Inova Technology Inc. - FORM 10-K/A

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EX-31.2 - Inova Technology Inc.	inva_ex31-2.htm
EX-31.1 - Inova Technology Inc.	inva_ex31-1.htm
EX-32.1 - Inova Technology Inc.	inva_ex32-1.htm
EX-32.2 - Inova Technology Inc.	inva_ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K/A

x ANNUAL REPORT UNDER SECTION 13 OR 15 (D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended

April 30, 2008

Commission File # 000-27397

INOVA TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

98-0204280

(IRS Employer Identification Number)

233 Wilshire Boulevard, Suite 400, Santa Monica, California 90401

(Address of principal executive offices)(Zip Code)

800-757-9808

(Registrant's telephone no., including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $0.001 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x Noo

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Revenues for year ended April 30, 2008: $5,442,402

Number of shares of the registrant's common stock outstanding as of August 1, 2008 was: 47,845,585.

DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (Check one): Yes x ; No o

This filing amends our Annual Report on Form 10-KSB for the year ended April 30, 2008, previously filed on August 13, 2008. Specifically,

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants
(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for a previously unrecorded liability and common stock issuance
(4) To record additional net loss as a result items above
(5) To record issuance of common stock previously unrecorded

Inova Technology Inc.

Form 10-KSB

TABLE OF CONTENTS

PART I
Item 1.	Description of Business	1
Item 2.	Description of Property	1
Item 3.	Legal Proceedings	2
Item 4.	Submission of Matters to a Vote of Security Holders	2

PART II
Item 5.	Market for Common Equity and Related Stockholder Matters	2
Item 6.	Management’s Discussion and Analysis or Plan of Operations	2
Item 7.	Financial Statements	4
Item 8.	Controls and Procedures	27

PART III
Item 9.	Directors, Executive Officers, Promoters and Control Persons;	29
Item 10.	Executive Compensation	30
Item 11.	Security Ownership of Certain Beneficial Owners and Management	31
Item 12.	Certain Relationships and Related Transactions	32
Item 13.	Exhibits	32
Item 14.	Principal Accountant Fees and Services	32

iii

PART I

Item 1 Description of Business

Organization and History of the Company

Inova Technology Inc. (the “Company”) was incorporated in Nevada in 1997, as Newsgurus.com, Inc. The company changed its name to Secure Enterprise Solutions Inc. in 2002, then to Edgetech Services Inc. In 2007, the Company assumed its present name of Inova Technology, Inc.

In 2005, Edgetech entered into an agreement with the shareholders of Web’s Biggest, Inc., Mr. Xavier Roy of Los Angeles, California, and Advisors LLC, (collectively, “Web’s Biggest”) which resulted in Edgetech issuing 25,000,000 convertible preferred shares to the shareholders of Web’s Biggest in consideration for 100% of the outstanding capital of Web’s Biggest and $250,000 be used for general working capital of Edgetech.

In 2006, Edgetech bought certain assets of Data Management, Inc., a Nevada corporation in exchange for 1,250,000 convertible preferred shares. The convertible shares used to acquire it represented approximately 90% of the voting stock of Edgetech on a fully diluted basis. Concurrently, Edgetech sold its wholly-owned subsidiary, Web’s Biggest Limited, to Advisors LLC in exchange for 1,250,000 convertible preferred shares of Edgetech Services, Inc. held by Advisors LLC. The 1,250,000 convertible preferred shares given to buy Data Management were the same 1,250,000 convertible preferred shares received from the sale of Web’s Biggest.

Prior to these transactions described above, the Company was controlled by Advisors LLC, an entity related to Mr. Paul Aunger, an officer and director of the registrant. When the transactions described above were completed, this resulted in a change of control of the Company and the controlling shareholder became Southbase International Ltd., an entity related to Mr. Adam Radly, an officer and director of the Company. Prior to these transactions, the unaffiliated shareholders of the Company owned approximately 10% of the Registrant and they continued to own approximately 10% of the Company on a fully diluted basis.

On May 1, 2007, Inova also acquired RightTag Inc., a manufacturer of radio frequency identification (“RFID”) products.

On December 21, 2007, Inova acquired Texas-based Desert Communications (“Desert”) for $5.9 million ($3.3 million paid in cash and $2.6 million to be paid under notes payable).

Description of the Company’s Business

Inova is a technology holding company. Inova has four subsidiaries. These subsidiaries and their respective businesses are listed below:

Subsidiary/Division	Business
Edgetech Services Inc.	IT services and consulting
Data Management Inc. (dormant)	Government consulting and
	Procurement
RightTag, Inc.	Manufacturer of radio
	frequency identification (RFID)
	Products
Desert Communications, Inc.	IT consulting and sales of
	computer systems

Item 2. Description of Property.

