##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 0-18338
  I-FLOW CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

33-0121984(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)20202 Windrow Drive,
    Lake Forest, CA(Address of Principal
    Executive Offices)

92630(Zip Code)   Registrants telephone number, including area code:
 (949) 206-2700
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value
    Rights to Purchase Preferred Stock

The NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### Table of Contents





PART I
  Item 1.
    Business.  The
    Company
    ON-Q ® ON-Q
  ON-Q
  (949) 206-2700 www.iflo.com.
  Recent
    Developments
    tm ®
   1




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##### Table of Contents



Acquisitions
    and Divestitures
      The
    Companys Products
      Net Revenues by Market Segment

2007


2006


2005Regional Anesthesia


77
%


73
%


69
%IV Infusion Therapy


23
%


27
%


31
%   Regional
    Anesthesia
  Pain
    Relief Kits
  ® ® ® ®
  Journal of American College of Surgeons
 2




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##### Table of Contents



www.AskYourSurgeon.com
  IV
    Infusion Therapy
  Elastomerics
  ® tm
  Non-Electric IV
    Bag Delivery Systems
  ®
  Sales and
    Distribution
           3




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##### Table of Contents



I-Flows
      Sales to Unaffiliated Customers:

2007


2006


2005(Amounts in thousands)United States

$
100,790


$
78,136


$
59,214Europe

$
12,371


$
12,840


$
10,497Asia/Pacific Rim


2,085



1,362



1,328Other


1,228



1,244



1,080All Foreign Countries in the Aggregate

$
15,684


$
15,446


$
12,905   Competition
      4




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##### Table of Contents



CompanysNumber of Known


EstimatedMarket


CompetitiveU.S. Market Description

Participants(1)


PositionRegional AnesthesiaAcute Pain Kits (wound site pain management)


13



1IV Infusion TherapyElastomerics


4



1     (1)
    
    Includes the Company  Manufacturing
    and Operations
    Backlog
    Product
    Development
    Patents
    and Trademarks
        Government
    Regulation
   5




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6




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##### Table of Contents



Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K www.iflo.com
  Item 1A.
    Risk
    Factors.  RISK
    FACTORS RELATING TO OUR BUSINESS AND THE INDUSTRY IN WHICH WE
    OPERATE
  We have
    experienced net losses in prior periods. Future losses are
    possible.
    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.
   7




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##### Table of Contents



We have
    recently acquired AcryMed in an effort to expand our strategic
    focus to include general surgical site care management. If we
    are unsuccessful in integrating AcryMeds operations with
    our own, or if we fail to successfully develop and commercialize
    AcryMeds technologies, our results of operations may be
    adversely affected.
    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.
    e.g.
  Our
    customers frequently receive reimbursement from private insurers
    and governmental agencies. Any change in the overall
    reimbursement system may adversely impact our
    business.
   8




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##### Table of Contents



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.
   9




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##### Table of Contents



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.
    We
    manufacture the majority of our products in Mexico. Any
    difficulties or disruptions in the operation of our plant may
    adversely impact our operations.
    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.
     10




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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.
    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.
    Additional
    financings may be dilutive to stockholders, involve the issuance
    of securities that are more senior to our stock or impose
    operational restrictions.
    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.
   11




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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
  Failure
    to achieve and maintain effective internal control over
    financial reporting in accordance with Section 404 of the
    Sarbanes-Oxley Act could have a material adverse effect on our
    business and our 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; 12




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##### Table of Contents




    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 or holders of
    awards under our equity incentive plans could negatively affect
    the market price of our stock and make it more difficult for us
    to sell stock in the future.
    
    24,412,463 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;
    165,009 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 3,107,924 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.    Anti-takeover
    devices may prevent a sale, or changes in the management, of
    I-Flow.
      We do not
    pay dividends and this may negatively affect the price of our
    stock.
   13




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In the
    future, our common stock may be removed from listing on the
    Nasdaq Global Market 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 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.          Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   14




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EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Name

Age

PositionDonald M. Earhart


63


President, Chief Executive Officer and Chairman of the BoardJames J. Dal Porto


54


Executive Vice President, Chief Operating Officer, Director and
    SecretaryJames R. Talevich


57


Chief Financial Officer and Treasurer   Donald M. Earhart
  James J. Dal Porto
  James R. Talevich
 15




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##### Table of Contents



PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Common
    Stock Information
    High


Low20061st Quarter

$
16.64


$
12.862nd Quarter

$
14.10


$
10.823rd Quarter

$
12.80


$
10.104th Quarter

$
15.71


$
12.7720071st Quarter

$
16.92


$
13.602nd Quarter

$
17.47


$
14.033rd Quarter

$
20.86


$
16.524th Quarter

$
19.77


$
14.75       Information
    About Our Equity Compensation Plans
    Weighted-


Number of SecuritiesAverage Exercise


Remaining Available forNumber of Securities


Price of


Future Issuance Underto be Issued Upon


Outstanding


Equity CompensationExercise of


Options,


Plans (ExcludingOutstanding Options,


Warrants and


Securities Reflected inPlan Category

Warrants and Rights (A)


Rights


Column (A))Equity compensation plans approved by security holders


3,102,924
(1)

$
8.85



2,519,517
(2)Equity compensation plans not approved by security holders


5,000
(3)

$
15.20




(4)     (1)
    
    Includes 595,000 shares of restricted stock units with no
    exercise price and outstanding options, totaling
    2,507,924 shares, to purchase shares of the Companys
    common stock under: (a) the 1992 Non-Employee Director
    Stock Option Plan; (b) the 1996 Stock Incentive Plan; and
    (c) the I-Flow Corporation 2001 Equity Incentive Plan.(2)
    
    All shares of common stock that remain available for future
    issuance are under the I-Flow Corporation 2001 Equity Incentive
    Plan. 16




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##### Table of Contents



(3)
    
    Includes options to purchase 5,000 shares of the
    Companys common stock issued to Thomas Winters, M.D.
    to acquire the non-exclusive rights to utilize intellectual
    property owned by Dr. Winters, including registered United
    States patents. Dr. Winters was not, at the time, an
    employee, director or consultant to the Company.(4)
    
    No shares available for future issuance. The Companys 2001
    Restricted Stock Plan and 2003 Restricted Stock Plan have both
    been terminated.  Material
    Features of Non-Stockholder Approved Plans
  Winters
    Options
   17




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##### Table of Contents



Stock
    Performance Graph
    
  12/31/02


12/31/03


12/31/04


12/31/05


12/31/06


12/31/07I-Flow Corporation


$
100.00



$
892.31



$
1,168.59



$
937.18



$
958.33



$
1,011.54Industry Index



100.00




147.95




173.33




190.30




200.58




255.03Nasdaq Market Index



100.00




150.84




164.13




167.86




185.16




204.70  18




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##### Table of Contents



Item 6.
    Selected
    Financial Data.  Form 10-K. Form 10-K.
  Years Ended December 31,2007


