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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  (Mark one)þ

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

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For
    the transition period
    from          to          .   Commission file number
    000-51348
      ev3 Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

32-0138874(I.R.S. Employer
    Identification No.)9600 54th Avenue North, Suite 100
    Plymouth, Minnesota(Address of principal
    executive offices)

55442(Zip Code)  (763) 398-7000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to section 12(b) of the
    Act:
  Title of Each Class:

Name of Each Exchange on Which Registered:Common Stock, par value $0.01 per share

The NASDAQ Stock 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 þNon-accelerated filer (Do not check if a smaller reporting
    company) o

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




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##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


1Item 1A.


Risk Factors


31Item 1B.


Unresolved Staff Comments


55Item 2.


Properties


55Item 3.


Legal Proceedings


56Item 4.


Submission of Matters to a Vote of Security
    Holders


56Item 4A.


Executive Officers of the Registrant


57PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


59Item 6.


Selected Financial Data


62Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


63Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


85Item 8.


Financial Statements and Supplementary Data


87Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


88Item 9A.


Controls and Procedures


88Item 9B.


Other Information


89PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


89Item 11.


Executive Compensation


89Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


90Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


91Item 14.


Principal Accounting Fees and Services


91PART IVItem 15.


Exhibits, Financial Statement Schedules


91Change in Control and Severance AgreementExecutive Performance Incentive PlanConsent and Second Amendment to Loan and Security AgreementThird Amendment to Loan and Security AgreementAssumption Agreement and Fourth Agreement to Loan and Security AgreementSubsidiariesConsent of Ernst & Young LLPConsent of PricewaterhouseCoopers LLP302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of Chief Executive Officer906 Certification of Chief Financial Officer      This annual report on
    Form 10-K
    contains and incorporates by reference not only historical
    information, but also forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Securities Exchange Act of
    1934, as amended, which are subject to the safe harbor created
    by those sections. We refer you to the information under the
    heading Part I. Item 1. Business 
    Forward-Looking Statements.
  As used in this report, references to ev3, the
    company, we, our or
    us, unless the context otherwise requires, refer to
    ev3 Inc. and its subsidiaries.
  We own or have rights to various trademarks, trade names or
    service marks, including the following:
    ev3 ® ,
    PROTEGE ® ,
    EVERFLEX tm ,
    PARAMOUNT tm MINI,
    PRIMUS tm ,
    SPIDERX ® ,
    SPIDERFX ® ,
    X-SIZER ® ,
    HELIX tm ,
    THE CLOT
    BUSTER ® ,
    GOOSE
    NECK ® ,
    VISI-PRO tm ,
    NITREX ® ,
    NEXUS tm ,
    ONYX ® ,
    MORPHEUS tm ,
    SOLO tm ,
    ECHELON tm ,
    ULTRAFLOW tm ,
    MARATHON tm ,
    HYPERFORM tm ,
    HYPERGLIDE tm ,
    MIRAGE tm ,
    AXIUM tm ,
    SOLITAIRE tm ,
    SILVERSPEED ® ,
    X-PEDIUM tm ,
    X-CELERATOR tm ,
    FOXHOLLOW ® ,
    SILVERHAWK ® ,
    RINSPIRATOR ® ,
    NIGHTHAWK tm ,
    and
    ROCKHAWK tm .
    The trademarks
    PLETAL ® ,
    PLAVIX ® ,
    SAILOR tm Plus,
    SUBMARINE ® Plus, ADMIRAL
    XTREME tm ,
    AMPHIRION ® ,
    the
    DIVER ® CE, and
    ACCULINK ® referred to in this annual report on
    Form 10-K
    are the registered trademarks of others.
 i




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PART I  ITEM 1.
    BUSINESS  Company
    Overview
        
    targeting under-innovated and emerging markets;
    leveraging our products across major endovascular
    sub-markets;
    investing in clinical research to demonstrate the benefits of
    our products;
    expanding our business through product innovation and strategic
    acquisitions;
    driving our global organization and presence; and
    leading our business by an experienced management team.       1




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For the Year Ended





For the Year EndedDecember 31,


Percent


December 31,


PercentNet Sales by Segment

2007


2006


Change


2006


2005


ChangePeripheral vascular

$
173,775


$
121,104



43.5
%

$
121,104


$
79,881



51.6
%Neurovascular


104,451



81,334



28.4
%


81,334



53,815



51.1
%Research collaboration


5,957







100.0
%










NMTotal

$
284,183


$
202,438



40.4
%

$
202,438


$
133,696



51.4
%   For the Year Ended





For the Year EndedDecember 31,


Percent


December 31,


PercentNet Sales by Geography

2007


2006


Change


2006


2005


ChangeUnited States

$
177,198


$
121,180



46.2
%

$
121,180


$
71,848



68.7
%International


106,985



81,258



31.7
%


81,258



61,848



31.4
%Total

$
284,183


$
202,438



40.4
%

$
202,438


$
133,696



51.4
%     The
    Endovascular Market
      
    the use of local or regional anesthesia frequently instead of
    general anesthesia;
    reduced patient discomfort and shorter recovery times;
    the reduced need for blood products and transfusions;
    shorter hospital stays for recovery;
    lower risks of patient complications related to
    procedures; and
    potentially lower costs. 2




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
    Peripheral vascularmarket includes products used to
    treat arterial and venous disease in the legs, pelvis, neck,
    kidney and any other vascular anatomy other than that in the
    brain or the heart. According to the American Heart Association,
    or AHA, more than eight million people in the United States have
    peripheral arterial disease. We estimate that more than
    100 million people worldwide are affected by peripheral
    arterial disease.
    Neurovascularmarket includes products used to treat
    vascular disease and disorders in the brain, including
    arterio-venous malformations, or AVMs, and strokes caused by
    either vascular occlusion (ischemic) or rupture (hemorrhagic).
    The World Health Organization, or WHO, estimates that there are
    approximately 15 million cases of stroke worldwide each
    year. Of these, the WHO estimates that five million people die
    from the stroke and an additional five million are left with a
    permanent disability.
    Cardiovascularmarket includes products used to treat
    coronary artery disease, atrial fibrillation and other disorders
    in the heart and adjacent vessels. The AHA estimates that
    81 million people in the United States have cardiovascular
    disease. We estimate that more than 850 million people
    worldwide are affected by cardiovascular disease.  Our
    Peripheral Vascular Markets
    Peripheral
    Vascular Disease
    build-up
    and/or
 3




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build-up
  Endovascular Today
      Peripheral
    Vascular Market
  Journal of American Geriatric Society Cardiology Review
   4




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
    Increased Awareness.  Recent emphasis on
    peripheral vascular disease education from medical associations,
    insurance companies and online medical communities, as well as
    publication in medical journals, is increasing public and
    physician awareness of peripheral vascular disease risk factors,
    symptoms and treatment options. The Legs for Life
    campaign screens more than 40,000 people for peripheral
    vascular disease each year, of which nearly 29% are at moderate
    to high risk of lower extremity peripheral vascular disease. The
    American Diabetes Association, or ADA, recommends that all
    diabetics over the age of 50 be screened for peripheral vascular
    disease.
    Evolving Physician Practice Patterns.  Given
    that many patients with coronary artery disease also have
    peripheral vascular disease, we believe that interventional
    cardiologists and vascular surgeons are increasingly screening
    patients for both diseases. As a consequence, we believe that
    physicians are diagnosing more cases of peripheral vascular
    disease. In addition, heightened awareness of peripheral
    vascular disease, its symptoms and treatment options is leading
    to increased referrals from general practitioners, podiatrists
    who treat patients with pain and lesions in the feet that may be
    caused by peripheral vascular disease, and nephrologists,
    diabetologists and endocrinologists, who treat diabetics often
    experiencing complications resulting from peripheral vascular
    disease.
    Increased Peripheral Vascular Disease
    Screening.  Studies and medical articles have
    advocated increased peripheral vascular disease screening by
    primary care physicians using an ankle-brachial index, or ABI, a
    simple technique that compares blood pressure in a
    patients foot to blood pressure in the patients arm
    to determine how well blood is flowing to the foot. In addition
    to the ABI, physicians are increasingly using established
    techniques, such as angiography and ultrasound, to either
    diagnose or confirm diagnosis of peripheral vascular disease.  Peripheral
    Vascular Disease Treatment Options
  and/or
  Non-Invasive Management. and/or
  Minimally Invasive Endovascular
    Procedures.
 5




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
    Stents, angioplasty and atherectomy combined with embolic
    protection systems, which protect against plaque and debris from
    traveling downstream, blocking off the vessel and disrupting
    blood flow;
    laser therapy, which uses a laser to reduce plaque to relatively
    small particles;
    drug-eluting stents, where a stent is coated with a
    slow-to-moderate
    release drug formulation intended to reduce restenosis;
    drug-coated balloons, where an angioplasty balloon is coated
    with a drug formulation intended to reduce restenosis; and
    vascular cryotherapy, where an angioplasty balloon is inflated
    with nitrous oxide in an attempt to reduce inflammation caused
    by treatment of the lesion.    Surgical Procedures.
        Our
    Peripheral Vascular Product Portfolio
   6




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Stents
    Protégé EverFlex, Protégé GPS and
    Protégé GPS BIGGS.
  
    Spiral cell interconnections that greatly enhance flexibility;
    New wave peak structure that more efficiently distributes stress
    and resists compression; and
    Longer lengths (up to 200 mm and all 6 French compatible), which
    minimize the need for overlapping stents when treating long
    lesions.    ParaMount Mini, PRIMUS and Visi-Pro Balloon Expandable
    Stents.
 7




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Embolic
    Protection Products
    SpiderFX and SpiderRX Embolic Protection
    Devices.
  and/or
  Carotid
    Stenting Solutions
     8




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Atherectomy
    Products
    SilverHawk Plaque Excision System.
    
    Safety.  The SilverHawk is designed not to
    stretch or damage the artery walls, which can lead to dissection
    or perforation of the artery. We believe that the safety of the
    SilverHawk, measured by low rates of perforation and dissection,
    is supported by results from the treatment of 1,517 lesions in
    728 patients recorded in our TALON registry. In data
    published in the Journal of Endovascular Therapyin 2006,
    less than 5% and 1% of these lesions treated post-SilverHawk had
    dissections and perforations, respectively. The SilverHawk
    procedure is minimally-invasive and typically performed under
    local anesthesia. Therefore, it does not have many of the risks
    associated with more invasive surgeries and general anesthesia.
    To date, we have not conducted studies designed to directly
    compare the safety of the SilverHawk against alternative
    procedures, such as angioplasty, stenting or bypass grafting.
    Efficacy.  Unlike most treatments for
    peripheral artery disease that leave plaque behind in the
    artery, the SilverHawk removes plaque. The SilverHawk has
    removed over 700 milligrams of plaque in a single procedure,
    with an average of approximately 100 milligrams of plaque per
    procedure. We believe that excising plaque without causing
    stretch injury to the artery wall may minimize restenosis and
    the need for reintervention. We also believe that the efficacy
    of the SilverHawk, measured by low 12 month reintervention
    rates is supported by the results of three single site studies
    as well as our TALON registry. In order to further evaluate the
    long term safety and efficacy data of the SilverHawk during
    endovascular treatment of peripheral arterial disease in
    femoropopliteal arteries, we are planning to conduct a
    prospective, multi-center, non-randomized, single-arm study to
    compare SilverHawk to performance goals of PTA in the treatment
    of atherosclerotic femoropopliteal arteries. The primary
    effectiveness endpoint is expected to be primary patency at one
    year as defined by duplex ultrasound peak velocity ratio.
    Additionally, we intend to capture primary safety of Major
    Adverse Event rate at 30 days. We expect to start this
    trial by the third quarter of 2008.
    Treats Difficult to Treat Lesions.  The
    SilverHawk enables physicians to remove plaque from long,
    bifurcated and difficult to treat lesions in a wide variety of
    locations, including arteries behind and below the knee and in
    the foot. Approximately one-third of SilverHawk procedures to
    date have been performed below the knee, an area where lesions
    have traditionally gone untreated until they require bypass
    surgery or amputation. Certain treatment locations, such as
    arteries below the knee or in the foot, are not suited for
    physicians with limited experience using the device.
    Utilizes Familiar Techniques.  The SilverHawk
    procedure employs techniques similar to those used in
    angioplasty, which are familiar to the approximately 12,000
    interventional cardiologists, vascular surgeons and
    interventional radiologists in the United States who are
    generally trained in endovascular techniques. This significantly
    increases the number of physicians who are able to perform the
    procedure compared to surgical alternatives that must be
    performed by highly-trained vascular surgeons. In addition, the
    SilverHawk was designed to be easy to use. The SilverHawk
    operates with one switch that 9




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controls all device functionality, and has a unique torque shaft
    designed for a
    one-to-one
    correlation between the handle and the tip, providing physicians
    with precise control of the position of the cutting blade. We
    continue to focus on providing further enhancements to the
    SilverHawk as part of our research and development efforts.  
    Cost and Time Efficient.  A single SilverHawk
    device can be used to treat multiple and long lesions where more
    than one stent might otherwise be required. Compared to surgical
    alternatives, the SilverHawk procedure reduces cost by allowing
    physicians to treat patients in a catheterization lab instead of
    an operating room, decreasing the length of hospitalization and
    reducing complications.
    Allows for
    Follow-Up
    Treatment Options.  Physicians can, and sometimes
    do, use adjunctive angioplasty and occasionally stenting during
    a SilverHawk procedure. When the SilverHawk procedure is
    performed without stenting, which we estimate is greater than
    90% of the time, increased future treatment options remain
    available in the event that restenosis does occur and
    reintervention is required as there is no metal left behind post
    procedure, as is the case with stenting.
    Captures and Removes Plaque.  The patient and
    the physician get immediate feedback by seeing the volume of
    plaque removed, visibly reinforcing the benefits of the
    procedure. In two on-going studies, conducted in partnership
    with Merck & Co., Inc., removed plaque is collected
    and is currently being researched to identify markers of
    atherosclerotic disease.          Future Products.
  Thrombectomy
    Products
   10




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Rinspirator Thrombus Removal System.
      X-Sizer Thrombectomy Catheter System.
  Helix Clot Buster Thrombectomy Device.
  Diver C.E. Clot Extraction Aspiration
    Catheter.
  Procedural
    Support Products
    Goose Neck Snares and Microsnares.
 11




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Nitrex Guidewires.
  Balloon Angioplasty Catheters.
  Our
    Neurovascular Markets
      The Lancet
 12




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Our
    Neurovascular Product Portfolio
    Embolic
    Coils
    Axium Detachable Coil System.
  
    a high degree of coil conformability, which facilitates the
    physicians goal of more easily and completely filling and
    packing the aneurysm, regardless of its shape and size;
    coil softness combined with stretch resistance, which allows the
    coil to be positioned or re-positioned within the aneurysm
    without adding to the risk of bleeding or hemorrhagic stroke;
    ease of coil placement though the microcatheter, providing the
    physician with enhanced control and deliverability; and 13




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
    rapid, safe and simple detachment of the coil through a
    proprietary, micro-machined instant detachment system that
    offers instantaneous coil detachment without the use of wires or
    syringes, which facilitates precise and rapid coil deployment
    while minimizing procedure time, which may be especially
    important in a ruptured aneurysm or when blood flow to the brain
    has been restricted.  Nexus Embolic Coils.
  NXT.
  Liquid
    Embolics
    Onyx Liquid Embolic System.
    Micro
    Catheters
  difficult-to-reach
 14




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Echelon and Pre-shaped Echelon Micro
    Catheters. over-the-wire
  UltraFlow and Marathon Flow Directed Micro
    Catheters.
  Other Micro Catheters. over-the-wire
  Occlusion
    Balloon Systems
  HyperForm and HyperGlide Occlusion Balloon
    Systems.
  Guidewires
  Hydrophilic Guidewires. over-the-wire
  Neuro
    Stents
    Sales,
    Marketing and Distribution
  Structure
    and Strategy
   15




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United
    States
          Europe
    and Canada
   16




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Other
    International
    Other
    Distribution Arrangements
        Manufacturing
   17




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Research
    and Development
      
    broadening acquired technologies in order to address a larger
    share of the target markets;
    incorporating important features which we believe appeal to the
    physicians who use our products; and
    leveraging core technologies to develop new product platforms
    and enter new markets.    Clinical
    Studies
    and/or
  and/or
 18




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Carotid
    Clinical Trials:
  Trial

Product

Study Design

StatusCREATE Carotid Pivotal Trial (U.S.)