Inova does not own any property.

Item 3. Legal Proceedings

None

Item 4. Submission of Matters to a Vote of Security Holders and Small Business Issuer Purchases of Securities.

No matters were submitted to a vote of security holders through solicitation or otherwise during the fourth quarter of the fiscal year covered by this report.

PART II.

Item 5. Market for Common Equity and Related Stockholder Matters.

The Company’s common stock is traded on the pink pages under the symbol “IVTH.PK” Our CUSIP No. is 45776L100 .

The following table lists the high and low closing sales prices for each quarter on the OTCBB for our common shares for the past two fiscal years. The below quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

30-Apr-08	0.01	0.01

31-Jan-08	0.01	0.01

31-Oct-07	0.01	0.01

31-Jul-07	0.02	0.02

30-Apr-07	0.10	0

31-Jan-07	0.01	0.01

31-Oct-06	0.02	0.01

31-Jul-06	0.02	0.01

There are no restrictions that limit our ability to pay dividends on our common stock. We have not declared any dividends since incorporation and we do not anticipate doing so in the foreseeable future. Our present policy is to retain future earnings for use in our operations and expansion of our business.

Item 6. Management’s Discussion and Analysis or Plan of Operation

The information contained in this Management's Discussion and Analysis of Financial Condition and Results of Operation contains "forward looking statements." Actual results may materially differ from those projected in the forward looking statements as a result of certain risks and uncertainties set forth in this report. Although our management believes that the assumptions made and expectations reflected in the forward looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be materially different from the expectations expressed in this Annual Report. The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements.

RESULTS OF OPERATIONS FOR THE TWELVE MONTH PERIOD ENDED APRIL 30, 2008

Total revenues (net sales) increased from $1,615,187 for the twelve month period ending April 2007 to $5,442,402 for the twelve-month period ending April 30, 2008. This is primarily the result of revenues produced from the acquisition of Desert Communications. Desert was acquired on December 21, 2007 therefore the revenue for Inova for the 12 months ending April 30 2008 only includes revenue from Desert for the period from December 21, 2007 to April 30, 2008.

The Company’s selling, general and administrative expenses increased from $1,361,355 for the twelve months ending April 30, 2007 to $2,246,959 for the same period in 2008. This is primarily the result of the expenses from Desert.

Last fiscal year, the Company reported a net loss from continuing operations in the amount of $1,506,927; this loss decreased to $1,450,190 for the fiscal year ended April 30, 2008.

The Company expects revenues to continue to increase as a result of the acquisition of Desert. In addition, once the Company pays off the debt incurred to acquire Desert, cash flow should improve considerably.

LIQUIDITY AND CAPITAL RESOURCES

Our operating activities for the twelve months ended April 30, 2008, did not generate adequate cash to meet our operating needs and were partly funded by our borrowing of cash from related parties.

As of April 30, 2008, we had cash and cash equivalents totaling $12,167 and total current assets were $3,647,816, total current liabilities were $10,041,560 and total stockholders’ equity was $397,764.

Management believes existing cash together with any cash generated from operations will be not be sufficient to meet normal operating requirements including capital expenditures for the next twelve months. We may need to sell additional equity or debt securities or obtain credit facilities to further enhance our liquidity position and/or finance acquisitions, and the sale of additional equity securities could result in additional dilution to our stockholders.

OFF-BALANCE SHEET ARRANGEMENTS

None.

Item 7. Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Inova Technology, Inc.

Santa Monica, California

We have audited the accompanying consolidated balance sheets of Inova Technology, Inc. as of April 30, 2008 and 2007 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended April 30, 2008 and 2007. These consolidated financial statements are the responsibility of Inova’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Inova as of April 30, 2008 and 2007 and the results of its consolidated operations and its consolidated cash flows for the periods described in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 19 to the consolidated financial statements, the Company has restated its financial statements for the year ended April 30, 2008 related to the accounting for put warrants and other errors.

As discussed in Note 3 to the consolidated financial statements, the accompanying consolidated financial statements have been prepared assuming that Inova will continue as a going concern. Inova requires significant amount of cash in its operations and does not have sufficient cash to fund its operations for the next twelve months, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MALONEBAILEY, LLP

www.malone-bailey.com

Houston, Texas

August 13, 2008 except for Notes 3, 7, 8, 14, 15 and 19 which are dated as of April 15, 2011

INOVA TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS


	April 30, 2008
	Restated			April 30, 2007

ASSETS

Current assets
Cash	$	12,167		$	22,847
Restricted cash - escrow		-			339,758
Accounts receivable		769,918			208,408
Contract receivables, net of allowance of $21,822 and $21,832		2,233,252			-
Inventory		101,679			-
Cost in excess of billing		198,655			-
Deferred financing costs		97,500
Prepaid and other current assets		234,645			-