2006


2005


2004


2003(Amounts in thousands, except per share amounts)Consolidated Statements of Operations Data:(1)(2)Net product sales

$
116,474


$
93,582


$
72,119


$
51,796


$
34,021Cost of revenues


32,025



26,267



19,662



15,703



13,285Gross profit


84,449



67,315



52,457



36,093



20,736Operating expenses:Selling and marketing


71,928



57,731



49,899



41,199



17,450General and administrative


17,664



15,012



16,269



10,637



6,153Product development


2,657



2,436



2,549



2,779



2,361Total operating expenses


92,249



75,179



68,717



54,615



25,964Operating loss


(7,800
)


(7,864
)


(16,260
)


(18,522
)


(5,228
)Impairment loss on investment


(6,118
)














Interest and other income, net


2,425



933



937



525



(31
)Loss from continuing operations before income taxes


(11,493
)


(6,931
)


(15,323
)


(17,997
)


(5,259
)Income tax provision (benefit)


(2,500
)


(17,561
)


(2,334
)


2,050



(2,015
)Income (loss) from continuing operations, net of tax


(8,993
)


10,630



(12,989
)


(20,047
)


(3,244
)Discontinued operations:Income from discontinued operations, net of tax


4,825



3,044



4,584



2,937



1,418Gain on sale of discontinued operations, net of tax


45,396















2,283Net income (loss)

$
41,228


$
13,674


$
(8,405
)

$
(17,110
)

$
457Per share of common stock, basic:Income (loss) from continuing operations, net of tax

$
(0.37
)

$
0.47


$
(0.58
)

$
(0.97
)

$
(0.20
)Income from discontinued operations, net of tax


0.20



0.13



0.20



0.14



0.09Gain on sale of discontinued operations, net of tax


1.90















0.14Net income (loss)

$
1.73


$
0.60


$
(0.38
)

$
(0.83
)

$
0.03Per share of common stock, diluted:Income (loss) from continuing operations, net of tax

$
(0.37
)

$
0.44


$
(0.58
)

$
(0.97
)

$
(0.20
)Income from discontinued operations, net of tax


0.20



0.13



0.20



0.14



0.09Gain on sale of discontinued operations, net of tax


1.90















0.14Net income (loss)

$
1.73


$
0.57


$
(0.38
)

$
(0.83
)

$
0.03Weighted-average common shares outstanding:Basic


23,889



22,887



22,397



20,628



16,384Diluted


23,889



24,071



22,397



20,628



16,384Consolidated Balance Sheet Data:(1)(2)Working capital

$
117,187


$
56,548


$
49,733


$
57,948


$
31,467Total assets


188,655



112,146



82,953



84,430



51,896Long-term obligations


6,402















Net stockholders equity

$
155,576


$
92,004


$
70,049


$
73,219


$
44,773     (1)
    
    In October 2007, the Company completed its sale of InfuSystem to
    HAPC. In accordance with Statement of Financial Accounting
    Standards (SFAS) No. 144, Accounting for
    Impairment or Disposal of Long-Lived Assets(SFAS
    144), the Company has reclassified the results from
    InfuSystem as discontinued operations, reclassifying previously
    reported results to reflect all prior periods on a comparable
    basis. See Note 4 of Notes to Consolidated Financial
    Statements. 19




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##### Table of Contents



In November 2003, the Company sold Spinal Specialties, Inc., a
    wholly owned subsidiary. The operations of Spinal Specialties
    have been excluded from continuing operations in the year ended
    December 31, 2003.(2)
    
    In 2006, the Company recorded a release of the valuation
    allowance for deferred tax assets with an incremental tax
    benefit of approximately $16.8 million. The income tax
    benefit was consistent with the guidance in Statement of
    Financial Accounting Standards No. 109, Accounting for
    Income Taxes, which addresses financial accounting for
    deferred tax assets. The Company regularly reviews its deferred
    tax assets for recoverability and establishes a valuation
    allowance when it is more likely than not, based on available
    evidence, that projected future taxable income will be
    insufficient to recover the deferred tax assets. Due to the
    then-pending sale of InfuSystem to HAPC, management believed it
    was more likely than not that the Company would realize the
    benefits of the existing net deferred tax asset at
    December 31, 2006. In the event the Company is unable to
    operate at a profit and unable to generate sufficient future
    taxable income, it would be required to increase the valuation
    allowance against all of its deferred tax assets.The Company recorded a full valuation allowance against its
    deferred tax assets in the fourth quarter of 2004.  SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)
  2007

Mar. 31


June 30


Sept. 30


Dec. 31(1)(Amounts in thousands, except per share amounts)Total revenues

$
24,306


$
29,075


$
28,231


$
34,862Gross profit


18,018



21,021



20,730



24,680Loss from continuing operations before income taxes


(3,500
)


(2,366
)


(1,123
)


(4,504
)Loss from continuing operations, net of tax


(2,207
)


(1,570
)


(845
)


(4,371
)Income (loss) from discontinued operations, net of tax


1,286



2,169



2,004



(634
)Gain on sale of discontinued operations, net of tax














45,396Net income (loss)


(921
)


599



1,159



40,391Per share of common stock  basic and diluted:Loss from continuing operations, net of tax


(0.09
)


(0.06
)


(0.03
)


(0.18
)Net income (loss)


(0.04
)


0.03



0.05



1.66Weighted-average common shares  basic and diluted


23,550



23,694



24,010



24,304   2006

Mar. 31


June 30


Sept. 30(2)


Dec. 31Total revenues

$
19,901


$
22,435


$
23,813


$
27,433Gross profit


14,579



16,419



16,877



19,440Loss from continuing operations before income taxes


(2,653
)


(1,504
)


(1,177
)


(1,597
)Income (loss) from continuing operations, net of tax


(1,911
)


(840
)


14,414



(1,033
)Income (loss) from discontinued operations, net of tax


1,429



1,273



(826
)


1,168Net income (loss)


(482
)


433



13,588



135Per share of common stock  basic:Income (loss) from continuing operations


(0.08
)


(0.04
)


0.62



(0.04
)Net income (loss)


(0.02
)


0.02



0.58



0.01Per share of common stock  diluted:Income (loss) from continuing operations, net of tax


(0.08
)


(0.04
)


0.59



(0.04
)Net income (loss)


(0.02
)


0.02



0.55



0.01Weighted-average common shares  basic


22,701



23,346



23,429



23,124Weighted-average common shares  diluted


22,701



23,346



24,544



23,124     (1)
    