Protégé GPS Stent with an ev3 Embolic Protection Device

Prospective, multi-center single-arm non-inferiority study

Enrollment and follow-up completedPrimary endpoint of major adverse cardiovascular and cerebral
    event rate

Met primary endpointCREATE Carotid Pivotal-SpideRX Arm (U.S.)

SpideRX Embolic Protection Device, with commercially available
    Guidant RX ACCULINK Stent

Prospective, multi-center single-arm study, added to CREATE
    Pivotal study, to confirm safety and effectiveness

Enrollment and follow-up completedPrimary endpoint of 30-day major adverse cardiovascular cerebral
    event

Met primary endpointCREATE PAS (U.S)

Protégé GPS Stent with an ev3 Embolic Protection Device

Prospective, multi-center single-arm confirmatory post-approval
    study

Enrollment initiated in second quarter 2007Primary endpoint of major adverse cardiovascular and cerebral
    event rate in broad use at investigative centers   Embolic
    Protection Clinical Trials:
  Trial

Product

Study Design

StatusSIMPLE Cardio (Europe)

Spider Embolic Protection Device

Prospective, multi-center, single-arm trial to evaluate safety
    and performance of device when used in patients undergoing
    saphenous vein graft procedures with percutaneous transcatheter
    angioplasty catheters

Enrollment and follow-up completed 
    Results established a 30-day major adverse cardiovascular event
    rate of 4%Primary endpoint of major adverse cardiovascular event within
    30 days post-procedureSPIDER SVG Trial Cardio (U.S. and Canada)

SPIDER and SpideRX Embolic Protection Device

Prospective, multi-center, randomized, non-inferiority trial
    comparing SPIDER and SpideRX to commercially available embolic
    protection devices during percutaneous saphenous vein graft
    procedures

Enrollment and follow-up completed 
    Met primary endpointPrimary endpoint of major adverse cardiovascular event within
    30 days post-procedure 19




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Trial

Product

Study Design

StatusRockHawk SpiderFX Trial (U.S.)

SilverHawk Peripheral Calcium Tip Plaque Excision System with
    SpiderFX Embolic Protection Device

Prospective, multi-center, non-randomized, single-arm study to
    evaluate the safety and effectiveness of the SilverHawk with
    Calcium Tip (i.e. RockHawk) Plaque Excision System when used in
    conjunction with the SpiderFX Embolic Protection Device in the
    treatment of moderate to heavily calcified lesions in the
    femoropopliteal arteries

Enrollment anticipated to begin second quarter 2008   Peripheral
    Stent Clinical Trials:
  Trial

Product

Study Design

StatusPROVE-IT (U.S.)

EverFlex stent, Protégé GPS stent, and Visi-Pro stent

Prospective, multi-center, non-randomized, 2-arm study to
    evaluate the safety and effectiveness of primary stenting
    compared to PTA performance goals for the treatment of iliac
    lesions

Enrollment anticipated to begin fourth quarter 2008Primary safety endpoint of 30-day major adverse event
    (self-expanding stent arm)Primary effectiveness endpoint of 9-month patency by duplex
    (self-expanding stent arm)Primary composite endpoint of acute procedure success and 30-day
    major adverse event (balloon expandable stent arm)DURABILITY I (Europe)

EverFlex Stent

Prospective, multi-center, non-randomized study to evaluate the
    long-term
    (12-month)
    patency of the EverFlex stent in SFA lesions

Enrollment complete; follow-up continuingDURABILITY II (U.S.)

EverFlex Stent

Prospective, multi-center, non-randomized study to evaluate the
    safety and effectiveness of the primary stenting compared to PTA
    performance goals for the treatment of SFA lesions

Enrollment and follow-up continuingPrimary safety endpoint of 30-day major adverse eventPrimary effectiveness endpoint of 12-month patency by duplex 20




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Trial

Product

Study Design

StatusPROSPERO (Europe)

EverFlex Stent

Prospective, multi-center, observational patient registry to
    evaluate the long term (12-month) integrity and effectiveness of
    the Protégé EverFlex stent in the SFA in the real
    world practice

Enrollment complete; follow-up continuing   SilverHawk
    Clinical Trials:
  Trial

Product

Study Design

StatusRockHawk SpiderFX Trial (U.S.)

SilverHawk Peripheral Calcium Tip Plaque Excision System with
    SpiderFX Embolic Protection Device

Prospective, multi-center, non-randomized, single-arm study to
    evaluate the safety and effectiveness of the SilverHawk with
    Calcium Tip (i.e. RockHawk) Plaque Excision System when used in
    conjunction with the SpiderFX Embolic Protection Device in the
    treatment of moderate to heavily calcified lesions in the
    femoropopliteal arteries

Enrollment anticipated to begin in second to third quarter 2008SilverHawk PAS (US)

SilverHawk

Prospective, multi-center, non-randomized, single-arm study to
    evaluate the long term safety and efficacy of the SilverHawk
    Atherectomy Catheter as compared to PTA performance goals during
    endovascular treatment of peripheral artery disease in the
    femoropopliteal arteries

Enrollment anticipated to begin in third quarter 2008   Neuro
    Clinical Trials:
  Trial

Product

Study Design

StatusSolitaire Stent Flow Restoration Trial

Solitaire Stent

In developmentUS IDE, prospective, single-arm, multi-center studyFDA approval

Enrollment anticipated to begin fourth quarter 2008Axium Post Market and Expanded Approvals Trial

Axium Coil

In development 
    Prospective, single-arm, multi-center study 
    Scientific clinical data and possible regulatory submissions

Enrollment anticipated to begin second quarter 2008Onyx HD

Onyx HD Liquid Embolic

Onyx HD-500 was approved through the FDA HDE process, and thus
    requires that each U.S. physician obtain Institutional Review
    Board (IRB) approval prior to use  21




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Collaboration
    with Merck & Co., Inc.
  year-to-year
     22




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Government
    Regulation
  United
    States
    
    product design, development and manufacture;
    conduct of clinical trials;
    product safety, testing, labeling and storage;
    submission to FDA for pre-marketing clearance or approval;
    record keeping procedures;
    product marketing, sales and distribution; and
    post-marketing surveillance, reporting of deaths or serious
    injuries and medical device reporting.    510(k) Clearance Pathway.
   23




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and/or
  Pre-Market Approval Pathway.
  pre-approval
  Clinical Trials.
  and/or
   24




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De Novo Pathway.
  Humanitarian Device Exemptions.
  Post-Marketing Requirements.
  
    Quality System Regulations, which require manufacturers to
    follow design, testing, control, documentation and other quality
    assurance procedures during the manufacturing process;
    labeling, advertising and promotion regulations, which govern
    product labels and labeling, prohibit the promotion of products
    for unapproved or off-label uses and impose other
    restrictions on labeling and promotional activities;
    medical device reporting regulations, which require that
    manufacturers report to the FDA if their device may have caused
    or contributed to a death or serious injury or malfunctioned in
    a way that would likely cause or contribute to a death or
    serious injury if it were to recur; and
    notices of correction or removal, and recall regulations.     25




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
    warning letters, fines, injunctions, and civil penalties;
    repair, replacement, refund, recall or seizure of our products;
    operating restrictions, partial suspension or total shutdown of
    production;
    refusing a request for 510(k) clearance or pre-market approval
    of new products;
    withdrawing 510(k) clearance or pre-market approvals that are
    already granted; and
    criminal prosecution.  International
         26




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Fraud
    and Abuse Laws
      Privacy
    and Security
      Third
    Party Reimbursement
     27




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International
    Trade
    Environmental
    Competition
    
    continue to innovate and maintain scientifically advanced
    technology, being responsive to the changing needs of our
    diverse customer base; 28




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
    apply our technology across disease states, product lines and
    markets;
    attract and retain skilled personnel;
    obtain and maintain regulatory approvals; and
    cost-effectively manufacture and successfully market our
    products.      Employees
    Intellectual
    Property Rights
      and/or
 29




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Forward-Looking
    Statements
  Form 10-K and/or
   30




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Form 10-Q Form 8-K
  Available
    Information
  (763) 398-7000, www.ev3.net
  Form 10-K, Form 10-Q, Form 8-K, (949) 680-1375.
  ITEM 1A.
    RISK
    FACTORS    Risks
    Related to Our Business and Industry
  We
    have a history of net losses and no assurance can be provided
    that we will achieve profitability.
   31




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We
    have experienced and may continue to experience difficulties in
    integrating FoxHollows operations into ours and may not be
    unable to realize the anticipated cost savings, net sales and
    other potential benefits of our acquisition of FoxHollow in a
    timely manner or at all. As a result, our business, operating
    results and stock price may be adversely affected.
      
    executing on the strategic vision we communicated to our
    customers regarding the acquisition;
    coordinating and consolidating geographically separated
    organizations, systems and facilities;
    coordinating sales and marketing efforts to effectively
    communicate our capabilities and effectively cross-sell our
    products;
    expanding the sale of FoxHollows products into our
    international operations and distribution network;
    combining our and FoxHollows sales force territories and
    competencies associated with the sale of our products;
    maintaining key employees and employee morale;
    addressing possible differences in business backgrounds,
    corporate cultures and management philosophies;
    coordinating research and development activities to accelerate
    introduction of new products and technologies with reduced costs;
    preserving our customer, distribution, reseller, manufacturing,
    supplier, marketing and other important relationships and
    resolving any potential conflicts;
    integrating numerous operating systems, including those
    involving management information, purchasing, accounting and
    finance, sales, billing, payroll, employee benefits and
    regulatory compliance;
    reconciling inconsistent standards, controls, procedures and
    policies; and
    creating a consolidated internal control over financial
    reporting structure to enable us and our independent public
    registered accounting firm to report on the effectiveness of our
    internal control over financial reporting. 32




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Elevated
    inventory levels of our SilverHawk product at some of our
    customers adversely affected our operating results for the
    fourth quarter 2007 and are expected to continue to adversely
    affect our operating results into the second half of
    2008.
    As a
    result of the resignation of John B. Simpson, M.D. Ph.D. as
    a director of our company, Merck & Co., Inc. has the
    right to terminate the collaboration and license agreement with
    us. Any loss of revenue from our relationship with Merck as a
    result of Mercks termination of the agreement or otherwise
    could have a significant adverse affect on our operating results
    and our stock price.
    In
    order to be successful, we must retain and motivate key
    employees. Any failure to do so could adversely affect our
    business and operating results.
   33




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We may
    require additional capital in the future, which may not be
    available or may be available only on unfavorable terms. In
    addition, any equity financings may be dilutive to our
    stockholders.
    Our
    business strategy relies on assumptions about the market for our
    products, which, if incorrect, would adversely affect our
    business prospects and profitability.
    Some
    of our products are emerging technologies or have only recently
    been introduced into the market. If physicians do not recommend
    and endorse them or if our working relationships with physicians
    deteriorate, our products may not be accepted in the
    marketplace, which would adversely affect our business and
    operating results.
   34




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Demand
    for our SilverHawk product in the United States has decreased in
    recent quarters due in part to the lack of long-term clinical
    data regarding the safety and efficacy of the SilverHawk, which
    in part adversely affected our fourth quarter 2007 operating
    results. Any failure by us to generate additional demand may
    continue to adversely affect our operating results. In addition,
    future long-term data regarding the safety and efficacy of the
    SilverHawk may not be positive or consistent with data currently
    available, which would adversely affect SilverHawks market
    acceptance and our operating results.
       35




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Our
    family of self-expanding stents generates a significant portion
    of our net sales. Accordingly, if sales of these products were
    to decline, our operating results and business prospects would
    be adversely affected.
    Our
    future success depends in part on the introduction of new
    products. Accordingly, any failure to develop and market new
    products in a timely fashion that are accepted by the
    marketplace could adversely affect our business and operating
    results.
     36




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A
    number of our proposed products are in the early stages of
    development and some are in clinical trials. If the development
    of these products is not successfully completed or if these
    trials are unsuccessful, or if the U.S. Food and Drug
    Administration, or FDA, or other regulatory agencies require
    additional trials to be conducted, these products may not be
    commercialized and our business prospects may
    suffer.
      and/or
  Our
    future success depends in part on our ability to sell SilverHawk
    and our other products internationally. There are risks inherent
    in operating internationally and selling and shipping our
    products and purchasing our components internationally, which
    may adversely impact our net sales, operating results and
    financial condition.
     37




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and/or
  
    the imposition of additional U.S. and foreign governmental
    controls or regulations;
    the imposition of costly and lengthy new export licensing
    requirements;
    the imposition of
    U.S. and/or
    international sanctions against a country, company, person or
    entity with whom the company does business that would restrict
    or prohibit continued business with the sanctioned country,
    company, person or entity;
    economic instability;
    a shortage of high-quality sales people and distributors;
    loss of any key personnel that possess proprietary knowledge, or
    who are otherwise important to our success in certain
    international markets;
    changes in third-party reimbursement policies that may require
    some of the patients who receive our products to directly absorb
    medical costs or that may necessitate the reduction of the
    selling prices of our products;
    changes in duties and tariffs, license obligations and other
    non-tariff barriers to trade;
    the imposition of new trade restrictions;
    the imposition of restrictions on the activities of foreign
    agents, representatives and distributors;
    scrutiny of foreign tax authorities which could result in
    significant fines, penalties and additional taxes being imposed
    on us;
    pricing pressure that we may experience internationally;
    laws and business practices favoring local companies;
    significantly longer payment cycles;
    difficulties in maintaining consistency with our internal
    guidelines;
    difficulties in enforcing agreements and collecting receivables
    through certain foreign legal systems;
    difficulties in enforcing or defending intellectual property
    rights; and
    exposure to different legal and political standards due to our
    conducting business in over 50 countries.    Fluctuations
    in foreign currency exchange rates could result in declines in
    our reported net sales and earnings.
   38




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If
    third parties claim that we infringe upon their intellectual
    property rights, we may incur liabilities and costs and may have
    to redesign or discontinue selling the affected
    product.
        
    be expensive and time consuming to defend;
    result in us being required to pay significant damages to third
    parties;
    cause us to cease making or selling products that incorporate
    the challenged intellectual property;
    require us to redesign, reengineer or rebrand our products, if
    feasible;
    require us to enter into royalty or licensing agreements in
    order to obtain the right to use a third partys
    intellectual property, which agreements may not be available on
    terms acceptable to us or at all;
    divert the attention of our management; or
    result in our customers or potential customers deferring or
    limiting their purchase or use of the affected products until
    resolution of the litigation.   39




