    (1,936
    )
    
    
    (769
    )Stock-based compensation
    
    
    1,163
    
    
    
    730Depreciation and amortization
    
    
    382
    
    
    
    356Provision for doubtful accounts receivable
    
    
    389
    
    
    
    171Write-off of inventory
    
    
    94
    
    
    
    180Changes in operating assets and liabilities:Accounts receivable
    
    
    1,372
    
    
    
    (2,138
    )Inventories
    
    
    (2,311
    )
    
    
    (1,253
    )Prepaid expenses and other current assets
    
    
    297
    
    
    
    242Accounts payable, accrued payroll and related expenses
    
    
    (1,523
    )
    
    
    (729
    )Income taxes payable
    
    
    (76
    )
    
    
    6Other liabilities
    
    
    802
    
    
    
    (454
    )Net cash used in operating activities from continuing operations
    
    
    (3,554
    )
    
    
    (5,569
    )Net cash provided by operating activities from discontinued operations
    
    
    1,199
    
    
    
    2,127Net cash used in operating activities
    
    
    (2,355
    )
    
    
    (3,442
    )CASH FLOWS FROM INVESTING ACTIVITIES:Property acquisitions
    
    
    (445
    )
    
    
    (422
    )Purchases of investments
    
    
    (2,092
    )
    
    
    Maturities of investments
    
    
    3,474
    
    
    
    1,916Patent acquisitions
    
    
    (54
    )
    
    
    (93
    )Net cash provided by investing activities from continuing operations
    
    
    883
    
    
    
    1,401Net cash used in investing activities from discontinued operations
    
    
    (571
    )
    
    
    (428
    )Net cash provided by investing activities
    
    
    312
    
    
    
    973CASH FLOWS FROM FINANCING ACTIVITIES:Purchase and retirement of common stock
    
    
    (1,500
    )
    
    
    Proceeds from exercise of stock options
    
    
    436
    
    
    
    765Net cash (used in) provided by financing activities from continuing operations
    
    
    (1,064
    )
    
    
    765Net cash provided by financing activities from discontinued operations
    
    
    
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (1,064
    )
    
    
    765Effect of exchange rates on cash
    
    
    (28
    )
    
    
    (27
    )Net decrease in cash and cash equivalents
    
    
    (3,135
    )
    
    
    (1,731
    )Net increase (decrease) in cash and cash equivalents from discontinued
operations
    
    
    (1,403
    )
    
    
    725Cash and cash equivalents at beginning of period
    
    
    9,288
    
    
    
    11,413Cash and cash equivalents at end of period
    
    $
    4,750
    
    
    $
    10,407SUPPLEMENTAL CASH FLOW INFORMATION:Income tax payments
    
    $
    261
    
    
    $
    SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:Property acquisitions
    
    $
    629
    
    
    $
    1,088
  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
 Accounting for Impairment or Disposal of Long-Lived Assets
  Use of Estimates
 New Accounting Pronouncements Accounting for Uncertainty in Income Taxes
 Fair Value Measurements ,
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
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Accounting for Stock-Based Compensation  Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees Share-Based Payment
  Three Months Ended March 31,(Amounts in thousands)
    
    2007
    
    
    2006Income (loss) from continuing operations:Selling and marketing
    
    $
    616
    
    
    $
    326General and administrative
    
    
    547
    
    
    
    455Subtotal
    
    
    1,163
    
    
    
    781Income (loss) from discontinued operations:Selling and administrative
    
    
    49
    
    
    
    9General and administrative
    
    
    34
    
    
    
    21Subtotal
    
    
    83
    
    
    
    30Total
    
    $
    1,246
    
    
    $
    811
  Three Months Ended March 31,2007
    
    2006Expected life (in years)
    
    
    5.0
    
    
    
    5.0Risk-free interest rate
    
    
    4.48
    %
    
    
    4.72
    %Volatility
    
    
    54
    %
    
    
    57
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
  5




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Transition Election
Related to Accounting for Tax Effects of Share-Based Payment Awards
  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, 2006
    
    
    3,294
    
    
    $
    10.66Options granted
    
    
    68
    
    
    $
    15.44Options exercised
    
    
    (68
    )
    
    $
    6.43Options forfeited or expired
    
    
    (62
    )
    
    $
    16.37Options outstanding at March 31, 2007
    
    
    3,232
    
    
    $
    10.74
    
    
    
    2.40
    
    
    $
    16,350Options vested and exercisable at March 31, 2007
    
    
    2,910
    
    
    $
    10.59
    
    
    
    2.26
    
    
    $
    15,455
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Restricted Stock and Restricted Stock Units
 i.e.
 7




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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, 2006
    