    In October 2007, the Company completed its sale of InfuSystem to
    HAPC. In accordance with Statement of Financial Accounting
    Standards (SFAS) No. 144, Accounting for
    Impairment or Disposal of Long-Lived Assets(SFAS
    144), the Company has reclassified the results from
    InfuSystem as discontinued operations, reclassifying previously
    reported results to reflect all prior periods on a comparable
    basis. See Note 4 of Notes to Consolidated Financial
    Statements. 20




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##### Table of Contents



(2)
    
    In 2006, the Company recorded a release of the valuation
    allowance for deferred tax assets with an incremental tax
    benefit of approximately $16.8 million. The income tax
    benefit was consistent with the guidance in Statement of
    Financial Accounting Standards No. 109, Accounting for
    Income Taxes, which addresses financial accounting for
    deferred tax assets. The Company regularly reviews its deferred
    tax assets for recoverability and establishes a valuation
    allowance when it is more likely than not, based on available
    evidence, that projected future taxable income will be
    insufficient to recover the deferred tax assets. Due to the
    then-pending sale of InfuSystem to HAPC, management believed it
    was more likely than not that the Company would realize the
    benefits of the existing net deferred tax asset at
    September 30, 2006 and December 31, 2006. In the event
    the Company is unable to operate at a profit and unable to
    generate sufficient future taxable income, it would be required
    to increase the valuation allowance against all of its deferred
    tax assets.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Statements
  Forms 10-Q 8-K
  Overview
    ®
 21




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##### Table of Contents



Discontinued
    Operations of InfuSystem
  ®
       22




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##### Table of Contents



Accounting for Impairment or
    Disposal of Long-Lived Assets
  Year Ended December 31,2007(1)(2)


2006(2)


2005(Amounts in thousands)Operating revenues

$
25,001


$
31,716


$
28,525Operating income

$
7,764


$
7,007


$
7,445Income taxes


2,939



3,963



2,861Income from discontinued operations

$
4,825


$
3,044


$
4,584     (1)
    
    Includes financial results for InfuSystem for the period
    January 1, 2007 through October 25, 2007, which was
    the date the sale of InfuSystem was consummated.(2)
    
    InfuSystem recorded approximately $2,090,000 of divestiture
    expenses during the year ended December 31, 2006. In
    October 2007, at the closing of the sale of InfuSystem, the
    Company received reimbursement of approximately $946,000 by HAPC
    of certain divestiture expenses incurred in 2006 and 2007 by the
    Company directly resulting from the sale transaction, including
    legal, audit and other professional fees. Since the
    reimbursement of $946,000 included payments for services
    incurred for 2006, divestiture expenses recorded during the year
    ended December 31, 2007 resulted in a net credit of
    approximately $245,000.  Consolidated
    Results of Operations for the Year Ended December 31, 2007
    Compared to the Year Ended December 31, 2006
  Revenues
      ® ® ® tm
   23




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##### Table of Contents



Cost
    of Revenues
    Selling
    and Marketing Expenses
        General
    and Administrative Expenses
      Product
    Development Expenses
   24




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##### Table of Contents



Impairment
    Loss on Investments
  Accounting for
    Certain Investments in Debt and Equity Securities
  Interest
    and Other Income, Net
    Income
    Taxes
  Accounting for Income Taxes
     25




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##### Table of Contents



Consolidated
    Results of Operations for the Year Ended December 31, 2006
    Compared to the Year Ended December 31, 2005
  Revenue
        Cost
    of Revenues
    Selling
    and Marketing Expenses
      SFAS No. 123-revised Share-Based Payment
 26




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##### Table of Contents



General
    and Administrative Expenses
        Product
    Development Expenses
    Interest
    and Other Income, Net
    Income
    Taxes
  Accounting for Income Taxes
 27




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##### Table of Contents



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). EITF 93-17 EITF 93-17,
  Liquidity
    and Capital Resources
           28




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##### Table of Contents



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














April 1  April 30














May 1  May 31














June 1  June 30














July 1  July 31














August 1  August 31














September 1  September 30














October 1  October 31














November 1  November 30














December 1  December 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. 29




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##### Table of Contents



(2)
    
    In July 2004, the Companys board of directors authorized
    the repurchase of up to 1,000,000 shares of the
    Companys common stock. The stock repurchase program was
    extended in May 2005 and expired on July 27, 2006. No
    shares were repurchased under the stock repurchase program
    during the year ended December 31, 2007.    Contractual
    Obligations and Commercial Commitments
    Payment Due by PeriodLess than


1 to 3


3 to 5


More than1 Year


Years


Years


5 Years


Total(Amounts in thousands)Operating Lease Obligations for Facilities

$
970


$
1,278


$



$



$
2,248Purchase Commitments with Suppliers(1)


7,511















7,511Total Contractual Obligations and Commercial Commitments

$
8,481


$
1,278


$



$



$
9,759     (1)
    
    Includes contractual agreements and purchase orders for raw
    materials, finished goods and services to be incurred in the
    ordinary course of business, which are enforceable and legally
    binding.  Accounting for Uncertainty in Income Taxes Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others
  New
    Accounting Pronouncements
    Fair Value Measurements ,
 30




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##### Table of Contents



The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Business Combinations Business
    Combinations
  Critical
    Accounting Policies
    Revenue
    Recognition
       31




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##### Table of Contents



Accounts
    Receivable
    Inventories
  part-by-part first-in,
  Short-Term
    Investments
  Accounting for Certain Investments in Debt and Equity
    Securities ,
  Deferred
    Taxes
   32




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##### Table of Contents



Stock-Based
    Compensation
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.  Interest
    Rate Risk
      Foreign
    Currency
    Item 8.
    Financial
    Statements and Supplementary Data.  Financial
    Statements
   33




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##### Table of Contents



Financial
    Statement Schedule
 SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS  Balance at


Charged to





Balance atBeginning of


Costs





End ofClassification

Period


and Expenses


Deductions(1)


Period(Amounts in thousands)Year Ended December 31, 2005:Allowance for doubtful accounts

$
2,900


$
1,926


$
(1,454
)

$
3,372Reserve for obsolete inventories


923



232



(76
)


1,079Year Ended December 31, 2006:Allowance for doubtful accounts


3,372



4,667



(2,966
)


5,073Reserve for obsolete inventories


1,079



73



(61
)


1,091Year Ended December 31, 2007:Allowance for doubtful accounts


5,073



5,700



(8,811
)(2)


1,962Reserve for obsolete inventories


1,091



639



(928
)(2)


802       (1)
    
    Deductions in all years reported represent reductions to the
    reserve accounts and the related asset accounts. Specifically,
    deductions from the reserve for allowance for doubtful accounts
    represent the write-off of uncollectible accounts receivable
    balances. Deductions from the reserve for obsolete inventories
    represent the write-off and disposal of specific inventory items.(2)
    