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We are
    currently a party to a number of intellectual property claims,
    which are costly to defend and the resolution of which could
    have a material adverse effect on our business and results of
    operations.
    If our
    patents and other intellectual property rights do not adequately
    protect our products, we may lose market share to our
    competitors, which would harm our business.
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We
    manufacture our products at single locations. Any disruption in
    these manufacturing facilities, any patent infringement claims
    with respect to our manufacturing process or otherwise any
    inability to manufacture a sufficient number of our products to
    meet demand could adversely affect our business and operating
    results.
        Our
    dependence on key suppliers puts us at risk of interruptions in
    the availability of our products, which could reduce our net
    sales and adversely affect our operating results. In addition,
    increases in prices for raw materials and components used in our
    products could adversely affect our operating
    results.
   41




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Significant
    and unexpected claims under our EverFlex self-expanding stent
    worldwide fracture-free guarantee program in excess of our
    reserves could significantly harm our business, operating
    results and financial condition.
    Our
    inability to successfully grow through future acquisitions, our
    failure to integrate any acquired businesses successfully into
    our existing operations or our discovery of previously
    undisclosed liabilities could negatively affect our business and
    operating results.
    
    difficulties in integrating any acquired companies, personnel
    and products into our existing business;
    delays in realizing projected efficiencies, cost savings,
    revenue synergies and other benefits of the acquired company or
    products;
    inaccurate assessment of undisclosed, contingent or other
    liabilities or problems; 42




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
    diversion of our managements time and attention from other
    business concerns;
    limited or no direct prior experience in new markets or
    countries we may enter;
    higher costs of integration than we anticipated; or
    difficulties in retaining key employees of the acquired business
    who are necessary to manage these acquisitions.      Charges
    resulting from the application of the purchase method of
    accounting relating to our acquisition of FoxHollow may
    adversely affect the market value of our common stock following
    the acquisition.
    We
    have incurred and expect to continue to incur significant
    transaction and integration-related costs in connection with our
    acquisition of FoxHollow and the integration of FoxHollows
    operations into ours.
   43




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The
    demand for our products, the prices which customers and patients
    are willing to pay for our products and the number of procedures
    performed using our products depend upon the ability of our
    customers and patients to obtain sufficient third party
    reimbursement for their purchases of our products.
  country-by-country and/or
      Consolidation
    in the healthcare industry could lead to demands for price
    concessions or to the exclusion of some suppliers from certain
    of our markets, which could have an adverse effect on our
    business, financial condition or operating
    results.
   44




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Our
    products and our product development and marketing activities
    are subject to extensive regulation as a result of which we may
    not be able to obtain required regulatory approvals for our
    products in a
    cost-effective
    manner or at all, which could adversely affect our business and
    operating results.
      
    imposing fines and penalties on us;
    preventing us from manufacturing or selling our products;
    bringing civil or criminal charges against us;
    delaying the introduction of our new products into the market;
    suspending any ongoing clinical trials;
    issuing an injunction preventing us from manufacturing or
    selling our products or imposing restrictions;
    recalling or seizing our products; or
    withdrawing or denying approvals or clearances for our products.  Our
    failure to comply with applicable regulatory requirements may
    also result in us not being able to meet the demands of our
    customers and our customers canceling orders or purchasing
    products from our competitors, which could adversely affect our
    business and operating results.
   45




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Our
    marketing activities are subject to regulation regarding the
    promotion of off-label uses, which restrict our
    ability to market our products and could adversely affect our
    growth. Any off-label use of our products may result in injuries
    that could lead to product liability claims against
    us.
     46




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If we
    or others identify side effects after any of our products are on
    the market, we may be required to withdraw our products from the
    market, which would hinder or preclude our ability to generate
    net sales.
    
    regulatory authorities may withdraw their approvals;
    we may be required to reformulate our products;
    we may have to recall the affected products from the market and
    may not be able to reintroduce them onto the market;
    our reputation in the marketplace may suffer; and
    we may become the target of lawsuits, including class action
    suits.    Our
    manufacturing facilities are subject to extensive governmental
    regulation with which compliance is costly and which expose us
    to penalties for non-compliance.
   47




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Our
    operations are subject to environmental, health and safety, and
    other laws and regulations, with which compliance is costly and
    which expose us to penalties for non-compliance.
    Our
    quarterly operating and financial results may fluctuate in
    future periods.
    
    the seasonality of our product sales, which typically results in
    higher demand in our fourth fiscal quarter and lower sales
    volumes in our third fiscal quarter;
    the mix of our products sold;
    demand for, and pricing of, our products;
    timing of or failure to obtain regulatory approvals for products;
    costs, benefits and timing of new product introductions;
    the timing and extent of promotional pricing or volume discounts;
    the timing of larger orders by customers and the timing of
    shipment of such orders;
    field inventory levels;
    changes in average selling prices;
    the availability and cost of components and materials; and
    fluctuations in foreign currency exchange rates.    We may
    become obligated to make large milestone payments that are not
    reflected in our financial statements in certain circumstances,
    which would negatively impact our cash flows from
    operations.
   48




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and/or
  We
    rely on independent sales distributors and sales associates to
    market and sell our products outside of the United States,
    Canada and Europe.
    If we
    fail to comply with the U.S. Federal Anti-Kickback Statute and
    similar state laws, we could be subject to criminal and civil
    penalties and exclusion from the Medicare, Medicaid and other
    federal health care programs, which could have a material
    adverse effect on our business and operating
    results.
     49




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If our
    distribution agreement with Invatec Technology Center GmbH
    expires or terminates and we are unable to commercially launch
    on a timely basis our own products to replace the products we
    currently distribute for Invatec in the United States or if we
    are unable to enter into a substitute arrangement with another
    third party or if there is a disruption in the supply of Invatec
    products that we distribute, our net sales and operating results
    would be adversely impacted.
    We are
    exposed to product liability claims that could have an adverse
    effect on our business and operating results.
    Our
    net sales could decline significantly if drug-eluting stents
    become a dominant therapy in the peripheral vascular stent
    market and we are not able to develop or acquire a drug-eluting
    stent to market and sell.
   50




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We
    face competition from other companies, many of which have
    substantially greater resources than us and may be able to more
    effectively develop, market and sell their products than we can,
    which could adversely impact our business, net sales and
    operating results. Consolidation in the medical technology
    industry would exacerbate these risks.
  start-up
     51




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We
    rely on our management information systems for inventory
    management, distribution and other functions and to maintain our
    research and development and clinical data. If our information
    systems fail to adequately perform these functions or if we
    experience an interruption in their operation, our business and
    operating results could be adversely affected.
    
    earthquake, fire, flood and other natural disasters;
    terrorist attacks and attacks by computer viruses or hackers; and
    power loss or computer systems, Internet, telecommunications or
    data network failure.    The
    restrictive covenants in our loan agreement could limit our
    ability to conduct our business and respond to changing economic
    and business conditions and may place us at a competitive
    disadvantage relative to other companies that are subject to
    fewer restrictions.
    
    transfer all or any part of our business or properties;
    permit or suffer a change in control;
    merge or consolidate, or acquire any entity;
    engage in any material new line of business;
    incur additional indebtedness or liens with respect to any of
    their properties;
    pay dividends or make any other distribution on or purchase of,
    any of their capital stock;
    make investments in other companies; or
    engage in related party transactions,   52




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and/or
  If we
    become profitable, we cannot assure you that our net operating
    losses will be available to reduce our tax
    liability.
    A
    substantial portion of our assets consist of goodwill and an
    impairment in the value of our goodwill would have the effect of
    decreasing our earnings or increasing our losses.
    Risks
    Related to our Common Stock
  One of
    our principal stockholders and its affiliates are able to
    influence matters requiring stockholder approval and could
    discourage the purchase of our outstanding shares at a
    premium.
   53




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Certain
    of our principal stockholders may have conflicts of interests
    with our other stockholders or our company in the
    future.
    
    create competing financial demands on our principal stockholders;
    create potential conflicts of interest; and
    require efforts consistent with applicable law to keep the other
    businesses separate from our operations.    Our
    corporate documents and Delaware law contain provisions that
    could discourage, delay or prevent a change in control of our
    company.
     54




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A
    large percentage of our outstanding common stock is held by
    insiders, and, as a result, the trading market for the common
    stock will not be as liquid as the stock of other public
    companies, and our common stock price could be
    volatile.
    
    the introduction of new products or product enhancements by us
    or our competitors;
    changes in our growth rate or our competitors growth rates;
    strategic actions by us or our competitors, such as acquisitions
    or restructurings;
    our ability to develop, obtain regulatory clearance or approval
    for, and market new and enhanced products on a timely basis;
    loss of any of key management personnel;
    disputes or other developments with respect to intellectual
    property rights;
    product liability claims or other litigation;
    public concern as to the safety or efficacy of our products;
    the publics reaction to our press releases and other
    public announcements and our filings with the SEC;
    sales of common stock by us, our significant stockholders,
    executive officers or directors;
    changes in stock market analyst recommendations or earnings
    estimates regarding our common stock, other comparable companies
    or our industry generally;
    changes in expectations or future performance;
    new laws or regulations or new interpretations of existing laws
    or regulations applicable to our business; and
    changes in health care policy in the United States and
    internationally, including changes in the availability of
    third-party reimbursement.    We do
    not intend to pay dividends for the foreseeable
    future.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES   55




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ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   56




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ITEM 4A.
    EXECUTIVE
    OFFICERS OF THE REGISTRANT    Name

Age

PositionJames M. Corbett


49


Chairman, President and Chief Executive OfficerStacy Enxing Seng


43


Senior Vice President and President, Peripheral Vascular and
    FoxHollow Technologies DivisionsMatthew Jenusaitis


46


Senior Vice President and President, Neurovascular DivisionPascal E.R. Girin


48


Senior Vice President and President, InternationalKevin M. Klemz


46


Senior Vice President, Secretary and Chief Legal OfficerP. Richard Lunsford


50


Senior Vice President and President, U.S. Commercial OperationsGregory Morrison


44


Senior Vice President, Human ResourcesDavid H. Mowry


45


Senior Vice President, Corporate ManufacturingPatrick D. Spangler


52


Senior Vice President and Chief Financial OfficerJulie D. Tracy


46


Senior Vice President and Chief Communications Officer     James M. Corbett
  Stacy Enxing Seng
  Matthew Jenusaitis
 57




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Pascal E.R. Girin
  Kevin M. Klemz
  P. Richard Lunsford
  Gregory Morrison
  David H. Mowry
  Patrick D. Spangler
  Julie D. Tracy
 58




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Price
      High


Low2007First Quarter

$
21.34


$
17.03Second Quarter

$
21.54


$
16.42Third Quarter

$
19.46


$
15.06Fourth Quarter

$
18.84


$
11.66   High


Low2006First Quarter

$
17.98


$
13.83Second Quarter

$
18.00


$
12.51Third Quarter

$
17.82


$
14.29Fourth Quarter

$
19.05


$
16.39   Number of
    Record Holders; Dividends
    Recent
    Sales of Unregistered Equity Securities
   59




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Issuer
    Purchases of Equity Securities
  Rule 10b-18(a)(3)
  Total Number of


Maximum Number ofTotal





Shares Purchased as


Shares that May YetNumber


Average Price


Part of Publicly


Be Purchased Underof Shares


Paid Per


Announced Plans or


the Plans orPeriod

Purchased(1)


Share


Programs(2)


Programs(2)Month # 1 (October 1, 2007  October 31,
    2007)


15,721


$
16.53



N/A



N/AMonth # 2 (November 1, 2007  November 30,
    2007)


6,600



15.40



N/A



N/AMonth # 3 (December 1, 2007  December 31,
    2007)


10,125



12.71



N/A



N/ATotal:


32,446


$
15.11



N/A



N/A     (1)
    
    Consists of shares repurchased from employees in connection with
    the required payment of withholding or employment-related tax
    obligations due in connection with the vesting of restricted
    stock awards.(2)
    
    Our board of directors has not authorized any repurchase plan or
    program for purchase of our shares of common stock or other
    equity securities on the open market or otherwise, other than an
    indefinite number of shares in connection with the cashless
    exercise of outstanding stock options and the surrender of
    shares of common stock upon the issuance or vesting of stock
    grants to satisfy any required withholding or employment-related
    tax obligations.   60




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Stock
    Performance Graph
      COMPARISON
    OF 30 MONTH CUMULATIVE TOTAL RETURN*
 
  
  *
    $100 invested on 6/16/05 in stock or on 5/31/05 in
    index-including reinvestment of dividends. 
    Fiscal year ending December 31.  The foregoing Stock Performance Graph shall not be deemed to
    be filed with the Securities and Exchange Commission
    or subject to the liabilities of Section 18 of the
    Securities Exchange Act of 1934, as amended. Notwithstanding
    anything to the contrary set forth in any of our previous
    filings under the Securities Act of 1933, as amended, or the
    Securities Exchange Act of 1934, as amended, that might
    incorporate future filings, including this annual report on
    Form 10-K,
    in whole or in part, the foregoing Stock Performance Graph shall
    not be incorporated by reference into any such filings.
 61




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ITEM 6.
    SELECTED
    FINANCIAL DATA    For the Year Ended December 31,2007(1)


2006


2005


2004


2003(dollars in thousands, except per unit and per share
    amounts)Results of Operations:SalesProduct sales

$
278,226


$
202,438


$
133,696


$
86,334


$
67,639Research collaboration


5,957















Net sales


284,183



202,438



133,696



86,334



67,639Operating expenses:Product cost of goods sold


99,879



71,321



55,094



39,862



30,218Research collaboration


1,065















Sales, general and administrative


195,267



141,779



130,427



103,031



82,479Research and development


48,413



26,725



39,280



38,917



45,145Amortization of intangible assets


20,306



17,223



10,673



9,863



12,078(Gain) loss on sale of assets, net


(978
)


162



200



(14,364
)


14Acquired in-process research and development


70,700



1,786



868







488Special charges


19,054















Total operating expenses


453,706



258,996



236,542



177,309



170,422Loss from operations


(169,523
)


(56,558
)


(102,846
)


(90,975
)


(102,783
)Other (income) expense:Loss (gain) on sale of investments, net


116



(1,063
)


(4,611
)


(1,728
)


(3,409
)Interest (income) expense, net


(1,910
)


(1,695
)


9,916



25,428



12,673Minority interest in loss of subsidiary










(2,013
)


(13,846
)


(3,808
)Other (income) expense, net


(2,934
)


(2,117
)


3,360



(1,752
)


(1,606
)Loss before income taxes


(164,795
)


(51,683
)


(109,498
)


(99,077
)


(106,633
)Income tax expense


949



688



526



196



303Net loss


(165,744
)


(52,371
)


(110,024
)


(99,273
)


(106,936
)Accretion of preferred membership units to redemption value(2)










12,061



23,826



7,651Net loss attributable to common unit/share holders

$
(165,744
)

$
(52,371
)

$
(122,085
)

$
(123,099
)

$
(114,587
)Net loss per common unit/share(3):Basic and diluted

$
(2.37
)

$
(0.93
)

$
(4.48
)

$
(57.44
)

$
(130.67
)Weighted average units/shares outstanding:Basic and diluted


69,909,708



56,585,025



27,242,712



2,142,986



876,894     (1)
    