    
    522
    
    
    $
    13.89
    
    
    
    548
    
    
    $
    13.95Shares issued
    
    
    141
    
    
    
    16.43
    
    
    
    359
    
    
    
    16.13Shares vested or released
    
    
    (102
    )
    
    
    14.04
    
    
    
    (199
    )
    
    
    14.19Shares forfeited
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    14.08Nonvested shares outstanding at March 31, 2007
    
    
    561
    
    
    $
    14.50
    
    
    
    688
    
    
    $
    15.02
   2. Inventories
  March 31,
    
    
    December 31,(Amounts in thousands)
    
    2007
    
    
    2006Raw materials
    
    $
    8,767
    
    
    $
    7,784Work in process
    
    
    2,450
    
    
    
    2,024Finished goods
    
    
    4,611
    
    
    
    3,803Total
    
    $
    15,828
    
    
    $
    13,611
 3. Earnings (Loss) Per Share
 Earnings Per Share
   8




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Three Months Ended March 31,(Amounts in thousands, except per share amounts)
    
    2007
    
    
    2006Numerator:Loss from continuing operations, net of tax
    
    $
    (2,207
    )
    
    $
    (1,911
    )Income from discontinuing operations, net of tax
    
    
    1,286
    
    
    
    1,429Net loss
    
    $
    (921
    )
    
    $
    (482
    )Denominators:Denominator for basic earnings per share:Weighted-average number of common shares outstanding
    
    
    23,550
    
    
    
    22,701Effect 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
    
    
    23,550
    
    
    
    22,701Basic and diluted earnings per share:Loss from continuing operations, net of tax
    
    $
    (0.09
    )
    
    $
    (0.08
    )Income from discontinuing operations, net of tax
    
    
    0.05
    
    
    
    0.06Net loss
    
    $
    (0.04
    )
    
    $
    (0.02
    )
  4. Goodwill and Other Intangible Assets
 Goodwill
and Other Intangible Assets
  As of March 31, 2007Carrying
    
    
    Accumulated(Amounts in thousands)
    
    Amount
    
    
    Amortization
    
    NetPatents
    
    $
    3,278
    
    
    $
    1,407
    
    
    $
    1,871Licensing Rights
    
    
    1,101
    
    
    
    309
    
    
    
    792Total
    
    $
    4,379
    
    
    $
    1,716
    
    
    $
    2,663
 As of December 31, 2006Carrying
    
    
    Accumulated(Amounts in thousands)
    
    Amount
    
    
    Amortization
    
    
    NetPatents
    
    $
    3,286
    
    
    $
    1,348
    
    
    $
    1,938Licensing Rights
    
    
    1,101
    
    
    
    285
    
    
    
    816Total
    
    $
    4,387
    
    
    $
    1,633
    
    
    $
    2,754
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5. Stockholders Equity
  6. Discontinued Operations
   Three Months Ended March 31,(Amounts in thousands)
    
    2007
    
    2006Operating revenues
    
    $
    7,874
    
    
    $
    7,717Operating income (1)
    
    
    1,752
    
    
    
    2,318Income taxes
    
    
    466
    
    
    
    889Income from discontinued operations (1)
    
    
    1,286
    
    
    
    1,429
 
 (1)
    
    Includes $257,000 of divestiture expenses recorded during the three months ended March 31,
2007. 10




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March 31,
    
    
    December 31,(Amounts in thousands)
    
    2007
    
    
    2006Cash
    
    $
    3,359
    
    
    $
    1,956Accounts receivable, less allowance for
doubtful accounts of $3,165 and $1,668
at March 31, 2007 and December 31, 2006,
respectively
    
    
    8,345
    
    
    
    9,630Inventories
    
    
    303
    
    
    
    252Prepaid expenses and other current assets
    
    
    155
    
    
    
    139Total current assets
    
    $
    12,162
    
    
    $
    11,977Property, net (1)
    
    $
    14,135
    
    
    $
    13,142Goodwill
    
    
    2,174
    
    
    
    2,174Total noncurrent assets
    
    $
    16,309
    
    
    $
    15,316Accounts payable
    
    $
    1,300
    
    
    $
    1,884Accrued payroll and related expenses
    
    
    516
    
    
    
    1,056Accrued use taxes payable
    
    
    1,466
    
    
    
    1,392Income taxes payable
    
    
    (162
    )
    
    
    23Deferred taxes (2)
    
    
    3,022
    
    
    
    3,267Other liabilities
    
    
    1,085
    
    
    
    4Total current liabilities
    
    $
    7,227
    
    
    $
    7,626
 
 (1)
    