    Includes the write-off of reserve accounts of approximately
    $6,639,000 and $20,000 for the allowance for doubtful accounts
    and reserve for obsolete inventories of discontinued operations,
    respectively, due to the sale of InfuSystem in October 2007.  Selected
    Quarterly Financial Data
    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (a)
    Disclosure
    Controls and Procedures  Rules 13a-15(e) 15d-15(e)
  (b)
    Management
    Report on Internal Control Over Financial
    Reporting  Rules 13a-15(f) 15d-15(f)
 34




---



##### Table of Contents




    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the Company;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.            (c)
    Change
    in Internal Control Over Financial Reporting    Item 9B.
    Other
    Information   35




---



##### Table of Contents



PART III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence.    Item 14.
    Principal
    Accounting Fees and Services.   36




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##### Table of Contents



PART IV
  Item 15.
    Exhibits,
    Financial Statement Schedules.    Page in ThisReport(1) Financial StatementsThe documents described in the Index to Consolidated
    Financial Statements are included in this report


38(2) Financial Statement Schedule included herein:Schedule II  Valuation and Qualifying
    Accounts


34All other schedules are omitted, as the required information is
    inapplicable.(3) ExhibitsThe list of exhibits contained in the accompanying Index to
    Exhibits is incorporated herein by reference.     (b)
    
    See (a)(3) above.(c)
    
    There are no financial statements required by
    Regulation S-X
    (17 CFR 210) which are or will be excluded from the
    annual report to shareholders by
    Rule 14a-3(b). 37




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  
  Consolidated
    Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheets as of
    December 31, 2007 and 2006


F-3Consolidated Statements of Operations and
    Comprehensive Operations For the Years Ended December 31,
    2007, 2006 and 2005


F-4Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2007, 2006 and
    2005


F-5Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


F-6Notes to Consolidated Financial Statements


F-7Financial Statement
    Schedule Schedule II  Valuation and
    Qualifying Accounts


34EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   38




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm               F-1




---



##### Table of Contents



F-2




---



##### Table of Contents



I-FLOW
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,


December 31,2007


2006(Amounts in thousands,except share and pershare amounts)ASSETSCurrent assets:Cash and cash equivalents

$
78,571


$
9,288Short-term investments


14,379



18,134Short-term investments  HAPC common stock


10,533



Accounts receivable, less allowance for doubtful accounts of
    $1,962 and $3,405 at December 31, 2007 and 2006,
    respectively


22,443



18,935Inventories


13,128



13,611Prepaid expenses and other current assets


1,267



1,485Note receivable, HAPC  current


2,044



Deferred taxes


1,499



3,260Current assets  held for sale






11,977Total current assets


143,864



76,690Property, net


3,318



2,843Other intangible assets, net


2,586



2,754Other long-term assets


133



137Note receivable, HAPC  noncurrent


30,250



Deferred taxes


8,504



14,406Non-current assets  held for sale






15,316Total assets

$
188,655


$
112,146LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
4,570


$
4,249Accrued payroll and related expenses


7,724



7,171Income taxes payable


12,450



18Other current liabilities


1,933



1,078Current liabilities  held for sale






7,626Total current liabilities


26,677



20,142Other liabilities (Note 7)


6,402



Commitments and contingencies (Note 8)Stockholders equity Preferred stock, $0.001 par value
    per share; 5,000,000 shares authorized; no shares issued
    and outstanding






Common stock, $0.001 par value per share;
    40,000,000 shares authorized, 24,973,537 and
    23,900,869 shares issued and outstanding at
    December 31, 2007 and 2006, respectively


142,197



119,092Accumulated other comprehensive loss


(207
)


(163
)Retained earnings (accumulated deficit)


13,586



(26,925
)Net stockholders equity


155,576



92,004Total liabilities and stockholders equity

$
188,655


$
112,146   See accompanying Notes to Consolidated Financial
    Statements.
 F-3




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##### Table of Contents



I-FLOW
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE
    OPERATIONS
  Year Ended December 31,2007


2006


2005(Amounts in thousands, except pershare amounts)Net product sales

$
116,474


$
93,582


$
72,119Cost of revenues


32,025



26,267



19,662Gross profit


84,449



67,315



52,457Operating expensesSelling and marketing


71,928



57,731



49,899General and administrative


17,664



15,012



16,269Product development


2,657



2,436



2,549Total operating expenses


92,249



75,179



68,717Operating loss


(7,800
)


(7,864
)


(16,260
)Impairment loss on investment


(6,118
)






Interest, net


2,425



933



937Loss from continuing operations before income taxes


(11,493
)


(6,931
)


(15,323
)Income tax benefit


(2,500
)


(17,561
)


(2,334
)Income (loss) from continuing operations, net of tax


(8,993
)


10,630



(12,989
)Discontinued operations:Income from discontinued operations, net of tax


4,825



3,044



4,584Gain on sale of discontinued operations, net of tax


45,396







Net income (loss)

$
41,228


$
13,674


$
(8,405
)Per share of common stock, basic:Income (loss) from continuing operations, net of tax

$
(0.37
)

$
0.47


$
(0.58
)Income from discontinued operations, net of tax


0.20



0.13



0.20Gain on sale of discontinued operations, net of tax


1.90







Net income (loss)

$
1.73


$
0.60


$
(0.38
)Per share of common stock, diluted:Income (loss) from continuing operations, net of tax

$
(0.37
)

$
0.44


$
(0.58
)Income from discontinued operations, net of tax


0.20



0.13



0.20Gain on sale of discontinued operations, net of tax


1.90







Net income (loss)

$
1.73


$
0.57


$
(0.38
)Weighted-average shares:Basic


23,889



22,887



22,397Diluted


23,889



24,071



22,397Comprehensive Operations:Net income (loss)

$
41,228


$
13,674


$
(8,405
)Unrealized gain (loss) on securities


7



96



(32
)Foreign currency translation adjustments


(51
)


(17
)


80Comprehensive income (loss)

$
41,184


$
13,753


$
(8,357
)   See accompanying Notes to Consolidated Financial
    Statements.
 F-4




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##### Table of Contents



I-FLOW
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  Accumulated


RetainedOther


EarningsCommon Stock


Comprehensive


(AccumulatedShares


Amount


Income (Loss)


Deficit)


Net(Amounts in thousands)Balance, January 1, 2005


22,220


$
105,703


$
(290
)

$
(32,194
)

$
73,219Exercise of common stock options and warrants and vested
    restricted stock units


533



1,347











1,347Stock-based compensation






7,214











7,214Issuance of stock from stock upward repricing event


162Purchase and retirement of treasury stock


(286
)