    We acquired FoxHollow Technologies, Inc. on October 4,
    2007. The acquisition was accounted for under the purchase
    method of accounting and the results of operations of FoxHollow
    have been included in our consolidated results as of the
    acquisition date. In connection with the acquisition, we
    recorded 62




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$14.9 million of integration costs associated with the
    acquisition and recognized $70.7 million for in-process
    research and development charges. For a more complete
    description of these items and their impact on our consolidated
    financial results, see Note 4 to our consolidated financial
    statements.(2)
    
    The accretion of preferred membership units to redemption value
    presented above is based on the rights to which the Class A
    and Class B preferred membership unit holders of ev3 LLC
    were entitled related to a liquidation, dissolution or winding
    up of ev3 LLC. Notwithstanding this accretion right, in
    connection with the merger of ev3 LLC with and into ev3 Inc.,
    each membership unit representing a preferred equity interest in
    ev3 LLC was converted into one share of our common stock and did
    not receive any additional rights with respect to the
    liquidation preference. Accretion was discontinued upon
    conversion of the preferred units to common equity at the time
    of our initial public offering on June 21, 2005.(3)
    
    Net loss per common unit/share and number of units/shares used
    in per unit/share calculations reflect our June 21, 2005
    one for six reverse stock split for all periods presented.  As of December 31,2007


2006


2005


2004


2003(dollars in thousands)Balance Sheet Data:Cash and cash equivalents

$
81,060


$
24,053


$
69,592


$
20,131


$
23,625Short-term investments


9,744



14,700



12,000







Current assets


228,370



135,845



151,675



68,609



58,687Total assets


1,087,106



352,826



296,828



212,046



207,023Current liabilities excluding demand notes


119,159



41,767



37,671



36,025



32,379Demand notes payable-related parties














299,453



213,033Total liabilities


128,625



47,592



38,523



336,180



250,676Preferred membership units














254,028



230,202Total members and stockholders equity (deficit)


958,481



305,234



245,455



(394,472
)


(285,672
)   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    
    Business Overview.  This section provides a
    brief overview description of our business, focusing in
    particular on developments during the most recent fiscal year.
    Summary of 2007 Results and 2008 Outlook.  This
    section provides a brief summary of our financial results and
    financial condition for fiscal 2007 and our outlook for fiscal
    2008.
    Sales and Expense Components.  This section
    provides a description of the significant line items in our
    consolidated statement of operations.
    Results of Operations.  This section provides
    our analysis of the significant line items in our consolidated
    statement of operations.
    Seasonal and Quarterly Fluctuations.  This
    section describes the effects of seasonal and quarterly
    fluctuations in our business. 63




---



##### Table of Contents




    Liquidity and Financial Resources.  This
    section provides an analysis of our liquidity and cash flow and
    a discussion of our outstanding debt and commitments.
    Critical Accounting Policies and
    Estimates.  This section discusses the accounting
    estimates that are considered important to our financial
    condition and results of operations and require us to exercise
    subjective or complex judgments in their application. All of our
    significant accounting policies, including our critical
    accounting estimates, are summarized in Note 2 to our
    consolidated financial statements.
    Recent Accounting Pronouncements.  This section
    discusses recent accounting pronouncements that have had or may
    affect our results of operations and financial condition.  Business
    Overview
         64




---



##### Table of Contents



Summary
    of 2007 Results and Outlook for 2008
   65




---



##### Table of Contents




    Our net sales increased 40% to $284.2 million in 2007
    compared to 2006 reflecting sales growth in each of our
    reportable business segments and geographic markets. In
    particular, our sales growth was positively affected by an
    increase in sales of our EverFlex self-expanding stents and
    neurovascular products, increased market penetration of products
    introduced during the past two years and our acquisition of
    FoxHollow.
    Net sales of our peripheral vascular products increased 43% to
    $173.8 million in 2007 compared to 2006 primarily as a
    result of increased market penetration of our EverFlex and
    Protégé RX Carotid Stents, SpiderFX Embolic Protection
    Device and PTA balloon catheters and our acquisition of
    FoxHollow, partially offset by sales declines in older
    generation products. We expect our peripheral vascular sales to
    increase in 2008 as compared to 2007 primarily as a result of
    increased cross-selling opportunities as a result of our
    acquisition of FoxHollow, the introduction of our atherectomy
    products into international markets, additional market
    penetration of products launched during 2006 and 2007 and new
    product introductions anticipated in 2008. We believe that our
    atherectomy, stent and embolic protection sales will continue to
    contribute to our sales growth in our peripheral vascular
    segment in 2008 as compared to 2007.
    Net sales of our neurovascular products increased 28% to
    $104.4 million in 2007 compared to 2006 primarily as a
    result of increased market penetration of our existing products,
    including in particular our Onyx Liquid Embolic System for the
    treatment of brain arterial-venous malformations and our Axium
    coil, which was launched on a worldwide basis in fourth quarter
    2007, and sales growth in virtually all of our neurovascular
    access and delivery products, partially offset by sales declines
    in older generation products. We expect our neurovascular sales
    to increase in 2008 as compared to 2007 due to market growth,
    developing new customer accounts, additional market penetration
    of products launched during 2007 and 2006, and new product
    introductions anticipated in 2008, including our Solitaire Flow
    Restoration stent which we have recently started to selectively
    commercialize in Europe. 66




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##### Table of Contents




    In October 2007, we completed our acquisition of FoxHollow,
    which broadened our peripheral vascular product offering to
    include atherectomy and additional thrombectomy products,
    including in particular the SilverHawk Plaque Excision System.
    Our net sales in 2007 included $20.9 million of net sales
    from FoxHollow products.
    As a result of our FoxHollow acquisition, we now recognize
    research collaboration revenue and incur research collaboration
    expense from our collaboration and license agreement with Merck.
    Research collaboration revenue, which is recognized on a
    straight-line basis over the four-year term of the
    license/exclusivity portion of the agreement and further limited
    to cumulative amounts due and collected at any given point under
    the arrangement, was $6.0 million in 2007. Research
    collaboration expense was $1.1 million in 2007. As a result
    of Dr. Simpsons resignation from our board of
    directors in February 2008, Merck has the right to terminate the
    collaboration and license agreement at any time within six
    months of Dr. Simpsons resignation. We expect that
    research collaboration expense will fluctuate in absolute
    dollars and as a percentage of our research collaboration
    revenue as the amount of services we perform under the agreement
    will vary from period to period.
    Approximately 38% of our net sales during 2007 were generated
    outside of the United States compared to 40% during 2006. The
    sales growth in our international markets was primarily a result
    of new product introductions and increased market penetration of
    existing products. Changes in foreign currency exchange rates
    had a positive impact of $6.0 million on our 2007 net
    sales as compared to a positive impact of $443,000 on our
    2006 net sales, principally resulting in both periods from
    the performance of the Euro against the U.S. dollar.
    In our peripheral vascular segment, product cost of goods sold
    as a percentage of product sales decreased to 30% in 2007
    compared to 43% in 2006 primarily attributable to increased
    sales volumes, offset by the commencement of royalty payments in
    2007 on certain of our nitinol products, the
    write-up of
    FoxHollow inventory as required under purchase accounting which
    increased product cost of goods sold by $1.8 million when
    the inventory was sold in the fourth quarter 2007, and
    adjustments in our excess and obsolete inventory reserves for
    the planned discontinuance of the Primus balloon expandable
    stent and the Sailor .035 balloon due to our strategic marketing
    focus on new product introductions. In our neurovascular
    segment, cost of goods sold as a percentage of product sales
    decreased to 21% in 2007 compared to 24% in 2006 primarily
    attributable to increased sales volumes and on-going cost
    savings programs, offset by the commencement of royalty payments
    in 2007 on certain of our nitinol products. We expect product
    cost of goods sold as a percentage of product sales to decline
    in 2008 as compared to 2007 due to higher volumes in our
    manufacturing facilities and efficiency improvements from
    manufacturing initiatives, offset in part by anticipated
    conversion costs associated with new product launches
    anticipated to occur in 2008.
    We incurred special charges of $19.1 million in 2007 as a
    result of us entering into agreements in principle to settle
    certain patent infringement and other litigation with The
    Regents of the University of California and Boston Scientific
    Corporation in the third quarter. We have not yet entered into
    final definitive settlement agreements but expect to do so in
    the near future.
    Our operating expenses increased 75% in 2007 compared to 2006
    primarily as a result of our acquisition of FoxHollow. In 2007,
    our operating expenses included a charge of $70.7 million
    for acquired in-process research and development as a result of
    the acquisition. We expect our sales, general and administrative
    expenses, research and development expense and amortization of
    intangible assets to increase in absolute dollars in 2008 as
    compared to 2007. We expect sales, general and administrative
    expenses and research and development to decline as a percentage
    of net sales.
    In April 2007, we completed a secondary public offering issuing
    2,500,000 shares of our common stock which generated
    approximately $44.5 million in net proceeds to us.
    At the time of the FoxHollow acquisition, FoxHollow had
    $166.9 million in cash, cash equivalents and short-term
    investments. We used $99.3 million to pay FoxHollow
    stockholders the cash portion of the 67




---



##### Table of Contents



merger consideration. Total consideration for the transaction
    was $856.9 million and is discussed further in Note 4
    of the consolidated financial statements included elsewhere in
    this report.  
    Our subsidiaries, ev3 Endovascular, Inc., ev3 International,
    Inc., Micro Therapeutics, Inc. and FoxHollow Technologies, Inc.,
    are parties to a loan and security agreement with Silicon Valley
    Bank, consisting of a $30 million revolving line of credit
    and a $12.5 million equipment financing line. In March
    2007, we increased the four-year equipment financing line from
    $7.5 million to $12.5 million. The revolving line of
    credit expires in June 2008.
    Our net loss for 2007 increased to $165.7 million, or $2.37
    per share, in 2007 compared to $52.4 million, or $0.93 per
    share, in 2006. Our focus for 2008 is to improve our
    profitability. Although we expect to generate cash from
    operations in 2008, no assurance can be provided that we will do
    so, especially if we incur significant unanticipated costs or do
    not achieve our anticipated net sales during 2008.
    Our cash, cash equivalents and short-term investments available
    to fund our current operations were $90.8 million at
    December 31, 2007. We believe our cash, cash equivalents,
    short-term investments, anticipated cash from operations and
    current and anticipated financing arrangements will be
    sufficient to meet our liquidity requirements through at least
    the next 12 months.  Sales and
    Expense Components
    Product net sales.
  Research collaboration (revenue). year-to-year four-year
  Product cost of goods sold.
 68




---



##### Table of Contents



Research collaboration (expense).
  Sales, general and administrative
    expenses.
  Research and development.
  Amortization of intangible assets.
  (Gain) loss on sale of assets, net.
  Acquired in-process research and
    development.
  Special charges.
  (Gain) loss on sale of investments,
    net.
  Interest (income) expense, net.
  Minority interest in loss of
    subsidiary.
  Other (income) expense, net.
  Income tax expense.
  Accretion of preferred membership units to redemption
    value.
 69




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##### Table of Contents



Results
    of Operations
    For the Year Ended


For the Year EndedDecember 31,


December 31,Percent








PercentResults of Operations:

2007


2006


Change


2006


2005


ChangeSalesProduct sales

$
278,226


$
202,438



37.4
%

$
202,438


$
133,696



51.4
%Research collaboration


5,957







NM











NMNet sales


284,183



202,438



40.4
%


202,438



133,696



51.4
%Operating expenses:Product cost of goods sold


99,879



71,321



40.0
%


71,321



55,094



29.5
%Research collaboration


1,065







NM











NMSales, general and administrative


195,267



141,779



37.7
%


141,779



130,427



8.7
%Research and development


48,413



26,725



81.2
%


26,725



39,280



(32.0
)%Amortization of intangible assets


20,306



17,223



17.9
%


17,223



10,673



61.4
%(Gain) loss on sale of assets, net


(978
)


162



NM



162



200



NMAcquired in-process research and development


70,700



1,786



NM



1,786



868



NMSpecial charges


19,054







NM











NMTotal operating expenses


453,706



258,996



75.2
%


258,996



236,542



9.5
%Loss from operations


(169,523
)


(56,558
)


NM



(56,558
)


(102,846
)


(45.0
)%Other (income) expense:Loss (gain) on sale of investments, net


116



(1,063
)


NM



(1,063
)


(4,611
)


(76.9
)%Interest (income) expense, net


(1,910
)


(1,695
)


NM



(1,695
)


9,916



NMMinority interest in loss of subsidiary










NM







(2,013
)


NMOther (income) expense, net


(2,934
)


(2,117
)


NM



(2,117
)


3,360



NMLoss before income taxes


(164,795
)


(51,683
)


NM



(51,683
)


(109,498
)


(52.8
)%Income tax expense


949



688



37.9
%


688



526



30.8
%Net loss


(165,744
)


(52,371
)


NM



(52,371
)


(110,024
)


(52.4
)%Accretion of preferred membership units to redemption value(1)










NM







12,061



NMNet loss attributable to common share/unit holders

$
(165,744
)

$
(52,371
)


NM


$
(52,371
)

$
(122,085
)


(57.1
)%     (1)
    
    The accretion of preferred membership units to redemption value
    presented above is based on the rights to which the Class A
    and Class B preferred membership unit holders of ev3 LLC
    were entitled related to a liquidation, dissolution or winding
    up of ev3 LLC. Notwithstanding this accretion right, in
    connection with the merger of ev3 LLC with and into us, each
    membership unit representing a preferred equity interest in ev3
    LLC was converted into the right to receive one share of our
    common stock and did not receive any additional rights with
    respect to the liquidation preference. Accretion was
    discontinued upon conversion of the preferred units to common
    equity at the time of our initial public offering in June 2005. 70




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##### Table of Contents



For the Year Ended





For the Year EndedDecember 31,


Percent


December 31,


PercentNet Sales by Segment

2007


2006


Change


2006


2005


ChangePeripheral vascular:Atherectomy

$
20,884


$




100.0
%

$



$




Stents


86,035



64,092



34.2
%


64,092



37,871



69.2
%Thrombectomy and embolic protection


25,998



21,606



20.3
%


21,606



12,869



67.9
%Procedural support and other


40,858



35,406



15.4
%


35,406



29,141



21.5
%Total Peripheral vascular

$
173,775


$
121,104



43.5
%

$
121,104


$
79,881



51.6
%Neurovascular:Embolic products

$
56,003


$
38,998



43.6
%

$
38,998


$
22,463



73.6
%Neuro access and delivery products


48,448



42,336



14.4
%


42,336



31,352



35.3
%Total Neurovascular

$
104,451


$
81,334



28.4
%

$
81,334


$
53,815



51.1
%Research collaboration:

$
5,957


$




100.0
%

$



$




Total net sales

$
284,183


$
202,438



40.4
%

$
202,438


$
133,696



51.4
%   For the Year Ended





For the Year EndedDecember 31,


Percent


December 31,


PercentNet Sales by Geography

2007


2006


Change


2006


2005


ChangeUnited States

$
177,198


$
121,180



46.2
%

$
121,180


$
71,848



68.7
%InternationalBefore foreign exchange impact


101,020



81,258



24.3
%


80,815



61,848



30.7
%Foreign exchange impact


5,965











443







Total


106,985



81,258



31.7
%


81,258



61,848



31.4
%Total

$
284,183


$
202,438



40.4
%

$
202,438


$
133,696



51.4
%   Comparison
    of the Year Ended December 31, 2007 to the Year Ended
    December 31, 2006
  Net sales.
  Net sales of peripheral vascular products.
 71