Total current assets		3,647,816			571,013

Fixed assets, net		183,926			1,039
Intangible assets, net		845,332			2,612,304
Goodwill		5,904,782			130,230
Total assets	$	10,581,856		$	3,314,586

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$	1,746,889		$	532,962
Accrued liabilities		849,346			5,809
Deferred income		403,792			-
Derivative liabilities		1,312,768
Notes payable - related parties		3,358,323			662,690
Notes payable, net of unamortized discount of $845,095		2,370,442			-
Total current liabilities		10,041,560			1,201,461
Notes payable - related parties, net of current maturities		142,532			439,545
Total liabilities		10,184,092			1,641,006

Stockholders' deficit
Convertible preferred stock, $.001 par; 25,000,000 shares authorized
4,951,000 issued and outstanding		4,951			4,951
Common stock, $0.001 par value; 150,000,000 shares
authorized; 30,000,000 shares issued and outstanding		30,000			30,000
Additional paid-in capital		2,904,602			2,730,228
Accumulated deficit		(2,541,789	)		(1,091,599	)
Total stockholders' deficit		397,764			1,673,580
Total liabilities and stockholders' deficit	$	10,581,856		$	3,314,586

See accompanying notes to consolidated financial statements

INOVA TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended April 30, 2008 and 2007


	2008
	Restated			2007
CASH FLOWS OPERATING ACTIVITIES

Net loss	$	(1,450,190	)	$	(1,506,927	)
Loss from discontinued operations		-			1,151,474
Adjustments to reconcile net income (loss) to net cash		(1,450,190	)		(355,453	)
provided by (used in) operating activities:
Bad debt expense		17,753			-
Depreciation expense		11,792			25,216
Amortization expense - loan discounts and deferred financing costs		697,233			-
Amortization expense - intangible		281,155			120,214
Management fees		-			105,000
Goodwill impairment		324,310			-
Derivative loss		219,969			-
Changes in operating assets and liabilities:
Accounts receivable		(375,712	)		402,095
Inventory		(7,830	)		-
Cost in excess of billing		112,156			-
Prepaid expenses and other current assets		(130,524	)		-
Accounts payable and accrued expenses		714,269			28,475
Deferred income		403,792			-

NET CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS		818,173			325,547
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS		-			(1,278,943	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		818,173			(953,396	)

CASH FLOW INVESTING ACTIVITIES
Purchase of RightTag		-			(339,758	)
Purchase of Desert Communications		(3,725,000	)		-
Purchase of fixed assets		(27,540	)		-
NET CASH USED IN INVESTING ACTIVITIES OF CONTINUING OPERATIONS		(3,752,540	)		(339,758	)
NET CASH PROVIDED BY INVESTING ACTIVITIES CONTINUED OPERATIONS		-			73,259
NET CASH USED IN INVESTING ACTIVITIES		(3,752,540	)		(266,499	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		3,269,820			-
Repayments made on notes payable		(358,401	)
Proceeds from notes payable - related parties		469,513			1,167,557
Repayments made on notes payable - related parties		(472,765	)		(304,253	)
Capital contributions made by related party		15,520			-
Sale of treasury stock		-			4,715
NET CASH PROVIDED BY FINANCING ACTIVITIES OF CONTINUING OPERATIONS		2,923,687			868,019

NET EFFECT OF EXCHANGE RATES ON CASH					(4,877	)

NET CHANGE IN CASH		(10,680	)		(356,753	)
CASH AT BEGINNING OF PERIOD		22,847			379,600

CASH AT END OF PERIOD	$	12,167		$	22,847

SUPPLEMENTAL INFORMATION:
Interest paid	$	488,727		$	15,147
Income taxes paid	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for partial payment of notes payable	$	-		$	92,326
Common stock issued for conversion of preferred stock		-			528,359
Seller financed purchase of Desert Communications, Inc.		2,630,801			-
Discount on notes payable from beneficial conversion feature		104,427			-
Discount on notes payable from relative fair value of warrants		54,427			-
Discount on notes payable from derivative liabilities		1,092,799

See accompanying notes to consolidated financial statements

INOVA TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended April 30, 2008 and 2007


	2008
	Restated			2007

Revenues	$	5,442,402		$	1,615,187
Cost of revenues		(4,109,518	)		(578,336	)
Operating expenses		(2,246,959	)		(1,361,355	)
Operating loss		(914,075	)		(324,504	)

Other income (expense):
Interest income		-			1,367
Other income		-			9,300
Interest expense		(316,146	)		(41,616	)
Derivative gain/(loss)		(219,969	)		-
Income (loss) from continuing operations		(1,450,190	)		(355,453	)
Loss from discontinued operations		-			84,888
Loss from disposal of discontinued operations		-			(1,236,362	)
NET INCOME (LOSS)		(1,450,190	)		(1,506,927	)
Translation adjustment		-			(4,877	)
Comprehensive loss	$	(1,450,190	)	$	(1,511,804	)