(3,425
)










(3,425
)Issuance of common stock options for licensing rights






51











51Unrealized loss on securities










(32
)






(32
)Foreign currency translation adjustment










80







80Net loss














(8,405
)


(8,405
)Balance, December 31, 2005


22,629



110,890



(242
)


(40,599
)


70,049Exercise of common stock options and warrants and vested
    restricted stock units


745



2,691











2,691Stock-based compensation






5,511











5,511Issuance of restricted stock awards


522Issuance of stock from stock upward repricing event


5Unrealized gain on securities










96







96Foreign currency translation adjustment










(17
)






(17
)Net income














13,674



13,674Balance, December 31, 2006


23,901



119,092



(163
)


(26,925
)


92,004Cumulative effect of adjustments from adoption of FIN 48
    (Note 7)














(717
)


(717
)Balance, January 1, 2007


23,901



119,092



(163
)


(27,642
)


91,287Exercise of common stock options and warrants and vested
    restricted stock units


1,027



7,096











7,096Tax benefit from exercise of stock options and vested restricted
    stock and restricted stock units






10,248











10,248Stock-based compensation






7,261











7,261Tax shares withheld and retired in connection with vested
    restricted stock and restricted stock units


(95
)


(1,500
)










(1,500
)Issuance of restricted stock awards


141Unrealized gain on securities










7







7Foreign currency translation adjustment










(51
)






(51
)Net income














41,228



41,228Balance, December 31, 2007


24,974


$
142,197


$
(207
)

$
13,586


$
155,576   See accompanying Notes to Consolidated Financial
    Statements.
 F-5




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##### Table of Contents



I-FLOW
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(Amounts in thousands)Cash flows from operating activities:Net income (loss)

$
41,228


$
13,674


$
(8,405
)Income from discontinued operations, net of tax


(4,825
)


(3,044
)


(4,584
)Gain on sale of discontinued operations, net of tax


(45,396
)






Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Deferred taxes


7,663



(17,666
)


(1,106
)Stock-based compensation


6,515



5,116



6,129Impairment loss on investment


6,118







Excess tax benefit from exercise of stock options and vested
    restricted stock and restricted stock units


(10,748
)






Depreciation and amortization


1,604



1,432



1,416Provision for doubtful accounts receivable


730



442



666Write-off of inventory obsolescence


633



72



232Loss (gain) on disposal of property


(2
)


40



Changes in operating assets and liabilities, net of effect of
    discontinued operations:Accounts receivable


(4,238
)


(5,954
)


(3,004
)Inventories


(150
)


(2,154
)


(3,622
)Prepaid expenses and other


187



(279
)


(409
)Accounts payable and accrued payroll and related expenses


826



3,289



(72
)Income taxes payable


22,680



(210
)


146Other liabilities


4,084



152



218Net cash provided by (used in) operating activities from
    continuing operations


26,909



(5,090
)


(12,395
)Net cash provided by operating activities of discontinued
    operations


3,276



8,872



6,519Net cash provided by (used in) operating activities


30,185



3,782



(5,876
)Cash flows from investing activities:Origination of note receivable, HAPC


(32,703
)






Repayments on note receivable, HAPC


409







Receipt of deferred financing fees from note receivable, HAPC


2,586







Capital expenditures


(1,437
)


(1,193
)


(583
)Purchase of HAPC common stock


(16,652
)






Purchases of other investments


(18,121
)


(19,600
)


(18,825
)Maturities of investments


21,884



14,838



37,620Sale of investments










1,984Patents and licensing right acquisitions


(389
)


(628
)


(1,631
)Net cash provided by (used in) investing activities from
    continuing operations


(44,423
)


(6,583
)


18,565Net cash provided by (used in) investing activities from
    discontinued operations


67,616



(2,506
)


(6,835
)Net cash provided by (used in) investing activities


23,193



(9,089
)


11,730Cash flows from financing activities:Purchase and retirement of common and treasury stock


(1,500
)






(3,425
)Proceeds from exercise of stock options and warrants


7,096



2,691



1,347Excess tax benefit from exercise of stock options and vested
    restricted stock and restricted stock units


10,748







Net cash provided by (used in) financing activities from
    continuing operations


16,344



2,691



(2,078
)Net cash provided by financing activities from discontinued
    operations










Net cash provided by (used in) financing activities


16,344



2,691



(2,078
)Effect of exchange rates on cash


(51
)


(17
)


80Net increase (decrease) in cash and cash equivalents


69,671



(2,633
)


3,856Net (increase) decrease in cash and cash equivalents from
    discontinued operations


(388
)


508



(1,604
)Cash and cash equivalents at beginning of year


9,288



11,413



9,161Cash and cash equivalents at end of year

$
78,571


$
9,288


$
11,413SUPPLEMENTAL CASH FLOW INFORMATION:Interest paid

$



$
47


$
Income tax payments

$
333


$
286


$
305Tax benefit from exercise of stock options

$
10,248


$



$
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:Property acquisitions

$
598


$
1,126


$
   See accompanying Notes to Consolidated Financial
    Statements.
 F-6




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes
    to Consolidated Financial Statements
  1.
    Nature of
    Operations and Summary of Significant Accounting
    Policies  Nature of Operations
  Principles of Consolidation
  ®
       F-7




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting for Impairment or
    Disposal of Long-Lived Assets
  Cash and Cash Equivalents
  Short-term Investments Accounting for
    Certain Investments in Debt and Equity Securities , other-than-temporary other-than-temporary
  Inventories first-in,
  2007


2006(Amounts in thousands)Raw Materials

$
6,534


$
7,784Work in Process


2,056



2,024Finished Goods


4,538



3,803Total

$
13,128


$
13,611   Long-Lived Assets Accounting for Impairment
    or Disposal of Long-Lived Assets
  Property
 F-8




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006(Amounts in thousands)Equipment

$
9,215


$
8,025Furniture and fixtures


2,129



1,853Accumulated depreciation and amortization


(8,026
)


(7,035
)Total

$
3,318


$
2,843   Goodwill Goodwill
    and Other Intangible Assets
    Revenue Recognition
    month-to-month
    I-Flows
 F-9




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Sales to Unaffiliated Customers:

2007


2006


2005(Amounts in thousands)United States

$
100,790


$
78,136


$
59,214Europe


12,371



12,840



10,497Asia/Pacific Rim


2,085



1,362



1,328Other


1,228



1,244



1,080Total

$
116,474


$
93,582


$
72,119   Accounts Receivable
  Product Warranties
  Income Taxes Accounting for Income Taxes Accounting for Uncertainty
    in Income Taxes
  Accounting for Stock-Based
    Compensation SFAS No. 123-revised Share-Based Payment Accounting
    for Stock-Based Compensation Accounting for Stock Issued to Employees Share-Based
    Payment
 F-10