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##### Table of Contents



Net sales of neurovascular products.
  Research collaboration (revenue).
  Net sales by geography.
  Product cost of goods sold. write-up
  Research collaboration (expense).
  Sales, general and administrative
    expenses.
 72




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##### Table of Contents



Research and development expense.
  Amortization of intangible
    assets.
  Acquired in-process research and
    development.
        Special charges.
 73




---



##### Table of Contents



(Gain) loss on sale of investments,
    net.
  Interest (income) expense, net.
  2007


2006Interest income

$
(3,284
)

$
(2,469
)Interest expense


1,374



774Interest (income) expense, net

$
(1,910
)

$
(1,695
)     Other (income) expense, net.
  Income tax expense.
  Comparison
    of the Year Ended December 31, 2006 to the Year Ended
    December 31, 2005
  Net sales.
  Net sales of peripheral vascular products.
  Net sales of neurovascular products.
 74




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##### Table of Contents



Net sales by geography.
  Product cost of goods sold.
  Sales, general and administrative
    expenses.
  Research and development expense.
  Amortization of intangible
    assets.
  Acquired in-process research and
    development.
  (Gain) loss on sale of investments,
    net.
 75




---



##### Table of Contents



Interest (income) expense, net.
  2006


2005Interest income

$
(2,469
)

$
(2,475
)Interest expense


774



12,391Interest (income) expense, net

$
(1,695
)

$
9,916     Other (income) expense, net.
  Income tax expense.
  Accretion of preferred membership units to redemption
    value.
  Seasonality
    and Quarterly Fluctuations
     76




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##### Table of Contents



Liquidity
    and Capital Resources
    As of December 31,Balance Sheet Data

2007


2006(Dollars in thousands)Cash and cash equivalents

$
81,060


$
24,053Short-term investments


9,744



14,700Total current assets


228,370



135,845Total assets


1,087,106



352,826Total current liabilities


119,159



41,767Total liabilities


128,625



47,592Total stockholders equity


958,481



305,234   Working
    Capital
  Financing history.
    Credit facility.
   77




---



##### Table of Contents



Cash, cash equivalents and short-term
    investments.
  Cash
    Flows
  Operating activities.
  Investing activities.
 78




---



##### Table of Contents



Financing activities.
  Contractual
    Cash Obligations
    Payments Due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years


Other(Dollars in thousand)Notes payable

$
10,000


$
3,571


$
6,071


$
358


$



$
Purchase commitments(1)


14,943



14,943















Operating leases(2)


26,595



6,456



9,727



3,909



6,503



FASB Interpretation 48 income tax obligations, including
    interest and penalties(3)


1,006



397















609Total

$
52,544


$
25,367


$
15,798


$
4,267


$
6,503


$
609     (1)
    
    Represents commitments for minimum inventory purchases related
    to our distribution agreement with Invatec. We do not have any
    other significant purchase obligations for the delivery of goods
    or services or other commercial commitments. These payments are
    denominated in Euros and were translated in the tables above
    based on the respective U.S. dollar exchange rate at
    December 31, 2007. See Note 19 to our consolidated
    financial statements included elsewhere in this report.(2)
    
    The amounts reflected in the table above for operating leases
    represent future minimum lease payments under non-cancelable
    operating leases primarily for certain office space, warehouse
    space, computers and vehicles. Portions of these payments are
    denominated in foreign currencies and were translated in the
    tables above based on their respective U.S. dollar exchange
    rates at December 31, 2007. These future payments are
    subject to foreign currency exchange rate risk. In accordance
    with U.S. generally accepted accounting principles, or GAAP, our
    operating leases are not recognized on our consolidated balance
    sheet.(3)
    
    The FASB Interpretation 48 income tax obligations of $609,000
    included in the other column in the table above
    represent an amount of potential tax liabilities that we are
    uncertain as to if or when such amounts may be settled. 79




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Other
    Liquidity Information
           80




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
        Revenue
    Recognition
   81




---



##### Table of Contents



Stock-Based
    Compensation
            Allowance
    for Doubtful Accounts
      Excess
    and Obsolete Inventory
   82




---



##### Table of Contents



Valuation
    of Acquired In-Process Research and Development, Goodwill and
    Other Intangible Assets
         83




---



##### Table of Contents



Accounting
    for Income Taxes
        Recent
    Accounting Pronouncements
     84




---



##### Table of Contents



SFAS No. 157-2, SFAS No. 157-2)
  contract-by-contract
    No. 06-3, (EITF 06-3). EITF 06-3
  No. 07-3, (EITF 07-3) EITF 07-3 EITF 07-3
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   85




---



##### Table of Contents



Interest
    Rate Risk
      Foreign
    Currency Exchange Rate Risk
     86




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   
 Description

PageManagements Report on Internal Control over
    Financial Reporting

F-1Reports of Independent Registered Public
    Accounting Firms

F-2  F-4Consolidated Balance Sheets as of December 31,
    2007 and 2006

F-5Consolidated Statements of Operations for the
    years ended December 31, 2007, 2006 and 2005

F-6Consolidated Statements of Members and
    Stockholders Equity (Deficit) for the years ended December
    31, 2007, 2006 and 2005

F-7Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005

F-8Notes to the Consolidated Financial Statements
    for the years ended December 31, 2007, 2006 and 2005

F-9  F-45Schedule II  Valuation and Qualifying
    Accounts

F-46   87




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##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rules 13a-15(f) 15d-15(f)
          /s/  James
    M. Corbett

/s/  Patrick
    D. SpanglerJames M. Corbett

Patrick D. SpanglerChairman, President and Chief Executive Officer

Senior Vice President and Chief Financial Officer      F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                    
     F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Share Based
    Payment Accounting for Uncertainty in Income Taxes an
    interpretation of FASB Statement No. 109.
     
     F-3




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
      
    F-4




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##### Table of Contents



ev3
    Inc.



CONSOLIDATED
    BALANCE SHEETS

(Dollars in thousands, except per share/unit amounts) December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
81,060


$
24,053Short-term investments


9,744



14,700Accounts receivable, less allowance of $6,783 and $3,924
    respectively


66,170



45,137Inventories


64,044



42,124Prepaid expenses and other assets


6,371



7,162Other receivables


981



2,669Total current assets


228,370



135,845Restricted cash


2,204



2,022Property and equipment, net


37,985



24,072Goodwill


586,648



149,061Other intangible assets, net


231,000



40,014Other assets


899



1,812Total assets

$
1,087,106


$
352,826LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
21,511


$
13,140Accrued compensation and benefits


35,301



16,382Accrued liabilities


49,429



10,102Deferred revenue


9,347



Current portion of long-term debt


3,571



2,143Total current liabilities


119,159



41,767Long-term debt


6,429



5,357Other long-term liabilities


3,037



468Total liabilities


128,625



47,592Stockholders equityCommon stock, $0.01 par value, 300,000,000 shares
    authorized, 105,078,769 and 57,594,742 shares issued and
    outstanding as of December 31, 2007 and 2006, respectively


1,051



576Additional paid in capital


1,739,064



919,221Accumulated deficit


(781,039
)


(614,578
)Accumulated other comprehensive income


(595
)


15Total stockholders equity


958,481



305,234Total liabilities and stockholders equity

$
1,087,106


$
352,826    F-5




---



##### Table of Contents



ev3
    Inc.



CONSOLIDATED
    STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share/unit amounts) For the Years Ended December 31,2007


2006


2005SalesProduct sales

$
278,226


$
202,438


$
133,696Research collaboration


5,957







Net sales


284,183



202,438



133,696Operating expenses:Product cost of goods sold


99,879



71,321



55,094Research collaboration


1,065







Sales, general and administrative


195,267



141,779



130,427Research and development


48,413



26,725



39,280Amortization of intangible assets


20,306



17,223



10,673(Gain) loss on sale of assets, net


(978
)


162



200Acquired in-process research and development


70,700



1,786



868Special charges


19,054







Total operating expenses


453,706



258,996



236,542Loss from operations


(169,523
)


(56,558
)


(102,846
)Other (income) expense:Loss (gain) on sale of investments, net


116



(1,063
)


(4,611
)Interest (income) expense, net


(1,910
)


(1,695
)


9,916Minority interest in loss of subsidiary










(2,013
)Other (income) expense, net


(2,934
)


(2,117
)


3,360Loss before income taxes


(164,795
)


(51,683
)


(109,498
)Income tax expense


949



688



526Net loss


(165,744
)


(52,371
)


(110,024
)Accretion of preferred membership units to redemption value










12,061Net loss attributable to common share/unit holders

$
(165,744
)

$
(52,371
)

$
(122,085
)Net loss per common share/unit (basic and diluted)(a)

$
(2.37
)

$
(0.93
)

$
(4.48
)Weighted average shares/units outstanding (basic and diluted)(a)


69,909,708



56,585,025



27,242,712     (a)
    
    Net loss per common share/unit attributable to common holders
    and the weighted average common shares outstanding reflect the
    June 21, 2005
    1-for-6
    reverse stock split.   F-6




---



##### Table of Contents



ev3
    Inc.
    CONSOLIDATED STATEMENTS OF MEMBERS AND
    STOCKHOLDERS EQUITY (DEFICIT)
    (Dollars in thousands, except per share/unit amounts)  TotalAccumulated





Members andOther





StockholdersMembers


Common Stock





Comprehensive


Accumulated


EquityUnits


Capital


Shares


Amount


APIC


Income (Loss)


Deficit


(Deficit)Balance as of January 1, 2005


15,293,490


$
47,927






$



$



$
(1,694
)

$
(440,705
)

$
(394,472
)Accretion of preferred membership units


























(12,061
)


(12,061
)Compensation expense on options






1,309











3,530











4,839Exercise of options


502,140



660



49,193







430











1,090Restricted stock grant










185,000



2



(2
)










Members contribution


3,004,332



8,404























8,404Conversion of preferred/common membership units


(18,799,962
)


(58,300
)


83,918,016



839



323,550











266,0891-for-6
    reverse common stock split










(69,931,666
)


(699
)


699











Contribution of demand notes










23,159,304



231



323,999











324,230Common stock issued in conjunction with initial public offering










11,970,800



120



154,826











154,946Comprehensive loss:Net loss


























(110,024
)


(110,024
)Cumulative translation adjustment






















1,831







1,831Gain on change in ownership percentage of MTI


























583



583Comprehensive loss






























(107,610
)Balance December 31, 2005





$




49,350,647


$
493


$
807,032


$
137


$
(562,207
)

$
245,455Compensation expense on options and restricted stock


















6,760











6,760Exercise of options










1,160,594



12



9,924











9,936MTI acquisition










6,997,354



70



95,368











95,438Unrestricted stock grants










28,341







393











393Restricted stock grant










74,024



1



(1
)










Shares repurchased










(16,218
)






(255
)










(255
)Comprehensive loss:Net loss


























(52,371
)


(52,371
)Cumulative translation adjustment






















(122
)






(122
)Comprehensive loss






























(52,493
)Balance December 31, 2006





$




57,594,742


$
576


$
919,221


$
15


$
(614,578
)

$
305,234Cumulative effect of adoption of FIN 48


























(717
)


(717
)Common stock issued in conjunction with secondary offering










2,500,000



25



44,517











44,542Compensation expense on equity awards and stock purchase plan


















11,127











11,127Exercise of options










664,178



7



6,719











6,726Restricted stock grants, net of cancellations










1,176,321



12



(12
)










Common stock issued under employee stock purchase plan










60,534







868











868Shares repurchased










(33,258
)






(507
)










(507
)Common stock issued in acquisition of FoxHollow










43,118,667



431



757,131











757,562FoxHollow stock transactions, other










(2,415
)


















Comprehensive loss:Net loss


























(165,744
)


(165,744
)Changes in unrealized gains (losses) on investments






















(174
)






(174
)Cumulative translation adjustment






















(436
)






(436
)Comprehensive loss






























(166,354
)Balance December 31, 2007





$




105,078,769


$
1,051


$
1,739,064


$
(595
)

$
(781,039
)

$
958,481    F-7




---



##### Table of Contents



ev3
    Inc.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS

(Dollars in
    thousands, except per share/unit amounts)  For the Years Ended December 31,2007


2006


2005Operating activitiesNet loss

$
(165,744
)

$
(52,371
)

$
(110,024
)Adjustments to reconcile net loss to net cash used in operating
    activitiesDepreciation and amortization


28,726



22,878



14,816Provision for bad debts and sales returns


2,024



728



650Provision for inventory obsolescence


8,308



3,787



4,037Acquired in-process research and development


70,700



1,786



868(Gain) loss on disposal of assets


(978
)


162



200Gain on sales of investments






(1,063
)


(4,611
)Stock compensation expense


11,127



7,153



4,873Minority interest in loss of subsidiary










(2,013
)Change in operating assets and liabilities, net of acquired:Accounts receivable


1,340



(17,362
)


(10,477
)Inventories


(14,524
)


(12,287
)


(14,712
)Prepaids and other assets


2,836



(619
)


4,177Accounts payable


3,060



1,186



3,804Accrued expenses and other liabilities


(5,408
)


(890
)


882Deferred revenue


9,347







Accrued interest demand notes payable










(24,319
)Net cash used in operating activities


(49,186
)


(46,912
)


(131,849
)Investing activitiesPurchase of short-term investments






(6,750
)


(12,000
)Proceeds from sale of short-term investments


6,900



4,050



Purchase of property and equipment


(13,804
)


(11,983
)


(13,216
)Purchase of patents and licenses


(3,270
)


(3,516
)


(1,677
)Purchase of distribution rights


(6,500
)






Proceeds from sale of assets


2,035



69



17Proceeds from sale of investments






1,063



4,611Acquisitions, net of cash acquired






(70
)


(5,703
)Payments for the acquisition of FoxHollow, net of cash acquired


65,556







Return of acquisition consideration










2,124Increase (decrease) in restricted cash


1,007



1,116



(266
)Other










841Net cash provided by (used in) investing activities


51,924



(16,021
)


(25,269
)Financing activitiesProceeds from issuance of common stock, net

$
44,542


$



$
Proceeds from initial public offering, net










154,946Issuance of demand notes payable










49,100Proceeds from long-term debt


5,000



7,500



Payments on long-term debt


(2,499
)






Payments on capital lease obligations


(139
)


(123
)


(29
)Proceeds from exercise of stock options


6,726



9,936



1,090Proceeds from issuance of subsidiary stock to minority
    shareholders










1,041Proceeds from term financing










600Debt issuance costs






(118
)


Proceeds from employee stock purchase plan


868







Other


(507
)


(255
)


Net cash provided by financing activities


53,991



16,940



206,748Effect of exchange rate changes on cash


278



454



(169
)Net increase (decrease) in cash and cash equivalents


57,007



(45,539
)


49,461Cash and cash equivalents, beginning of period


24,053



69,592



20,131Cash and cash equivalents, end of period

$
81,060


$
24,053


$
69,592Supplemental cash flow information:Cash paid for interest

$
1,400


$
626


$
36,581Cash paid for income taxes

$
610


$
570


$
24Supplemental non-cash disclosure:Financed insurance premiums (see Note 19)

$



$
3,500


$
Net assets acquired in conjunction with the acquisition of
    FoxHollow (see Note 4)

$
856,915


$



$
Earn-out payment accrued (see Note 19)

$
7,500


$



$
Net assets acquired in conjunction with MTI step acquisition
    (see Note 4)

$



$
95,438


$
8,404Contribution of demand notes payable upon initial public
    offering (see Note 12)

$



$



$
324,230Preferred membership units converted to common stock upon
    initial public offering (see Note 15)

$



$



$
266,089    F-8




---



##### Table of Contents



ev3
    Inc.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    Organization
    and Description of Business    Business
    Combinations 85-5, Issues related to Accounting for Business Combinations
  one-for-six
     F-9




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
    Cash
    Equivalents
    Short-term
    Investments
  available-for-sale.
  Accounts
    Receivable
    Inventories
  first-in,
   F-10




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restricted
    Cash
    Property
    and Equipment
    Goodwill
    Impairment
    of Long-Lived Assets and Amortizable Intangible
    Assets
    Investments
   F-11




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  other-than-temporary,
  Revenue
    Recognition
        Deferred
    Revenue
  No. 00-21 (EITF 00-21), Accounting for Revenue Arrangements with Multiple
    Deliverables
  Shipping
    and Handling Costs
   F-12




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Advertising
    Costs
    Research
    and Development
    Acquired
    In-process Research and Development
    (IPR&D)
    Foreign
    Currency Translation
      Income
    Taxes
     F-13




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Loss
    per Membership Share/Unit
    Comprehensive
    Loss
    Concentrations
    of Credit Risk
        Accounting
    for Stock-Based Compensation
     F-14




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2007

2006

2005ev3 Inc.

ev3 Inc.

ev3 Inc.