Basic and diluted income (loss) per share:
-from continuing operations	$	(1.03	)	$	(0.43	)
-from discontinued operations	$	0.00		$	1.38
-total	$	(1.03	)	$	(1.81	)

Weighted average common shares		1,500,000			831,477

See accompanying notes to consolidated financial statements

INOVA TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
FOR THE YEARS ENDED APRIL 30, 2008 (RESTATED) AND 2007
																				Other
	Common Stock				Preferred Stock						Treasury Stock						Additional			Comprehensive			Accumulated
	Shares		Par (0.001)		Shares			Par (0.001)			Shares			Amount			Paid-in Capital			Income			Deficit			Total

Balances at April 30, 2006		3,514,423	$	3,514		25,000,000		$	25,000			6,875		$	(4,715	)	$	2,539,340		$	4,877		$	415,328		$	2,983,344
Shares issued to pay notes payable		1,063,238		1,063		-			-			-			-			91,262			-			-			92,325
Shares issued to acquire Data Management		-		-		25,000,000			25,000			-			-			(25,000	)		-			-			-
Shares received for sale of Web's Biggest, LTD		-		-		(25,000,000	)		(25,000	)		-			-			25,000			-			-			-
Reversal of treasury stock purchase		6,875		7		-			-			(6,875	)		4,715			(7	)		-			-			4,715
Preferred shares converted to common shares		25,415,465		25,415		(20,049,000	)		(20,049	)		-			-			(5,366	)		-			-			-
Management fees		-		-		-			-			-			-			105,000			-			-			105,000
Translation adjustment		-		-		-			-			-			-			-			(4,877	)		-			(4,877	)
Net loss		-		-		-			-			-			-			-			-			(1,506,927	)		(1,506,927	)
Balances at April 30, 2007		30,000,000		30,000		4,951,000			4,951			-			-			2,730,228			-			(1,091,599	)		1,673,580
Capital contributions from related party		-		-		-			-			-			-			15,520			-			-			15,520
Discount on notes payable from beneficial conversion feature		-		-		-			-			-			-			104,427			-			-			104,427
Discount on notes payable from warrants		-		-		-			-			-			-			54,427			-			-			54,427
Net loss		-		-		-			-			-			-			-			-			(1,450,190	)		(1,450,190	)
Balances at April 30, 2008 (Restated)		30,000,000	$	30,000		4,951,000		$	4,951			-		$	-		$	2,904,602		$	-		$	(2,541,789	)	$	397,764

See accompanying notes to consolidated financial statements

INOVA TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ending April 30, 2008 and 2007

NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

Inova Technology, Inc. was incorporated in Nevada on May 16, 1997, as Newsgurus.com, Inc. and changed its name to Secure Enterprise Solutions Inc. on January 10, 2002, then to Edgetech Services Inc. and on August 17, 2006 to Inova Technology, Inc.

On June 1, 2005, Inova acquired Web’s Biggest, Inc., a California Corporation, for 25,000,000 convertible preferred shares to the shareholders of Web’s Biggest in consideration for 100% of the outstanding capital of Web’s Biggest and $250,000 be used for general working capital of Inova. This transaction was originally recorded as a recapitalization of Inova. Consequently the transaction was considered to be a reverse merger and the accounting treatment was as if Web’s Biggest, Inc acquired Inova. When completed, this transaction resulted in a change of control of Inova. After consummation of the merger, Inova shareholders owned approximately 10% of the newly combined entity.

During 2008, Inova determined that the original accounting for the merger with Web’s Biggest in 2005 was incorrect. Both companies were operating companies and the intent of the combined entity was to continue on with both operations. Inova should have accounted for the transaction as a reverse acquisition whereby Web’s Biggest purchased Inova and fair value and purchase accounting would apply. See Notes 6 and 18 for more details.

On October 18, 2006, Inova purchased 100% of the outstanding capital stock of Data Management, Inc., a Nevada corporation, from the Data Management shareholders in exchange for 25,000,000 shares of Inova’s convertible preferred shares. The convertible shares used represented approximately 90% of the voting stock of Inova on a fully diluted basis. Data Management was an entity owned by two business entities (Southbase LLC and Advisors LLC) which are owned by Mr. Adam Radly and Mr. Paul Aunger, both officers, directors and majority shareholders of Inova. It was determined that Data Management was not a business and that the transaction was in substance the purchase of fixed assets. Inova acquired no other tangible assets or liabilities. Due to the related party nature of the transaction, the assets purchased were brought over to Inova on their historical cost basis.