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2007


2006


2005(Amounts in thousands)Continuing operations:Selling and marketing

$
2,446


$
2,373


$
1,924General and administrative


4,069



2,794



5,554Subtotal


6,515



5,167



7,478Discontinued operations:Selling and marketing


116



254



266General and administrative


630



141



819Subtotal


746



395



1,085Total

$
7,261


$
5,562


$
8,563   Accounting for Stock
    Appreciation Rights and Other Variable Stock Option or Award
    Plans,
    Year Ended December 31,2007

2006

2005Expected life (in years)

5.0

5.0

5.0Risk-free interest rate

3.49%  5.03%

4.53%  5.07%

3.70%  4.39%Volatility

51%  54%

55%  57%

58%  89%Dividend yield

0.00%

0.00%

0.00%    F-11




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  stock-based
    No. FAS 123R-3, Transition Election Related to Accounting for Tax Effects of
    Share-Based Payment Awards
   F-12




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock
    Options
    Weighted-AverageWeighted-


RemainingAverage


Contractual


AggregateNumber


Exercise Price


Term


Intrinsicof Shares


per Share


(In years)


Value(Amounts in thousands, except per share and in year
    amounts)Options outstanding at December 31, 2004


3,348


$
6.52Options granted


1,057


$
16.87Options exercised


(460
)

$
2.85Options forfeited or expired


(117
)

$
11.60Options outstanding at December 31, 2005


3,828


$
9.66Options granted


242


$
13.56Options exercised


(607
)

$
4.33Options forfeited or expired


(169
)

$
14.78Options outstanding at December 31, 2006


3,294


$
10.66Options granted


160


$
15.82Options exercised


(733
)

$
9.49Options forfeited or expired


(208
)

$
15.34Options outstanding at December 31, 2007


2,513


$
10.97



1.81


$
14,374Options vested and exercisable at December 31, 2007


2,268


$
10.58



1.64


$
13,945     The above table excludes equity awards granted to sales
    representatives and sales management with exercise prices below
    fair market value. Such awards have been included in the
    restricted stock units table below.   F-13




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Options Outstanding


Options ExercisableWeighted-Average








Weighted-Number


Remaining


Weighted-


Number


Averageof Shares


Contractual


Average


of Shares


ExerciseRange of Exercise Prices

Outstanding


Life in Years


Exercise Price


Exercisable


Price$ 0.00 - $ 1.28


363,282



2.34


$
1.20



363,282


$
1.20$ 1.29 - $ 2.50


129,750



0.10


$
2.41



128,857


$
2.42$ 2.51 - $ 3.37


299,132



2.00


$
3.37



299,132


$
3.37$ 3.38 - $13.54


146,755



1.49


$
10.90



112,800


$
10.78$13.55


628,329



1.01


$
13.55



628,329


$
13.55$13.56 - $15.33


252,176



2.81


$
14.29



109,816


$
14.23$15.34 - $17.57


98,000



3.43


$
16.25



45,000


$
16.44$17.58


575,500



1.94


$
17.58



575,500


$
17.58$17.59 - $19.37


19,000



4.14


$
18.60



4,000


$
18.32$19.38 - $19.81


1,000



1.91


$
19.81



1,000


$
19.81Total


2,512,924



1.81


$
10.97



2,267,716


$
10.58       out-of-the-money
    out-of-the-money.
 F-14




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  out-of-the-money
    Year EndedDecember 31, 2005(Amounts in thousands,except per share amounts)Net loss  as reported

$
(8,405
)Add: Stock-based employee and director compensation included in
    net income (loss), net of tax


8,549Deduct: Total stock-based employee and director compensation
    expense determined under fair value based method for all awards,
    net of tax


(15,308
)Net loss  pro forma

$
(15,164
)Basic and diluted earnings (loss) per share  as
    reported

$
(0.38
)Basic and diluted loss per share  pro forma

$
(0.68
)  F-15




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Restricted
    Stock and Restricted Stock Units
  i.e.
  Restricted Stock


Restricted Stock UnitsWeighted-





Weighted-Average Grant





Average GrantNumber of


Date Fair Value


Number of


Date Fair ValueShares


per Share


Shares


per Share(Amounts in thousands, except per share amounts)Nonvested shares outstanding at December 31, 2004





$




292


$
13.85Shares issued










257



15.58Shares vested or released










(69
)


13.58Shares forfeited










(154
)


14.96Nonvested shares outstanding at December 31, 2005










326



14.74Shares issued


522



13.89



449



13.69Shares vested or released










(109
)


14.98Shares forfeited










(118
)


14.20Nonvested shares outstanding at December 31, 2006


522



13.89



548



13.95Shares issued


141



16.43



477



16.35Shares vested or released


(102
)


14.04



(273
)


14.14Shares forfeited










(157
)


14.80Nonvested shares outstanding at December 31, 2007


561


$
14.50



595


$
15.56     Earnings Per Share Earnings Per Share
     F-16




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Year Ended December 31,2007


2006


2005(Amounts in thousands,except per share amounts)Numerator:Income (loss) from continuing operations, net of tax

$
(8,993
)

$
10,630


$
(12,989
)Income from discontinued operations, net of tax


4,825



3,044



4,584Gain on sale of discontinued operations, net of tax


45,396







Net income (loss)

$
41,228


$
13,674


$
(8,405
)Denominators:Denominator for basic earnings per share:Weighted-average number of common shares outstanding


23,889



22,887



22,397Effect of dilutive securities:Stock options, nonvested restricted stock and nonvested
    restricted stock units






1,184



Denominator for diluted net income per share:Weighted-average number of common and common equivalent shares
    outstanding


23,889



24,071



22,397Basic earnings per share:Income (loss) from continuing operations

$
(0.37
)

$
0.47


$
(0.58
)Income from discontinued operations


0.20



0.13



0.20Gain on sale of discontinued operations


1.90







Net income (loss)

$
1.73


$
0.60


$
(0.38
)Diluted earnings per share:Income (loss) from continuing operations

$
(0.37
)

$
0.44


$
(0.58
)Income from discontinued operations


0.20



0.13



0.20Gain on sale of discontinued operations


1.90







Net income (loss)

$
1.73


$
0.57


$
(0.38
)     Comprehensive Income  Reporting Comprehensive Income
  Use of Estimates 
 F-17




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Foreign Currency 
  New Accounting Pronouncements 
  Fair Value Measurements ,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Business Combinations Business
    Combinations
  2.
    Goodwill
    and Other Intangible Assets  Goodwill and Other Intangible
    Assets
 F-18




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
      As of December 31, 2007Carrying


AccumulatedAmount


Amortization


Net(Amounts in thousands)Patents

$
3,335


($
1,471
)