MTIRisk free interest rate


4.4%


4.7%


3.8%


4.0%Expected dividend yield


0.0%


0.0%


0.0%


0.0%Expected volatility


43.6%


49.1%


50.0%


56.0%Expected option term


3.85 years


3.75 years


4 years


4 years   96-18,
    Year Ended December 31,2007


2006


2005Stock Based Compensation Charges:Product cost of goods sold

$
926


$
630


$
653Sales, general and administrative


8,832



5,868



3,141Research and development


1,369



655



1,079Total Stock Based Compensation Charges

$
11,127


$
7,153


$
4,873   Fiscal
    Year
    New
    Accounting Pronouncements
   F-15




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      SFAS No. 157-2, SFAS No. 157-2)
    contract-by-contract
  No. 06-3, (EITF 06-3). EITF 06-3
 F-16




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 07-3, (EITF 07-3) EITF 07-3 EITF 07-3
  3.
    Liquidity
    and Capital Resources  one-for-six
  48-month
 F-17




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             F-18




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4.
    Acquisitions  FoxHollow
    Acquisition
      No. 99-12, Determination of the Measurement Date for the Market Price of
    Acquirer Securities Issued in a Purchase Business
    Combination
       F-19




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Expected term (in years)


2.7Expected volatility


45.00
%Risk-free interest rate


4.60
%Stock price on date of grant

$
16.83Weighted-average exercise price

$
14.99       PurchasePriceConsiderationFoxHollow common shares converted

$
725,687Cash consideration


81,811FoxHollow options converted


31,875Total cash and equity

$
839,373Merck consideration


8,824Deal costs


8,718Total purchase price consideration

$
856,915       October 4,2007Intangible assets

$
199,500Acquired in-process research and development


70,700Tangible assets acquired, net of liabilities assumed


156,628Goodwill


430,087Estimated fair value of identifiable tangible and intangible
    assets and goodwill, net of cash acquired and liabilities assumed

$
856,915  F-20




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted AverageFair Value


Amortization PeriodIntangible Asset Description

Assigned


(in years)Developed and core technology

$
138,800


12Customer relationships


40,000


12Merck exclusivity


13,600


3.25Trademarks and tradenames


7,100


10Total intangible assets acquired (excluding goodwill)

$
199,500


11           Assigned


Estimated TotalDevelopment Projects

Fair Value


Cost to CompleteSilverHawk

$
51,200


$
7,300RockHawk


13,700



3,400Support Catheter


2,900



2,300Rinspirator


2,900



4,500Estimated fair value of acquired in-process research and
    development

$
70,700


$
17,500   step-up
 F-21




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  step-up
    Pro Forma
    Results of Operations
      Year Ended December 31,2007


2006Reported


Pro Forma


Reported


Pro FormaNet revenues

$
284,183


$
439,893


$
202,438


$
397,221Net income (loss)

$
(165,744
)

$
(202,337
)

$
(52,371
)

$
(95,059
)Net income (loss) per share:Basic and diluted

$
(2.37
)

$
(1.98
)

$
(0.93
)

$
(1.01
)   MTI Step
    Acquisition
   F-22




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      January 6,2006Fair value of shares/options issued

$
95,438Interest acquired in historical book value of MTI


(12,850
)Excess purchase price over historical book values

$
82,588     January 6,2006Inventory

$
668Developed technology


15,548Customer relationships


9,964Trademarks and tradenames


2,029Acquired in-process research and development


1,786Goodwill


54,605Accrued liabilities


(2,012
)Total

$
82,588      F-23




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              May 26,2005Fair value of shares issued

$
8,404Cash paid


Interest acquired in historical book value of MTI


(2,021
)Excess purchase price over historical book values

$
6,383  F-24




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    May 26,2005Inventory

$
104Developed technology


2,043Customer relationships


894Trademarks and tradenames


458Acquired in-process research and development


868Goodwill


2,066Accrued liabilities


(50
)Total

$
6,383         5.
    Restructuring  EITF 95-3,
 F-25




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    EITF 95-3,
    Purchase Price


ev3 Legacy


Total





Balance atAdjustments


Expensed


Restructuring


Amounts


December 31,(EITF 95-3)


(FAS 112)


Costs


Paid


2007Workforce reductions

$
10,004


$
1,424


$
11,428


$
(2,824
)

$
8,604Termination of contractual commitments


2,476







2,476







2,476Total

$
12,480


$
1,424


$
13,904


$
(2,824
)

$
11,080   6.
    Short-term
    Investments  available-for-sale
  7.
    Inventories    December 31,2007


2006Raw materials

$
18,003


$
7,100Work-in-progress


3,946



3,271Finished goods


53,063



36,47875,012



46,849Inventory reserve


(10,968
)


(4,725
)Inventory, net

$
64,044


$
42,124  F-26




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Property
    and Equipment    December 31,2007


2006Machinery and equipment

$
27,405


$
20,472Office furniture and equipment


16,897



11,440Leasehold improvements


14,656



9,750Construction in progress


6,957



2,04065,915



43,702Less:Accumulated depreciation and amortization


(27,930
)


(19,630
)Property and equipment, net

$
37,985


$
24,072     9.
    Goodwill
    and Other Intangible Assets    Peripheral


Neuro-Vascular


vascular


TotalBalance as of January 1, 2006

$
71,307


$
23,149


$
94,456Goodwill related to acquisition of MTI common stock






54,605



54,605Balance as of December 31, 2006


71,307



77,754



149,061Contingent consideration related to acquisition milestone






7,500



7,500Goodwill related to acquisition of FoxHollow


430,087







430,087Balance as of December 31, 2007

$
501,394


$
85,254


$
586,648     December 31,Weighted


2007


2006Average


Gross





Net


Gross





NetUseful Life


Carrying


Accumulated


Carrying


Carrying


Accumulated


Carrying(in years)


Amount


Amortization


Amount


Amount


Amortization


AmountPatents and licenses


5.0


$
13,802


$
(4,890
)

$
8,912


$
11,435


$
(4,009
)

$
7,426Developed technology


10.0



202,416



(50,213
)


152,203



63,616



(40,119
)


23,497Trademarks and tradenames


9.0



12,222



(3,454
)


8,768



5,122



(2,634
)


2,488Customer relationships


10.0



56,094



(13,094
)


43,000



16,094



(9,491
)


6,603Distribution rights


2.5



9,274



(3,710
)


5,564











Merck exclusivity


3.3



13,600



(1,047
)


12,553











Other intangible assets





$
307,408


$
(76,408
)

$
231,000


$
96,267


$
(56,253
)

$
40,014  F-27




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008

$
31,2902009


26,7042010


23,6952011


18,1042012


18,047   10.
    Investments    11.
    Accrued
    Liabilities    December 312007


2006Accrued professional services

$
3,016


$
1,900Accrued clinical studies


1,814



359Accrued litigation


16,054



1,301Dendron earn-out payment


7,500



Tax liabilities


1,491



1,152Accrued royalties


2,062



845Deferred rent


2,368



409Accrued other


15,124



4,136Total accrued liabilities

$
49,429


$
10,102  F-28




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    Long-Term
    Debt    December 31,2007


2006Equipment term loan

$
10,000


$
7,500Less: current portion


(3,571
)


(2,143
)Total long-term debt

$
6,429


$
5,357   48-month
    2008

$
3,5712009


3,5712010


2,5002011


358Total

$
10,000   Endovascular
    Notes Payable
   F-29




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    Gain
    (Loss) on Sale of Assets    14.
    Interest
    (Income) / Expense    2007


2006


2005Interest income

$
(3,284
)

$
(2,469
)

$
(2,475
)Interest expense


1,374



774



12,391Interest (income) / expense

$
(1,910
)

$
(1,695
)

$
9,916   15.
    Members
    Equity and Redeemable Convertible Preferred Membership
    Units    Redeemable
    Convertible Preferred Membership Units
    1-for-6
 F-30




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    16.
    Equity
    Based Compensation Plans           F-31




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted-AverageAwarded


Exercise


AggregateShares


Price


IntrinsicOutstanding


per Share


ValueBalance at January 1, 2007


5,359,248


$
12.47


$
26,863FoxHollow options converted to ev3 options as a result of the
    acquisition


6,351,497


$
15.48Granted:Options to purchase common stock


2,690,322


$
16.90Exercised


(664,178
)

$
10.13Forfeited


(1,434,019
)

$
15.50Expired


(251,309
)

$
18.81Balance at December 31, 2007


12,051,561


$
14.68


$
10,981Options exercisable at December 31, 2007


6,478,366


$
13.83


$
9,761     Year Ended December 31,2007


2006


2005ev3 Inc.


ev3 Inc.


ev3 Inc.


MTIWeighted average grant date fair value of options issued:At market

$
6.55


$
7.11


$
6.05


$
1.95Below market

$



$



$
5.05


$
1.86      F-32




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##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  :
  Options Outstanding


Options ExercisableWeighted-


Weighted-





Weighted-Average


Average





AverageExercise Price per

Number


per Share


Remaining


Number


Exercise PriceShare

Outstanding


Exercise Price


Contractual Life


Exercisable


per Share$ 0.20 - $12.71


2,368,193


$
8.07



6.0 years



2,035,961


$
7.92$12.90 - $14.00


3,460,267


$
13.39



8.6 years



1,844,237


$
13.38$14.23 - $16.75


2,722,059


$
16.11



9.0 years



695,914


$
15.84$16.78 - $18.76


2,270,761


$
17.59



8.3 years



1,020,642


$
17.50$18.91 - $96.06


1,230,281


$
22.44



7.4 years



881,612


$
22.5712,051,561


$
14.68



8.0 years



6,478,366


$
13.83     Awarded


Weighted-AverageShares


Grant DateOutstanding


Fair ValueNonvested balance at January 1, 2007


217,774


$
15.42FoxHollow restricted stock awards converted to ev3 awards as a
    result of the acquisition


254,166


$
16.64Granted:Restricted stock awards


1,302,299


$
17.00Vested


(282,138
)

$
16.72Forfeited


(199,136
)

$
16.88Nonvested balance at December 31, 2007


1,292,965


$
16.73       17.
    Defined
    Contribution Plans   F-33




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    18.
    Income
    Taxes    For the Years Ended December 31,2007


2006


2005U.S. Federal statutory tax rate


(35.0
)%


(35.0
)%


(34.0
)%Change in valuation allowance


20.2
%


39.6
%


35.9
%Acquired in-process research and development


15.1
%


1.2
%


0.3
%Foreign income taxes


0.6
%


0.9
%


3.1
%Meals and entertainment


0.3
%


0.6
%


0.3
%State income taxes


(0.1
)%


(3.0
)%


(5.4
)%Other, net


(0.5
)%


(3.0
)%


0.5
%Effective tax rate


0.6
%


1.3
%


0.7
%     For the Years Ended December 31,2007


2006


2005Current:U.S.

$



$



$
Foreign


949



688



525Total Current


949



688



525Deferred:










Total tax provision

$
949


$
688


$
525  F-34




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##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006Deferred Tax Assets:Net operating loss carryforwards

$
214,569


$
170,428Capitalized research & development costs


24,477



16,588Other reserves and accruals


12,145



2,792Inventories


8,840



1,794Tax credit carryforwards


4,180



5,182Deferred revenue


3,593



Unrealized losses on investments


3,177



3,135Property and equipment


3,046



709Other


5,184



3,095Valuation allowance


(199,040
)


(191,960
)Total Deferred Tax Assets

$
80,171


$
11,763Deferred Tax Liabilities:Intangible assets


(80,171
)


(11,763
)Net deferred tax asset (liability)

$



$
           Gross unrecognized tax benefits at January 1, 2007

$
4,656Current year acquisition


3,223Increase for tax positions in prior years


1,648Decrease for tax positions in prior years


(804
)Settlements


(163
)Increase for tax positions in current years


870Gross unrecognized tax benefits at December 31, 2007

$
9,430  F-35




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##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          CarryforwardU.S.