Concurrently, Inova sold its wholly-owned subsidiary, Web’s Biggest Limited, to Advisors LLC in exchange for 25,000,000 convertible preferred shares of Inova held by Advisors LLC. Advisors LLC is a company owned by Mr. Paul Aunger, a director and officer of Inova and accordingly, the transaction was not considered an arm’s length transaction.

The 25,000,000 convertible preferred shares used in the Data Management Transaction were the same 25 million convertible preferred shares received with regards to the Web’s Biggest Transaction. Accordingly, these transactions are viewed as one homogeneous transaction and treated as an exchange of Web’s Biggest’s net assets for Data Management’s net assets, akin to a like-kind exchange of assets. However, the historical cost basis. (less accumulated depreciation and amortization) of the net assets acquired from Data Management was significantly less than the net assets of Web’s Biggest by approximately $1,236,000. Accordingly, the difference of $1,236,000 in historical cost basis of the net assets was accounted for as a loss on exchange of assets in the accompanying consolidated statements of operations. This also resulted in the activity of Web’s Biggest being accounted for as discontinued operations.

Prior to the transactions described above Inova was controlled by Advisors, LLC. When the transactions described above were completed, this resulted in a change of control of Inova and the controlling shareholder became Southbase, LLC. Prior to these transactions, the unaffiliated shareholders of Inova owned approximately 10% of Inova and they continued to own approximately 10% on a fully diluted basis after these transactions. The Board of Directors did not change as a result of the transactions described above.

On May 1, 2007, Inova acquired RightTag, Inc. RightTag manufactures standard compliant and durable RFID (Radio Frequency Identification) equipment and provides customer friendly RFID solutions.

On December 21, 2007, Inova acquired Texas-based Desert Communications, Inc. Desert provides IT services to a customer base that primarily consists of Texas based school districts, local government entities and corporations. Services provided by Desert include IT network and communications services, network design, implementation and maintenance.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

These consolidated financial statements include the accounts of Inova Technology, Inc. (Nevada) and its wholly owned subsidiaries Desert Communications, Inc., Edgetech Services Inc. (Ontario), Data Management, Inc. and RightTag, Inc. Significant inter-company accounts and transactions have been eliminated.

Use of estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the year. Actual results could differ from these estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash and cash equivalents

For purposes of the statement of cash flows, Inova considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts receivable

Trade and other accounts receivable are carried at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable primarily include trade receivables from customers in Canada for the year of 2007 and from school districts in Texas for the year of 2008. Bad debt expense is recognized based on management’s estimate of likely losses per year, based on past experience and an estimate of current year uncollectible amounts. There allowance for doubtful accounts was $51,659 and $35,000 as of April 30, 2008 and 2007, respectively.

Inventory

Inventories are stated at the lower of cost or market. Cost is determined by the average cost method for all inventories. Inventories consist primarily of components and finished products held for sale. Rapid technological change and new product introductions and enhancements could result in excess or obsolete inventory. To minimize this risk, Inova evaluates inventory levels and expected usage on a periodic basis and records adjustments as required.

Discontinued Operations

Inova presents the results of operations, financial position and cash flows of operations that have either been sold or that meet the criteria for "held for sale accounting" as discontinued operations. At the time an operation qualifies for held for sale accounting, the operation is evaluated to determine whether or not the carrying value exceeds its fair value less cost to sell. Any loss as a result of carrying value in excess of fair value less cost to sell is recognized in the period the operations meet held for sale accounting. Management judgment is required to (1) assess the criteria required to meet held for sale accounting, and (2) estimate fair value. Changes to the operation could cause it to no longer qualify for held for sale accounting and changes to fair value could result in an increase or decrease to previously recognized losses.

Property and equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Depreciation and amortization is provided principally on the straight-line basis method over the estimated useful lives of the assets. When property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any resulting gains or losses are credited or charged to operations.

Intangible assets, goodwill and impairments of long-lived assets

Intangibles are recorded at cost and amortized on the straight-line method over their estimated useful lives. Goodwill is reviewed annually. An impairment analysis at April 30, 2008 was undertaken and an impairment to goodwill of $324,310 was recorded.

Intangible valuation and Goodwill impairment are determined using similar processes. The main step is to compare the fair value of a reporting unit with its carrying amount, including goodwill. Inova determines the fair value by using a discounted cash flow (“DCF”) analysis approach. Determining fair value requires the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. The cash flows employed in the DCF analyses are based on Inova’s budget and long-term business plan, and various growth rates have been assumed for years beyond the long-term business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

Revenue and cost recognition

Inova has four sources of revenues: IT network design and implementation from Desert, computer equipment sales from Desert, IT consulting services from Edgetech and sales of RFID items from RightTag. Revenue that is received before it is earned is classified as deferred revenue.