$
1,864Licensing Rights


1,102



(380
)


722Total

$
4,666


($
1,916
)

$
2,586   As of December 31, 2006Carrying


AccumulatedAmount


Amortization


Net(Amounts in thousands)Patents

$
3,286


($
1,348
)

$
1,938Licensing Rights


1,101



(285
)


816Total

$
4,387


($
1,633
)

$
2,754      F-19




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Investments    December 31, 2007GrossAmortized


UnrealizedCost


Gains (Losses)


Fair Value(Amounts in thousands)Money market funds

$
31,777


$



$
31,777Certificates of deposits


2,400







2,400Corporate debentures and bonds


10,088



3



10,091Commercial paper


42,192



(1
)


42,191Common stock(1)


10,533







10,533Total

$
96,990


$
2


$
96,992     (1)
    
    Represents investment in HAPC common stock. An
    other-than-temporary impairment of approximately
    $6.1 million was recognized as of December 31, 2007 to
    recognize the investment at the estimated fair value. No
    other-than-temporary
    impairments were recorded as of December 31, 2007.  Amounts in thousandsReported as:Cash equivalents

$
72,080Short-term investments


24,912Total

$
96,992   December 31, 2006GrossAmortized


UnrealizedCost


Losses


Fair Value(Amounts in thousands)Money market funds

$
2,478


$



$
2,478U.S. agency discount notes


2,100







2,100U.S. agency  non-callable


1,998







1,998Corporate debentures and bonds


11,955



(5
)


11,950Commercial paper


2,783







2,783Common stock










Total

$
21,314


$
(5
)

$
21,309   Reported as:Cash equivalents

$
3,175Short-term investments


18,134Total

$
21,309  F-20




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (Amounts in thousands)Maturities of one year or less:Notes and bonds

$
54,682Original maturities of three months or less:Money market funds


31,777Total

$
86,459     4.
    Discontinued
    Operations         F-21




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (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     Year Ended December 31,2007(1)(2)


2006(2)


2005(Amounts in thousands)Operating revenues

$
25,001


$
31,716


$
28,525Operating income

$
7,764


$
7,007


$
7,445Income taxes


2,939



3,963



2,861Income from discontinued operations

$
4,825


$
3,044


$
4,584     (1)
    
    Includes financial results for InfuSystem for the period
    January 1, 2007 through October 25, 2007, which was
    the date the sale of InfuSystem was consummated.(2)
    
    InfuSystem recorded approximately $2,090,000 of divestiture
    expenses during the year ended December 31, 2006. In
    October 2007, at the closing of the sale of InfuSystem, the
    Company received reimbursement of approximately $946,000 by HAPC
    of certain divestiture expenses incurred in 2006 and 2007 by the
    Company directly resulting from the sale transaction, including
    legal, audit and other professional fees. Since the
    reimbursement of $946,000 included payments for services
    incurred for 2006, divestiture expenses recorded during the year
    ended December 31, 2007 resulted in a net credit of
    approximately $245,000. F-22




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
     (Amounts in thousands)Cash

$
1,956Accounts receivable, less allowance for doubtful accounts of
    $1,668


9,630Inventories


252Prepaid expenses and other current assets


139Total current assets

$
11,977Property, net

$
13,142Goodwill


2,174Total noncurrent assets

$
15,316Accounts payable

$
1,884Accrued payroll and related expenses


1,056Accrued use taxes payable


1,392Income taxes payable


23Deferred taxes(1)


3,267Other liabilities


4Total current liabilities

$
7,626     (1)
    
    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).  5.
    Lines of
    Credit      6.
    Stockholders
    Equity  Preferred Stock 
 F-23




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (1/100)
  Stockholder Rights Plan 
  Common Stock 
     F-24




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Stock Options and Warrants 
     F-25




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
            No. 96-18.
 F-26




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
      7.
    Income
    Taxes  ,
  and/or
    Years Ended December 31,2007


2006


2005(Amounts in thousands)Current:Federal

$
(8,118
)

$



$
(1,477
)Foreign


171



48



87State


(3,267
)


58



162Subtotal


(11,214
)


106



(1,228
)Deferred:Federal


5,035



(13,274
)


(920
)State


3,679



(4,393
)


(186
)Subtotal


8,714



(17,667
)


(1,106
)Total income tax (benefit) provision

$
(2,500
)

$
(17,561
)

$
(2,334
)    F-27




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Years Ended December 31,2007


2006


2005Tax at federal statutory rate


(35.0
)%


(35.0
)%


(35.0
)%State income taxes, net of federal benefit


4.6
%


(40.7
)%


(3.5
)%Foreign operations


0.2
%


0.7
%


0.6
%Valuation allowance


1.6
%


(167.5
)%


20.0
%Nondeductible charges


5.4
%


2.6
%


1.3
%Effect of change in tax rate






(8.9
)%


162(m) limitation


0.4
%






Credits


(0.6
)%


(5.2
)%


(0.3
)%Other


1.6
%


0.6
%


1.7
%Total


(21.8
)%


(253.4
)%


(15.2
)%     December 31,


December 31,2007


2006(Amounts in thousands)Net operating losses

$



$
6,547Amortization of goodwill and other intangibles


1,183



1,540Reserves not currently deductible


10,146



9,374Asset impairment


2,439



Credits






2,694Total deferred tax assets


13,768



20,155Valuation allowance


(1,557
)


(686
)Total net deferred income taxes


12,211



19,469State taxes


(622
)


(1,552
)Deferred income


(1,248
)


Depreciation


(338
)


(251
)Total deferred tax liabilities


(2,208
)


(1,803
)Net deferred income taxes

$
10,003


$
17,666      F-28




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
            (Amounts in thousands)Unrecognized tax benefits balance at December 31, 2006

$
2,042Gross increases for tax positions of prior years


317Gross increases for tax positions of current year


2,839Gross decrease for tax positions related to discontinued
    operations(1)


(3,713
)Unrecognized tax benefits balance at December 31, 2007

$
1,485     (1)
    
    Pursuant to the sale of InfuSystem on October 25, 2007, the
    Company recorded a liability in accordance with FASB
    Interpretation No. 45, Guarantors Accounting and
    Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness of Others,in the amount of
    $3.7 million, which represents the estimated fair value of
    its indemnification to HAPC for all tax exposures arising prior
    to the closing of the sale of InfuSystem and is recorded net of
    a federal tax benefit in the amount of $2.7 million.     F-29




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##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
      8.
    Commitments
    and Contingencies      (Amounts in thousands)Year Ended December 31,2008

$
9702009


7822010


496Total

$
2,248     Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others
   F-30




---



##### Table of Contents



I-FLOW
    CORPORATION
  Notes to
    Consolidated Financial
    Statements  (Continued)
        9.
    Employee
    Benefit Plan    10.
    Related
    Party Transactions  10-year
  11.
    Subsequent
    Events   F-31




---



##### Table of Contents



SIGNATURES
       By:
    /s/  Donald
    M. Earhart       Signature

Title/s/  Donald
    M. EarhartDonald
    M. Earhart

Chairman, President and Chief
    Executive Officer (Principal
    Executive Officer)/s/  James
    J. Dal PortoJames
    J. Dal Porto

Executive Vice President, Chief
    Operating Officer, Director and
    Secretary/s/  James
    R. TalevichJames
    R. Talevich

Chief Financial Officer and
    Treasurer (Principal Financial and
    Accounting Officer)/s/  John
    H. AbelesJohn
    H. Abeles, M.D.