    In accordance with SFAS 144, the Company ceased recognizing depreciation expense for all
fixed assets recorded in discontinued operations beginning in the fourth quarter of 2006.(2)
    
    The deferred tax liability consists primarily of depreciation and the basis adjustment in
accordance with Emerging Issues Task Force (EITF) Issue No. 93-17, Recognition of Deferred
Tax Assets for a Parent Companys Excess Tax Basis in the Stock of a Subsidiary that is
Accounted for as a Discontinued Operation(EITF 93-17). 7. Income Taxes
 Accounting for Income Taxes
    11




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8. Commitments and Contingencies
     12




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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
  Overview
  ®
 Discontinued Operations of InfuSystem
 Accounting for Impairment or Disposal of Long-Lived Assets
 13




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Three Months Ended March 31,(Amounts in thousands)
    
    2007
    
    2006Operating revenues
    
    $
    7,874
    
    
    $
    7,717Operating income (1)
    
    
    1,752
    
    
    
    2,318Income taxes
    
    
    466
    
    
    
    889Income from discontinued operations (1)
    
    
    1,286
    
    
    
    1,429
 
 (1)
    
    Includes $257,000 of divestiture expenses recorded during the three months ended March 31,
2007.  Results of Operations
 Revenue
   ® ® ®
  14




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Cost of Revenues
  Selling and Marketing Expenses
     General and Administrative Expenses
     15




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Product Development Expenses
  Interest Income, Net
  Income Taxes
  Liquidity and Capital Resources
     16




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Total Number of
    
    
    Dollar Value ofShares Purchased
    
    
    Shares That May YetAverage
    
    
    Under the Stock
    
    
    Be Purchased UnderTotal Number of
    
    
    Price Paid
    
    
    Repurchase Program
    
    
    the Stock Repurchase2007
    
    Shares Purchased (1)
    
    
    Per Share
    
    
    (2)
    
    
    Program (2)January 1  January 31
    
    
    64,974
    
    
    $
    15.66
    
    
    
    
    
    
    $
    February 1  February 28
    
    
    29,780
    
    
    
    16.17
    
    
    
    
    
    
    
    March 1  March 31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    94,754
    
    
    $
    15.83
    
    
    
    
    
    
    $
    
 
 (1)
    
    The total number of shares purchased includes 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 1,000,000 shares of the
Companys common stock. The program expired on July 27, 2006. No shares were repurchased
under the stock repurchase program during the three months ended March 31, 2006.  17




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New Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes
 Fair Value Measurements ,
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 Critical Accounting Policies
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   Foreign Currency
  18




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Item 4. CONTROLS AND PROCEDURES
   
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  RISK FACTORS RELATING TO OUR BUSINESS AND THE INDUSTRY IN WHICH WE OPERATE
 The pending sale of InfuSystem to HAPC may not be consummated.
  
    
    our cash flow and financial condition could be adversely affected if the Company is
unable to complete the transaction;
    
    the current stock price of our common stock may reflect a market assumption that the
sale of InfuSystem will occur, and, thus, a failure to complete the transaction could
result in a negative perception by the stock market of us generally and a decline in the
market price of our common stock;
    
    changes in third-party reimbursement rates may adversely impact InfuSystems revenues.
InfuSystem depends primarily on third-party reimbursement for the collection of its
revenues. InfuSystem is paid directly by private insurers and governmental agencies, often
on a fixed fee basis, for infusion services
 19




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provided to patients. InfuSystems oncology revenues comprised 24% and 28% of our
consolidated revenues for the three months ended March 31, 2007 and 2006, respectively. If
the average fees allowable by private insurers or governmental agencies were reduced, the
negative impact on revenues of InfuSystem could have a material adverse effect on our
financial condition and results of operations;
    
    our business could be adversely affected if we are unable to retain key customers, our
employees at InfuSystem or attract replacements; and
    
    the value of our deferred tax assets could be impaired if the Company is unable to
complete the transaction.
 We have experienced net losses in prior periods and have an accumulated deficit. 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.
  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.
  20




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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 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.
  
    
    23,652,502 shares of common stock that are freely tradable in the public markets;
    
    561,074 shares of restricted stock that are subject to outstanding awards under our 2001
Equity Incentive Plan;
    
    185,109 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); and
    
    an aggregate of 3,920,100 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.
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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 6. EXHIBITS
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SIGNATURES
  I-FLOW CORPORATIONDate: May 9, 2007
    
    /s/Donald M. EarhartDonald M. EarhartChairman, President and Chief Executive Officer(On behalf of the registrant)Date: May 9, 2007
    
    /s/James R. TalevichJames R. TalevichChief Financial Officer(As principal financial officer)
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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)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 (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)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
 
 (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.




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(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.(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.