IT network design and implementation:

Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost for each contract. This method is used because management considers total cost to be the best available measure of progress on the contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period.

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

Computer equipment sales, IT consulting services & sales of RFID items:

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.

Embedded conversion features

Inova evaluates embedded conversion features within convertible debt and convertible preferred stock under paragraph 12 of SFAS 133 and EITF 00-19 to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under SFAS 133 and EITF 00-19, the instrument is evaluated under EITF 98-5 and EITF 00-27 for consideration of any beneficial conversion feature.

Income taxes

Inova uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. Inova provides a valuation allowance to reduce deferred tax assets to their net realizable value.

Stock based compensation

Effective January 1, 2006, Inova began recording compensation expense associated with stock options and other forms of equity compensation in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 123R, Share-Based Payment, as interpreted by SEC Staff Accounting Bulletin No. 107. Prior to January 1, 2006, Inova had accounted for stock options according to the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, and therefore no related compensation expense was recorded for awards granted with no intrinsic value. Inova adopted the modified prospective transition method provided for under SFAS No. 123R, and, consequently, have not retroactively adjusted results from prior periods. Inova did not issue any employee options during the years ended April 30, 2008 and 2007.

Basic and diluted net income (loss) per share

Basic loss per share is computed using the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the dilutive effects of common stock equivalents on an “as if converted” basis. For the years ended 2008 and 2007, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recent accounting pronouncements

Inova does not expect the adoption of recently issued accounting pronouncements to have a significant impact on Inova’s results of operations, financial position or cash flows.

Derivative Financial Instruments

Inova does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Inova evaluates all of it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, Inova uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. For complex embedded derivatives, Inova uses a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

NOTE 3 - GOING CONCERN

As shown in the accompanying consolidated financial statements, Inova incurred recurring losses from continuing operations of $1,450,190 and $355,453 in 2008 and 2007, respectively, has a working capital deficit of $6,393,744 and has an accumulated deficit of $2,541,789. These conditions raise substantial doubt as to Inova’s ability to continue as a going concern. To address these concerns, management of Inova is trying to raise additional funds and continue to increase revenues from its current businesses.

NOTE 4 - CONTRACTS RECEIVABLE

Completed contracts	$	1,639,799
Contracts in progress		593,453
Total Contracts Receivable	$	2,233,252

Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows:

Costs incurred on uncompleted contracts	$	483,706
Estimated earnings		302,150
Less: Billings to date		(587,201	)
Total	$	198,655

Included in the accompanying balance sheet under the following captions:

Costs and estimated earnings in excess
of billings on uncompleted contracts	$	198,655
Billings in excess of costs and estimated
earnings on uncompleted contracts		—
	$	198,655

NOTE 5 - PURCHASE OF RIGHTTAG AND DESERT COMMUNICATIONS

Acquisition of RightTag, Inc.:

On May 1, 2007, Inova completed its purchase of RightTag, Inc. by acquiring all of the outstanding shares of RightTag for the purchase price of $325,000. Inova also agreed to pay RightTag’s previous shareholders additional funds based on RightTag’s gross profit over the next five years. RightTag manufactures standard compliant and durable RFID (Radio Frequency Identification) equipment and provides customer friendly RFID solutions. The entity was acquired in an effort for Inova to expand and pursue potentially profitable and strong investment opportunities.

The following table presents the allocation of the acquisition cost to the assets acquired and liabilities assumed, based on their fair values:

Cash	$	646
Accounts receivable		4,020
Inventory		12,850
Prepaid expenses		115
Goodwill		300,870
Intangible assets		135,702
Accounts payable		(28,231	)
Accrued liabilities		(1,812	)
Shareholder loans		(99,160	)
Total	$	325,000

The $135,702 of acquired intangible assets (customer list/company name) has a useful life of approximately 3 years.

Acquisition of Desert Communication:

On December 21, 2007, Inova acquired Texas-based Desert Communications (“Desert”) for $5.9 million ($3.3 million paid in cash and $2.6 million to be paid under notes payable).

Desert provides IT services to a customer base that primarily consists of Texas based school districts, local government entities and corporations. Services provided by Desert include IT network and communications services, network design, implementation and maintenance.

Funding for the acquisition was obtained from IBM and Boone Opportunity Lenders (“Boone”). IBM provided part of a $2.5 million line of credit and Boone Opportunity Lenders provided a $1.8 million debenture. Inova also signed a $2.3 million promissory note payable to the previous owners of Desert.

The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed, based on their preliminary fair values:

Cash	$	2,222,632
Accounts receivable		2,406,695
Inventory		293,283
Prepaid expense		6,654
Fixed assets		167,139
Goodwill		3,414,445
Intangible assets		860,555
Accounts payable and accrued liabilities		(3,434,077	)
Total	$	5,937,326

Of the $860,555 of acquired intangible assets, $498,930 was preliminarily assigned to the customer list which has a useful life of approximately 3 years and the remaining $361,625 was preliminarily assigned to three employment agreements which have an average contract life of 2 years.