Director/s/  Jack
    H. HalperinJack
    H. Halperin

Director/s/  Joel
    S. KanterJoel
    S. Kanter

Director/s/  Erik
    H. LoudonErik
    H. Loudon

Director/s/  Henry
    Tsutomu TaiHenry
    Tsutomu Tai, Ph.D., M.D.

Director  F-32




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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)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)(27)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.(29)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.(31)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.(33)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.(34)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.(35)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.(36)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(36)2
.14

Form of Share Purchase Agreement(36)2
.15

Second Form of Share Purchase Agreement(36)2
.16

Form of Irrevocable Proxy(36)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.(38)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(39)3
.1

Amended and Restated Certificate of Incorporation of I-Flow
    Corporation, a Delaware Corporation(6)




---



##### Table of Contents



Exhibit No.

Exhibit3
.2

Amended and Restated Bylaws of I-Flow Corporation(37)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

Summary of the terms of the COIP for 2006(25)*10
.11

Summary of the terms of the COIP for 2007(27)*10
.12

Summary of the terms of the 2008 Executive Performance Incentive
    Plan(40)*10
.13

Addendum to manufacturing plant lease agreement(23)10
.14

Lease Agreement between Industrial Developments International,
    Inc. as Landlord and I-Flow Corporation as Tenant dated
    April 14, 1997(17)10
.15

Block Medical de Mexico lease agreement dated December 7,
    1999(22)10
.16

Amended and Restated Loan and Security Agreement between Silicon
    Valley Bank and I-Flow Corporation dated May 8, 2003(10)10
.17

Amendment to Loan Agreement between Silicon Valley Bank and
    I-Flow Corporation dated January 30, 2004(22)10
.18

Amendment to Loan Agreement, dated as of April 30, 2005,
    between I-Flow Corporation and Silicon Valley Bank(24)10
.19

Amendment to Loan Agreement, dated as of April 29, 2006,
    between I-Flow Corporation and Silicon Valley Bank(26)10
.20

Amendment to Loan Agreement between Silicon Valley Bank and
    I-Flow Corporation, dated as of July 16, 2007(32)10
.21

Loan Agreement, dated March 31, 2000, by and among
    InfuSystem, Inc., I-Flow Corporation and Old Kent Bank(10)10
.22

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)




---



##### Table of Contents



Exhibit No.

Exhibit10
.23

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
.24

Second Amended and Restated Promissory Note, dated April 1,
    2004, between InfuSystem, Inc. and Fifth Third Bank (formerly
    Old Kent Bank)(10)10
.25

Promissory Note with Donald M. Earhart dated June 15,
    2001(8)*10
.26

Underwriting Agreement, dated April 13, 2004(21)10
.27

Employment Agreement with Donald M. Earhart, dated May 16,
    1990(18)*10
.28

Amendment No. 1 to Employment Agreement with Donald M.
    Earhart, dated June 21, 2001(8)*10
.29

Amendment No. 2 to Employment Agreement with Donald M.
    Earhart, dated February 23, 2006(25)*10
.30

Amendment No. 3 to Employment Agreement with Donald M.
    Earhart, dated February 21, 2008(40)*10
.31

Amended and Restated Employment Agreement with James J. Dal
    Porto, dated June 21, 2001(8)*10
.32

Amendment No. 1 to Employment Agreement with James J. Dal
    Porto, dated February 23, 2006(25)*10
.33

Amendment No. 2 to Employment Agreement with James J. Dal
    Porto, dated February 21, 2008(40)*10
.34

Employment Agreement with James R. Talevich, dated June 30,
    2000(19)*10
.35

Amended and Restated Employment Agreement for James R. Talevich,
    dated May 24, 2007(30)*10
.36

Amendment No. 1 to Employment Agreement with James R.
    Talevich, dated February 23, 2006(25)*10
.37

Amendment No. 2 to Employment Agreement with James R.
    Talevich, dated February 21, 2008(40)*10
.38

Agreement Re: Change in Control with Donald M. Earhart, dated
    June 21, 2001(8)*10
.39

Amendment No. 1 to Agreement Re: Change in Control with
    Donald M. Earhart, dated February 23, 2006(25)*10
.40

Amendment No. 2 to Agreement Re: Change in Control with
    Donald M. Earhart, dated February 21, 2008(40)*10
.41

Agreement Re: Change in Control with James J. Dal Porto dated
    June 21, 2001(8)*10
.42

Amendment No. 1 to Agreement Re: Change in Control with
    James J. Dal Porto, dated February 23, 2006(25)*10
.43

Amendment No. 2 to Agreement Re: Change in Control with
    James J. Dal Porto, dated February 21, 2008(40)*10
.44

Agreement Re: Change in Control with James R. Talevich, dated
    June 21, 2001(8)*10
.45

Amendment No. 1 to Agreement Re: Change in Control with
    James R. Talevich, dated February 23, 2006(25)*10
.46

Amendment No. 2 to Agreement Re: Change in Control with
    James R. Talevich, dated February 21, 2008(40)*10
.47

Form of Restricted Stock Agreement(25)*10
.48

Form of Indemnification Agreement(25)21
.1

List of Subsidiaries23
.1

Consent of Independent Registered Public Accounting Firm31
.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




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##### Table of Contents



*
    
    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 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.




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##### Table of Contents



(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.(25)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on March 1, 2006.(26)
    
    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, 2006.(27)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on October 4, 2006.(28)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on February 28, 2007.(29)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on May 1, 2007.(30)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on May 29, 2007.(31)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on July 2, 2007.(32)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on July 19, 2007.(33)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on July 31, 2007.(34)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on September 13, 2007.(35)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on September 19, 2007.(36)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on October 19, 2007.(37)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on December 11, 2007.(38)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on December 17, 2007.(39)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on February 6, 2008.(40)
    
    Incorporated by reference to exhibit with this title filed with
    the Companys Current Report on
    Form 8-K
    filed on February 26, 2008.