Foreign


Total


Expiration Period$
27,060


$
17,358


$
44,418



2008 - 2018122,798







122,798



2019 - 2022382,270







382,270



2023 - 2027



30,005



30,005



No expiration date$
532,128


$
47,363


$
579,491        F-36




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##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    19.
    Commitments
    and Contingencies  Operating
    Leases
      Years ending December 31:2008

$
6,4562009


5,7642010


3,9632011


2,4742012


1,435Thereafter


6,503$
26,595       Purchase
    Obligations
     F-37




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    sign-up sign-up
    Letters
    of Credit
    Financed
    Insurance Policies
   F-38




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Earn-Out
    Contingencies
    License
    Agreements
    Contingencies
    Global
    Coil Patent Litigation
     F-39




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##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Embolic
    Protection Patent Litigation
      Appriva
    Medical, Inc. Acquisition Litigation
   F-40




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      FoxHollow
    Litigation
       F-41




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          20.
    Segment
    and Geographic Information       F-42




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Years Ended December 31,2007


2006


2005Net sales Peripheral VascularAtherectomy

$
20,884


$



$
Stents


86,035



64,092



37,871Thrombectomy and embolic protection


25,998



21,606



12,869Procedural support and other


40,858



35,406



29,141Total Peripheral Vascular


173,775



121,104



79,881NeurovascularEmbolic products


56,003



38,998



22,463Neuro access and delivery products


48,448



42,336



31,352Total Neurovascular


104,451



81,334



53,815Research collaboration


5,957







Total net sales

$
284,183


$
202,438


$
133,696Gross profitPeripheral Vascular

$
100,693


$
68,933


$
41,329Neurovascular


77,654



62,184



37,273Research collaboration


4,892







Total

$
183,239


$
131,117


$
78,602Total assetsPeripheral Vascular

$
936,348


$
209,414Neurovascular


150,758



143,412Total

$
1,087,106


$
352,826Gross profit(1)

$
183,239


$
131,117


$
78,602Operating expense


352,762



187,675



181,448Loss from operations

$
(169,523
)

$
(56,558
)

$
(102,846
)     (1)
    
    Gross profit for internal measurement purposes is defined as net
    sales less cost of goods sold excluding amortization of
    intangible assets.   F-43




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,Geographic Data

2007


2006


2005Net SalesUnited States

$
177,198


$
121,180


$
71,848International


106,985



81,258



61,848Total net sales

$
284,183


$
202,438


$
133,696Long-lived AssetsUnited States

$
37,015


$
23,422International


970



650Total long-lived assets

$
37,985


$
24,072   21.
    Related
    Party Transaction       F-44




---



##### Table of Contents



ev3
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  22.
    Loss Per
    Share    Year Ended December 31,2007


2006


2005Options


12,051,561



5,359,248



3,638,309   23.
    Quarterly
    Financial Data (Unaudited)  Loss from



Loss perNet Sales

Operations

Net Loss

Share2007First Quarter

$
61,499


$
(9,644
)

$
(9,494
)

$
(0.17
)Second Quarter


65,396



(12,031
)


(11,871
)


(0.20
)Third Quarter


65,060



(38,233
)(1)


(36,512
)(1)


(0.60
)Fourth Quarter


92,228
(2)


(109,615
)(3)


(107,867
)(3)


(1.06
)2006First Quarter

$
42,237


$
(25,085
)(4)

$
(24,501
)(4)

$
(0.44
)Second Quarter


50,620



(13,650
)


(10,823
)


(0.19
)Third Quarter


51,906



(12,795
)


(12,467
)


(0.22
)Fourth Quarter


57,675



(5,028
)


(4,580
)


(0.08
)     (1)
    
    In third quarter of 2007, we incurred special charges of
    $19.1 million as a result of us entering into agreements in
    principle to settle certain patent infringement and other
    litigation with The Regents of the University of California and
    Boston Scientific Corporation. For additional discussion see
    Note 19 above.(2)
    
    In October 2007, we completed our acquisition of FoxHollow,
    which broadened our peripheral vascular product offering to
    include atherectomy and additional thrombectomy products,
    including the SilverHawk Plaque Excision System. Our fourth
    quarter net sales included $20.9 million of net sales from
    FoxHollow products. As a result of our FoxHollow acquisition, we
    also now recognize research collaboration revenue from our
    collaboration and license agreement with Merck. Research
    collaboration revenue for fourth quarter 2007 was
    $6.0 million.(3)
    
    In the fourth quarter of 2007, we recorded a charge of
    $70.7 million for acquired in-process research and
    development as a result of the acquisition of FoxHollow on
    October 4, 2007. For additional discussion see Note 4
    above. We also made approximately $3.3 million of
    adjustments in our excess and obsolete inventory reserves for
    the planned discontinuance of the Primus balloon expandable
    stent and the Sailor .035 balloon due to our strategic marketing
    focus on new product introductions.(4)
    
    In the first quarter of 2006, we recorded a charge of
    $1.8 million for acquired in-process research and
    development related to our acquisition of MTI on January 6,
    2006 and $4.4 million of litigation and business
    development charges. F-45




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##### Table of Contents



ev3
    Inc.
 Schedule II



Valuation
    and Qualifying Accounts  Charged toBalance at


Revenue,Beginning


Costs or


Other



Balance atDescription

Period


Expenses


Additions

Deductions

End of PeriodReserves deducted from assets to which it applies:Year ended December 31, 2007Reserve for deferred income tax asset

$
191,960


$
34,273


$



$
(27,193
)(b)

$
199,040Accounts receivable allowances


3,924



2,024



1,661
(a)


(826
)


6,783Reserve for inventory obsolescence


4,725



9,018



1,513
(a)


(4,288
)


10,968Year ended December 31, 2006Reserve for deferred income tax asset

$
176,142


$
15,818


$



$



$
191,960Accounts receivable allowances


3,607



746







(429
)


3,924Reserve for inventory obsolescence


3,975



3,725







(2,975
)


4,725Year ended December 31, 2005Reserve for deferred income tax asset

$
144,261


$
31,881


$



$



$
176,142Accounts receivable allowances


2,694



1,110







(197
)


3,607Reserve for inventory obsolescence


3,687



4,037







(3,749
)


3,975     (a)
    
    Other additions primarily related to acquisitions.(b)
    
    Other deductions primarily related to acquisitions. F-46




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Form 10-K.
  Managements
    Report on Internal Control Over Financial Reporting
      Change in
    Internal Control Over Financial Reporting
   88




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##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Directors
  Form 10-K
  Executive
    Officers
  Form 10-K
  Section 16(a)
    Beneficial Ownership Reporting Compliance
  Form 10-K
  Code of
    Conduct and Ethics
  Form 10-K
  Changes
    to Nomination Procedures
    Audit
    Committee Matters
  Form 10-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Form 10-K
 89




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##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    (a)

(b)

(c)Number ofSecuritiesRemaining AvailableNumber of



for Future IssuanceSecurities to be

Weighted-Average

Under EquityIssued Upon

Exercise Price of

Compensation PlansExercise of

Outstanding

(ExcludingOutstanding

Options,

SecuritiesOptions, Warrants

Warrants and

Reflected inPlan Category

and Rights

Rights

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


6,995,711
(1)(2)


12.17
(3)


5,759,678
(4)Equity compensation plans not approved by security holders


0
(5)(6)


N/A



0Total


6,995,711



12.17



5,759,678     (1)
    
    Amount includes shares of our common stock issuable upon the
    exercise of stock options outstanding as of December 31,
    2007 under the ev3 Inc. Second Amended and Restated 2005
    Incentive Stock Plan and the ev3 LLC Amended and Restated 2003
    Incentive Plan and shares of our common stock issuable upon the
    vesting of restricted stock units outstanding as of
    December 31, 2007 under the ev3 Inc. Second Amended and
    Restated 2005 Incentive Stock Plan.(2)
    
    Excludes employee stock purchase rights accruing under the ev3
    Inc. Employee Stock Purchase Plan. Under such plan, each
    eligible employee may purchase up to 2,500 shares of our
    common stock at semi-annual intervals on June 30th and
    December 31st each year at a purchase price per share equal
    to 85% of the lower of (i) the closing sales price per
    share of our common stock on the first day of the offering
    period or (ii) the closing sales price per share of our
    common stock on the last day of the offering period.(3)
    
    Included in the weighted-average exercise price calculation are
    1,177,334 restricted stock units with an exercise price of
    $0.00. The weighted-average exercise price of all outstanding
    stock options as of December 31, 2007 and reflected in
    column (a) was $14.62.(4)
    
    Amount includes 5,070,212 shares remaining available at
    December 31, 2007 for future issuance under the ev3 Inc.
    Second Amended and Restated 2005 Incentive Stock Plan and
    689,466 shares remaining available at December 31,
    2007 for future issuance under the ev3 Inc. Employee Stock
    Purchase Plan. No shares remain available for grant under the
    ev3 LLC Amended and Restated 2003 Incentive Plan since such plan
    was terminated with respect to future grants in June 2005.(5)
    
    Excludes options assumed by us in connection with our
    acquisitions of Micro Therapeutics, Inc. and FoxHollow
    Technologies, Inc. As of December 31, 2007, a total of
    6,233,184 shares of our common stock were issuable upon
    exercise of the assumed options. The weighted average exercise
    price of the outstanding assumed options as of such date was
    $14.73 per share and they have an average weighted life
    remaining of 7.84 years. 946,638 of the 1,057,646 options
    outstanding in connection with our acquisition of Micro
    Therapeutics, Inc. were exercisable as of December 31,
    2007. 3,136,631 of the 5,291,169 options assumed and outstanding
    in connection with our acquisition of FoxHollow Technologies,
    Inc. were exercisable as of December 31, 2007. No
    additional options, restricted stock units or other equity
    incentive awards may be granted under the assumed Micro
    Therapeutics, Inc. and FoxHollow Technologies, Inc. plans.(6)
    
    Excludes shares issuable upon the vesting of restricted stock
    units assumed by us in connection with our acquisition of
    FoxHollow Technologies, Inc. As of December 31, 2007, a
    total of 115,631 shares of our common stock were issuable
    upon the vesting of the assumed restricted stock units. 90




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##### Table of Contents



Stock
    Ownership
  Form 10-K
  ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Form 10-K
  ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Form 10-K
 PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES      th
  Form 10-K
  Form S-1 No. 333-123851)).
  Form S-1 No. 333-123851)).
  Form S-1 No. 333-123851)).
 91




---



##### Table of Contents



Form 10-Q No. 000-51348)).
  Form 10-Q No. 000-51348)).
  Form S-1 No. 333-123851)).
  Form 10-Q No. 000-51348)).
  Form 10-Q No. 000-51348)).
  Form 10-Q No. 000-51348)).
    Form 10-K No. 000-50998)).
  Form 10-K 000-50998)).
  Form S-1 No. 333-123851)).
  Form 8-K No. 000-51348)).
  Form 8-K No. 000-51348)).
  Form 8-K 000-51348)).
  Form 8-K No. 000-51348)).
  Form 10-Q No. 000-51348)).
 92




---



##### Table of Contents



Form 10-KSB No. 000-06523)).
  Form SB-2 No. 333-17345)).
  Form 10-K No. 000-51348)).
    Form S-1 No. 333-118191))
  S-1 No. 333-118191))
 93




---



##### Table of Contents



SIGNATURES
    ev3 INC.
   By
    /s/  James
    M. Corbett  James M. Corbett
 Chairman, President and Chief Executive Officer (principal
    executive officer)
  By
    /s/  Patrick
    D. Spangler   Senior Vice President and Chief Financial Officer
 (principal financing and accounting officer)
     Name and Signature

Title

Date/s/  James
    M. CorbettJames
    M. Corbett

Chairman, President and 
    Chief Executive Officer

March 13, 2008/s/  John
    K. BakewellJohn
    K. Bakewell

Director

March 13, 2008/s/  Jeffrey
    B. ChildJeffrey
    B. Child

Director

March 13, 2008/s/  Richard
    B. EmmittRichard
    B. Emmitt

Director

March 13, 2008/s/  Richard
    N. KenderRichard
    N. Kender

Director

March 13, 2008/s/  Daniel
    J. LevangieDaniel
    J. Levangie

Director

March 13, 2008/s/  Myrtle
    S. PotterMyrtle
    S. Potter

Director

March 13, 2008/s/  Thomas
    E. TimbieThomas
    E. Timbie

Director

March 13, 2008/s/  Elizabeth
    H. WeathermanElizabeth
    H. Weatherman

Director

March 13, 2008  94




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##### Table of Contents



ev3
    INC.
  EXHIBIT INDEX
    TO ANNUAL REPORT ON
    FORM 10-K
    For the Year Ended December 31, 2007
  ExhibitNo.

Exhibit

Method of Filing2
.1

Agreement and Plan of Merger, dated as of April 4, 2005, by and
    between ev3 LLC and ev3 Inc.

Incorporated by reference to Exhibit 2.1 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)2
.2

Contribution and Exchange Agreement, dated as of April 4, 2005,
    by and among the institutional stockholders listed on Schedule I
    thereto, ev3 LLC, ev3 Inc. and Micro Therapeutics, Inc.

Incorporated by reference to Exhibit 2.2 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)2
.3

Note Contribution and Exchange Agreement, dated as of April 4,
    2005, by and among the noteholders listed on Schedule I thereto
    and ev3 Inc.

Incorporated by reference to Exhibit 2.3 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)2
.4

Agreement and Plan of Merger, dated as of July 15, 2002, by and
    among Microvena Corporation, Appriva Acquisition Corp. and
    Appriva Medical, Inc.

Incorporated by reference to Exhibit 2.4 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)2
.5

Asset Purchase Agreement, dated as of September 29, 2004, among
    Edwards Lifesciences AG and ev3 Santa Rosa, Inc., ev3
    Technologies, Inc. and ev3 Endovascular, Inc. (formerly known as
    ev3 Inc.)(1)

Incorporated by reference to Exhibit 2.5 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)2
.6

Stock Purchase Agreement, dated September 3, 2002, by and
    between Micro Therapeutics, Inc. and the holders of the
    outstanding equity securities of Dendron

Incorporated by reference to Exhibit 2.2 to Micro Therapeutics,
    Inc.s Current Report on Form 8-K filed with the Securities
    and Exchange Commission on October 10, 2002 (File No. 000-06523)2
.7

Agreement and Plan of Merger, dated November 14, 2005, by and
    between ev3 Inc., Micro Investment, LLC and Micro Therapeutics,
    Inc.

Incorporated by reference to Exhibit 2.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on November 14, 2005 (File No. 000-51348)2
.8

Agreement and Plan of Merger dated as of July 21, 2007 by and
    among ev3 Inc., Foreigner Merger Sub, Inc. and FoxHollow
    Technologies, Inc.(2)

Incorporated by reference to Exhibit 2.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on July 23, 2007 (File No. 000-51348)2
.9

Agreement and Plan of Merger, dated as of August 26, 2006, by
    and between FoxHollow Technologies, Inc. and Kerberos Proximal
    Solutions, Inc.

Incorporated by reference to Exhibit 2.1 to FoxHollows
    Current Report on Form 8-K filed with the Securities and
    Exchange Commission on August 28, 2006 (File No. 000-50998)3
.1

Amended and Restated Certificate of Incorporation of ev3 Inc.

Incorporated by reference to Exhibit 3.1 to ev3s Amendment
    No. 5 to Registration Statement on Form S-1 filed with the
    Securities and Exchange Commission on June 14, 2005 (File No.
    333-123851)3
.2

Amendment to Amended and Restated Certificate of Incorporation
    of ev3 Inc.

Incorporated by reference to Exhibit 99.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on June 27, 2005 (File No. 000-51348) 95




---



##### Table of Contents



ExhibitNo.

Exhibit

Method of Filing3
.3

Amendment to Amended and Restated Certificate of Incorporation
    of ev3 Inc.

Incorporated by reference to Exhibit 3.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on July 23, 2007 (File No. 000-51348)3
.4

Amended and Restated Bylaws of ev3 Inc.

Incorporated by reference to Exhibit 3.3 to ev3s Quarterly
    Report on Form 10-Q for the fiscal quarter ended July 3, 2005
    (File No. 000-51348)4
.1

Form of Stock Certificate

Incorporated by reference to Exhibit 4.1 to ev3s Amendment
    No. 4 to Registration Statement on Form S-1 filed with the
    Securities and Exchange Commission on June 2, 2005 (File No.
    333-123851)4
.2

Holders Agreement, dated as of August 29, 2003, among the
    institutional investors listed on Schedule I thereto, Dale A.
    Spencer, Paul Buckman, the individuals whose names and addresses
    appear from time to time on Schedule II thereto, the
    individuals whose names and addresses appear from time to time
    on Schedule III thereto and ev3 LLC

Incorporated by reference to Exhibit 4.2 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)4
.3

Operating Agreement of ev3 LLC, dated as of August 29, 2003, by
    and among ev3 LLC, Warburg, Pincus Equity Partners, L.P.,
    Warburg, Pincus Netherlands Equity Partners I, C.V.,
    Warburg, Pincus Netherlands Equity Partners II, C.V., Warburg,
    Pincus Netherlands Equity Partners III, C.V., Vertical
    Fund I, L.P., Vertical Fund II, L.P. and certain other
    persons party thereto

Incorporated by reference to Exhibit 4.3 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)4
.4

Amendment No. 1 to Operating Agreement of ev3 LLC, dated as of
    March 1, 2005, by and among ev3 LLC, Warburg, Pincus Equity
    Partners, L.P., Warburg, Pincus Netherlands Equity
    Partners I, C.V., Warburg, Pincus Netherlands Equity
    Partners II, C.V., Warburg, Pincus Netherlands Equity Partners
    III, C.V., Vertical Fund I, L.P., Vertical Fund II, L.P.
    and certain other persons party thereto

Incorporated by reference to Exhibit 4.4 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)4
.5

Registration Rights Agreement, dated as of June 21, 2005, by and
    among ev3 Inc., Warburg, Pincus Equity Partners, L.P., Warburg,
    Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus
    Netherlands Equity Partners II, C.V., Warburg, Pincus
    Netherlands Equity Partners III, C.V., Vertical Fund I,
    L.P., Vertical Fund II, L.P. and certain other investors party
    thereto

Incorporated by reference to Exhibit 4.2 to ev3s Quarterly
    Report on Form 10-Q for the fiscal quarter ended July 3, 2005
    (File No. 000-51348)4
.6

Stock Purchase Agreement, dated as of September 26, 2006,
    between FoxHollow Technologies, Inc. and Merck & Co., Inc.