The results of these acquisitions are included in the consolidated financial statements from the date of acquisition. The following shows the unaudited pro forma results of operations as though the purchases of RightTag and Desert had been completed on May 1, 2006:

	2008			2007
Sales	$	17,633,590		$	14,944,551
Cost of sales		(12,008,040	)		(10,332,197	)
G&A		(3,684,974	)		(3,058,364	)
Interest income (expense)		(550,626	)		295,038
Income from continuing operations		1,389,950			1,849,028
Loss on sale of Web’s Biggest		—			(1,226,061	)
Income from discontinuing operations		—			170,053
Net income	$	1,389,950		$	793,020
Basic and diluted net income per share		(0.00	)		(0.00	)
from continuing operations
Basic and diluted net income per share		(0.00	)		(0.00	)
from discontinuing operations
Basic and diluted net income per share		(0.00	)		(0.00	)
Weighted average common shares		30,000,000			16,629,550

The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.

NOTE 6 - GOODWILL AND INTANGIBLES

RightTag:

In May 2007 when Inova acquired RightTag, Inova accounted for the acquisition using the purchase method of accounting for business combinations. The purchase price and costs associated with the acquisition exceeded the preliminary estimated fair value of net assets acquired by $436,572, which was preliminarily assigned to goodwill.

During 2008, Inova completed the valuation of the intangible assets acquired in the RightTag transaction. Pursuant to the valuation, purchase price of $135,702 was assigned to the customer list acquired and the remaining $300,870 was assigned to goodwill.

Desert:

In December 2007 when Inova acquired Desert, Inova accounted for the acquisition using the purchase method of accounting for business combinations. The purchase price and costs associated with the acquisition exceeded the preliminary estimated fair value of net assets acquired by $4,275,000, of which $860,555 was preliminarily assigned to the customer list and employment agreements acquired and the remaining $3,414,445 was preliminarily assigned to goodwill. The allocation is not final as of the date of this report.

Web’s Biggest:

In June 2005 when Inova acquired Web’s Biggest, the original transaction was accounted for as a recapitalization. No goodwill or other intangibles were recognized.

In 2008, Inova discovered that the original transaction between Inova and Web’s Biggest was not accounted for properly. The acquisition should have been recorded as a reverse acquisition whereby Web’s Biggest purchased Inova’s assets and liabilities to be recorded at fair value. In 2008, Inova completed its valuation of the assets and liabilities acquired in the Web’s Biggest merger. Pursuant to the valuation, purchase price of $360,641 was assigned to the customer list acquired and the remaining $2,612,304 was assigned to goodwill. Inova restated its prior year financial statements to reflect the correction of this error. See Note 18 restatement footnote for more details. An impairment analysis at April 30, 2008 has been undertaken and a reduction to goodwill of $324,310 has been booked.

Goodwill consists of the following as of April 30, 2008 and 2007:

	2008		2007
RightTag	$	300,870	$	—
Desert		3,315,918		—
Edgetech		2,287,994		2,612,304
Total	$	5,904,782	$	2,612,304

Intangible assets consist of the following as of April 30, 2008:

	2008		2007
RightTag - customer list	$	90,468	$	—
Desert - customer list		443,493		—
Desert - employment agreements		301,354		—
Edgetech - customer list		10,018		130,231
Total	$	845,333	$	130,231

For the years ended April 30, 2008 and 2007, Inova recorded amortization expenses of $605,466 and $230,410, respectively.

NOTE 7 - RELATED PARTY TRANSACTION

Due to related parties:
	2008		2007
Due to Southbase, entity associated
with the CEO, matures January 2010,
monthly payments of $11,847, interest
of 7%, unsecured	$	861,563	$	426,503
Due to Desert previous owners, see Note 5		2,300,000		-
Due to IMSS, entity associated with
the CEO, matures January 2010,
no interest, unsecured		—		186,382
Due to former officers, on demand, interest
of 7%, unsecured		—		10,118
Due to Advisors, LLC, entity associated
with the Secretary, matures January 2010,
monthly payments of $15,388, interest of
prime + 3%, secured by receivables (8% at April 30)		247,927		202,142
Due to Advisors, LLC, entity associated
with the Secretary, matures January 2010,
monthly payments of $11,545, interest of
prime + 2%, secured by receivables (7% at April 30)		91,365		277,090
Total due to related parties	$	3,358,323	$	1,102,235

Other related party transactions:

As of April 30, 2008, part of the related party notes of $247,927 and $91,365 relate to a factoring agreement Inova has with Advisors, LLC. The invoices are put into this agreement so monies can be advanced to Inova before Inova’s customers pay, thereby facilitating payment of operating expenses.