Incorporated by reference to Exhibit 4.3 to FoxHollows
    Current Report on Form 8-K filed with the Securities and
    Exchange Commission on September 28, 2006  (File No. 000-50998) 96




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ExhibitNo.

Exhibit

Method of Filing10
.1

Lease Agreement, dated May 3, 2002, by and between Liberty
    Property Limited Partnership and ev3 Endovascular, Inc.
    (formerly known as ev3 Inc.)

Incorporated by reference to Exhibit 10.1 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.2

First Amendment to the May 3, 2002 Lease Agreement between
    Liberty Property Limited Partnership and ev3 Endovascular, Inc.
    (formerly known as ev3 Inc.), effective as of October 17, 2005

Incorporated by reference to Exhibit 10.2 to ev3s Annual
    Report on Form 10-K for the fiscal year ended December 31, 2006
    (File No. 000-51348)10
.3

Second Amendment to the May 3, 2002 Lease Agreement between
    Liberty Property Limited Partnership and ev3 Endovascular, Inc.
    (formerly known as ev3 Inc.), effective as of October 1, 2005

Incorporated by reference to Exhibit 10.3 to ev3s Annual
    Report on Form 10-K for the fiscal year ended December 31, 2006
    (File No. 000-51348)10
.4

Lease Agreement dated August 30, 2005 between Liberty Property
    Limited Partnership and ev3 Inc.

Incorporated by reference to Exhibit 10.2 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    October 2, 2005 (File No. 000-51348)10
.5

First Amendment to the August 30, 2005 Lease Agreement between
    Liberty Property Limited Partnership and ev3 Inc., effective as
    of April 6, 2006

Incorporated by reference to Exhibit 10.5 to ev3s Annual
    Report on Form 10-K for the fiscal year ended December 31, 2006
    (File No. 000-51348)10
.6

Second Amendment to the August 30, 2005 Lease Agreement, between
    Liberty Property Limited Partnership and ev3 Inc., effective as
    of February 8, 2007

Incorporated by reference to Exhibit 10.6 to ev3s Annual
    Report on Form 10-K for the fiscal year ended December 31, 2006
    (File No. 000-51348)10
.7

Lease, dated October 13, 2005, by and between Micro
    Therapeutics, Inc. and The Irvine Company

Incorporated by reference to Exhibit 10.53 to Micro
    Therapeutics, Inc.s Current Report on Form 8-K filed with
    the Securities and Exchange Commission on October 18, 2005 (File
    No. 000-06523)10
.8

Office Building Lease, dated May 3, 2004, by and between
    FoxHollow Technologies, Inc. and Woodside Technology Center, LLC
    for office space located at 740 Bay Road, Redwood City,
    California

Incorporated by reference to Exhibit 10.10 to FoxHollows
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on August 13, 2004 (Registration No.
    333-118191)10
.9

Office Building Lease, dated November 3, 2006, by and between
    FoxHollow Technologies, Inc. and Slough Redwood City, LLC, for
    office space located at 900 Chesapeake Drive, Redwood City,
    California

Incorporated by reference to Exhibit 10.23 to FoxHollows
    Current Report on Form 8-K filed with the Securities and
    Exchange Commission on November 14, 2006 (File No. 000-50998)10
.10

Office Building Lease, dated January 5, 2007, by and between
    FoxHollow Technologies, Inc. and AMB Property, L.P., for office
    space located at 1105 Hamilton Court, Menlo Park, California

Incorporated by reference to Exhibit 10.26 to FoxHollows
    Annual Report on Form 10-K for the year ended December 31, 2006
    (File No. 000-50998)10
.11

Employee Confidentiality/Restrictive Covenant Agreement, dated
    as of May 20, 2003, between ev3 Endovascular, Inc. (formerly
    known as ev3 Inc.) and James M. Corbett

Incorporated by reference to Exhibit 10.4 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851) 97




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##### Table of Contents



ExhibitNo.

Exhibit

Method of Filing10
.12

Employee Confidentiality/Restrictive Covenant Agreement, dated
    as of March 21, 2005, between ev3 Endovascular, Inc. and Patrick
    D. Spangler

Incorporated by reference to Exhibit 10.6 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.13

Employment Offer Letter, dated as of March 31, 2005, between ev3
    LLC, ev3 Inc. and Patrick D. Spangler

Incorporated by reference to Exhibit 10.53 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.14

Offer Letter, dated April 3, 2006, between ev3 Inc. and Matthew
    Jenusaitis

Incorporated by reference to Exhibit 10.4 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended July
    2, 2006 (File No. 000-51348)10
.15

Employment Agreement, dated April 3, 2006, between ev3 Inc. and
    Matthew Jenusaitis

Incorporated by reference to Exhibit 10.5 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended July
    2, 2006
    (File No. 000-51348)10
.16

Consulting Agreement, dated as of November 22, 2004, by and
    between ev3 Endovascular, Inc. (formerly known as ev3 Inc.) and
    Dale A. Spencer

Incorporated by reference to Exhibit 10.10 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.17

Change in Control Agreement, dated September 19, 2006, among ev3
    Inc., ev3 Endovascular, Inc. and James M. Corbett

Incorporated by reference to Exhibit 10.2 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    October 1, 2006 (File No. 000-51348)10
.18

Change in Control Agreement, dated September 19, 2006, among ev3
    Inc., ev3 Endovascular, Inc. and Dale A. Spencer

Incorporated by reference to Exhibit 10.1 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    October 1, 2006 (File No. 000-51348)10
.19

Change in Control and Severance Agreement, dated April 9,
    2007, by and between John B. Simpson, Ph.D., M.D. and Fox Hollow
    Technologies, Inc.

Filed herewith10
.20

Form of Change in Control Agreement among ev3 Inc., ev3
    Endovascular, Inc. or Micro Therapeutics, Inc. and each of its
    executive officers

Incorporated by reference to Exhibit 10.3 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    October 1, 2006 (File No. 000-51348)10
.21

Form of Indemnification Agreement for directors and officers of
    ev3 Inc.

Incorporated by reference to Exhibit 10.15 to ev3s
    Amendment No. 4 to Registration Statement on Form S-1 filed with
    the Securities and Exchange Commission on June 2, 2005 (File No.
    333-123851)10
.22

ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan

Incorporated by reference to Exhibit 10.1 to ev3s Current
    Report on Form 8-K as filed with the Securities and Exchange
    Commission on May 17, 2007 (File No. 000-51348)10
.23

Form of ev3 Inc. Second Amended and Restated 2005 Incentive
    Stock Plan Option Certificate

Incorporated by reference to Exhibit 10.2 to ev3s Current
    Report on Form 8-K as filed with the Securities and Exchange
    Commission on January 26, 2007 (File No. 000-51348) 98




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##### Table of Contents



ExhibitNo.

Exhibit

Method of Filing10
.24

Form of Stock Grant Certificate under ev3 Inc. Second Amended
    and Restated 2005 Incentive Stock Plan

Incorporated by reference to Exhibit 10.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on January 26, 2007 (File No. 000-51348)10
.25

Form of Stock Grant Notice under ev3 Inc. Amended and Restated
    2005 Incentive Stock Plan applicable to French Participants

Incorporated by reference to Exhibit 10.1 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on January 31, 2006 (File No. 000-51348)10
.26

ev3 LLC Amended and Restated 2003 Incentive Plan, as amended

Incorporated by reference to Exhibit 10.2 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended July
    2, 2006
    (File No. 000-51348)10
.27

Micro Therapeutics, Inc. 1996 Stock Incentive Plan, as amended

Incorporated by reference to Exhibit 10.7.1 to Micro
    Therapeutics, Inc.s Annual Report on Form 10-KSB for the
    fiscal year ended December 31, 2002 (File No. 000-06523)10
.28

Micro Therapeutics, Inc. 1993 Incentive Stock Option,
    Nonqualified Stock Option and Restricted Stock Purchase Plan

Incorporated by reference to Exhibit 10.6 to Micro Therapeutics,
    Inc.s Registration Statement on Form SB-2 filed with the
    Securities and Exchange Commission on December 5, 1996 (File No.
    333-17345)10
.29

ev3 Inc. Employee Stock Purchase Plan

Incorporated by reference to Exhibit 10.24 to ev3s Annual
    Report on Form 10-K for the fiscal year ended December 31, 2005
    (File No. 000-51348)10
.30

ev3 Inc. Executive Performance Incentive Plan

Filed herewith10
.31

FoxHollow Technologies, Inc. 2004 Equity Incentive Plan

Incorporated by reference to Exhibit 10.3 to FoxHollows
    Amendment No. 2  to Registration Statement on Form S-1 filed
    with the Securities and Exchange Commission on October 13, 2004
    (Registration
    No. 333-118191)10
.32

Form of FoxHollow Technologies, Inc. 2004 Equity Incentive Plan
    Stock Option Award Agreement

Incorporated by reference to Exhibit 99.4 to John B.
    Simpsons Schedule 13D filed with the Securities and
    Exchange Commission on October 15, 2007 (File No. 005-80819)10
.33

FoxHollow Technologies, Inc. 1997 Stock Plan

Incorporated by reference to Exhibit 10.2 to FoxHollows
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on August 13, 2004
    (Registration No. 333-118191)10
.34

Form of Subscription Agreement between ev3 Endovascular, Inc.
    (formerly known as ev3 Inc.) and Warburg, Pincus Equity
    Partners, L.P., Warburg, Pincus Netherlands Equity
    Partners I, C.V., Warburg, Pincus Netherlands Equity
    Partners II, C.V., Warburg, Pincus Netherlands Equity Partners
    III, C.V., Vertical Fund I, L.P., Vertical Fund II, L.P.

Incorporated by reference to Exhibit 10.33 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.35

Distribution Agreement between Invatec Technology Center GMBH
    and ev3 Endovascular, Inc. dated February 15, 2007(1)

Incorporated by reference to Exhibit 10.2 to ev3s Current
    Report on Form 8-K filed with the Securities and Exchange
    Commission on February 20, 2007 (File No. 000-51348) 99




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ExhibitNo.

Exhibit

Method of Filing10
.36

Loan and Security Agreement, dated as of June 28, 2006, among
    Silicon Valley Bank, ev3 Endovascular, Inc., ev3 International,
    Inc. and Micro Therapeutics, Inc.

Incorporated by reference to Exhibit 10.8 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended July
    2, 2006
    (File No. 000-51348)10
.37

First Amendment to Loan and Security Agreement between Silicon
    Valley Bank and ev3 Endovascular, Inc., ev3 International, Inc.
    and Micro Therapeutics, Inc. dated March 15, 2007

Incorporated by reference to Exhibit 10.1 to ev3s Current
    Report on Form 8-K as filed with the Securities and Exchange
    Commission on March 21, 2007 (File No. 000-51348)10
.38

Consent and Second Amendment to Loan and Security Agreement
    between Silicon Valley Bank and ev3 Endovascular, Inc., ev3
    International, Inc. and Micro Therapeutics, Inc. dated October
    4, 2007

Filed herewith10
.39

Third Amendment to Loan and Security Agreement between Silicon
    Valley Bank and ev3 Endovascular, Inc., ev3 International, Inc.
    and Micro Therapeutics, Inc. dated November 2, 2007

Filed herewith10
.40

Assumption Agreement and Fourth Amendment to Loan and Security
    Agreement between Silicon Valley Bank and ev3 Endovascular,
    Inc., ev3 International, Inc., Micro Therapeutics, Inc., and
    FoxHollow Technologies, Inc. dated December 14, 2007

Filed herewith10
.41

Corporate Opportunity Agreement, dated as of April 4, 2005, by
    and between the institutional stockholders listed on Schedule I
    thereto and ev3 Inc.

Incorporated by reference to Exhibit 10.32 to ev3s
    Registration Statement on Form S-1 filed with the Securities and
    Exchange Commission on April 5, 2005 (File No. 333-123851)10
.42

Underwriting Agreement dated April 19, 2007 among ev3 Inc., the
    Selling Stockholders listed on Schedule B thereto and Banc of
    America Securities LLC, Piper Jaffray & Co., JP Morgan
    Securities Inc., as Representatives of the Several Underwriters

Incorporated by reference to Exhibit 10.1 to ev3s
    Quarterly Report on Form 10-Q for the fiscal quarter ended July
    1, 2007
    (File No. 000-51348)10
.43

Intellectual Property Transfer Agreement dated as of June 15,
    2007 between Atritech, Inc. and ev3 Endovascular, Inc.

Incorporated by reference to Exhibit 10.1 to ev3s Current
    Report on Form 8-K as filed with the Securities and Exchange
    Commission on June 21, 2007 (File No. 000-51348)10
.44

Amended and Restated Collaboration and License Agreement, dated
    as of September 26, 2006, by and between FoxHollow Technologies,
    Inc. and Merck & Co., Inc.(1)

Incorporated by reference to Exhibit 10.22 to FoxHollows
    Quarterly Report on Form 10-Q for the quarter ended September
    30, 2006
    (File No. 000-50998)10
.45

Amendment, Waiver, Consent and Assumption Agreement dated as of
    July 21, 2007 by and among Merck & Co., Inc., FoxHollow
    Technologies, Inc. and ev3 Inc.

Incorporated by reference to Exhibit 10.3 to ev3s
    Quarterly Report on Form 10-Q for the quarter ended September
    30, 2007
    (File No. 000-51348)21
.1

Subsidiaries of ev3 Inc.

Filed herewith23
.1

Consent of Ernst & Young LLP

Filed herewith23
.2

Consent of PricewaterhouseCoopers LLP

Filed herewith31
.1

Certification of Chief Executive Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a)

Filed herewith 100




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ExhibitNo.

Exhibit

Method of Filing31
.2

Certification of Chief Financial Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a)

Filed herewith32
.1

Certification of Chief Executive Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002

Furnished herewith32
.2

Certification of Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002

Furnished herewith     (1)
    
    Confidential treatment under
    Rule 24b-2
    of the Securities Exchange Act of 1934, as amended, has been
    granted with respect to designated portions of this document.(2)
    
    All exhibits and schedules to the Agreement and Plan of Merger
    have been omitted pursuant to Item 601(b)(2) of
    Regulation S-K.
    ev3 will furnish the omitted exhibits and schedules to the
    Securities and Exchange Commission upon request by the
    Commission. 101