As of April 30, 2007, part of the related party notes of $202,142 and $277,090 relate to a factoring agreement Inova has with Advisors, LLC. The invoices are put into this agreement so monies can be advanced to Inova before Inova’s customers pay, thereby facilitating payment of operating expenses.

During the year ended April 30, 2008, a related party made a contribution to Inova in the amount of $15,520.

NOTE 8 - NOTES PAYABLE

There were no notes payable to third parties as of April 30, 2007. Notes payable consisted of the following as of April 30, 2008:

Note payable - Boone	$	1,433,599
Notes payable - individuals		104,118
LOC from IBM		1,427,820
Note payable - Agile		250,000
Total notes payable		3,215,537
Unamortized discount		(845,095	)
Total as of April 30, 2008	$	2,370,442

Note Payable - BOL Opportunity Fund I, LLC (Boone)

In December 2007, Inova borrowed $1,792,000 under a note payable from BOL Opportunity Fund I, LLC. This note has an interest rate of 11.25% per annum and it matures on March 10, 2009. This note is secured by all tangible and intangible assets of Inova, in each case whether now owned or hereafter acquired and wherever located, and all proceeds thereof, together with all proceeds, products, replacements and renewals thereof. This note is also secured by the shares of Desert owned by Inova.

8,353,963 warrants were issued to Boone with this note. These warrants expire in March 2012. 8,133,630 warrants have an aggregated exercise price of $200 and 230,333 warrants have an exercise price of $0.026 per share.

The warrant shares are subject to various put option agreements whereby anytime between January 2010 and January 1, 2013, Boone can require Inova to repurchase from Boone the warrant shares for $1,300,000. Under ASC 815-40 “Put Warrants”, warrants for put shares should be classified as liabilities and measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. As a result, the fair value of these warrants of $992,799 was recorded as a derivative liability (see Note 15) and corresponding discount to the note of which $480,416 had been amortized to interest expense as of April 30, 2008. Upon exercise of the put option, if Inova does not repurchase the shares within 30 days, the resulting liability with become a convertible note. In addition, these warrants are subject to an anti-dilution provision that can require Inova to issue additional warrants based on future issuances of Inova common stock or other convertible instruments. These future warrant issuances are also subject to the same put option agreement mentioned above. As of April 30, 2008, 468,120 warrants were issued to Boone under this provision. See Note 15.

Inova entered into a registration agreement with Boone requiring that a filing be done for the number of Registrable Securities equal to the lesser of (i) the total number of Registrable Securities and (ii) one-third of the number of issued and outstanding shares of Common Stock that are held by non-affiliates. Registrable securities are (i) all Warrant Shares (ii) any additional shares of Common Stock issuable in connection with any anti-dilution provisions in the Warrants (iii) all Put Shares; and (iv) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event. The filing is required to be done by March 31, 2008 and approved and effective shortly thereafter. As of the filing date this had not occurred because of previous SEC filings that are being reviewed by the SEC staff. The document calls for a penalty of 2% of purchase price if this date is not met. However, we have received a written waiver for the 10K until the SEC extended due date and until November 10, 2008 for the registration statement.

This loan has the following financial requirements:

1) Maintain availability under IBM $2.5 million line of credit of $250,000 or greater;

2) EBITDA of $1.7 million for 12 month period ending December 31, 2008 and $300,000 for each 3-month period beginning December 31, 2007;

3) No concentration above $2.5 million to any supplier through the IBM facility;

4) No concentration above 20% to any single customer;

5) No single accounts payable more than the greater of $300,000 or 20% of the accounts receivable balance under 60 days. The portion beyond 90 days past due must be less than 10% of the total accounts receivable.

As of April 30, 2008, the 3 month EBITDA and 20% customer concentration were not in compliance. However, the lender did not deem Desert to be in default and provided Desert with written waivers.

Notes Payable to RightTag Original Creditors

There are notes payable to multiple parties in the amount of $104,118. The interest rates are at 7% per annum and they are payable over 2 years from the date of Right Tag acquisition. These notes are unsecured.

Notes Payable to Desert Previous Owners

There are notes payable to the previous owners of Desert Communications in the amount of $2,300,000 as of April 30, 2008. Accrued interest on these notes and bonuses to the previous owners was $397,884 as of April 30, 2008 and was included in accrued liabilities. The interest rates are at 7% per annum and they are payable over 2 years from the date of Desert acquisition. These notes are unsecured.

$2,500,000 Line of Credit with IBM Credit LLC

Desert has a $2.5 million line of credit with IBM Credit LLC. This line of credit has an interest rate of prime plus 2% and is secured by the assets of Desert.

$250,000 Note Payable - Agile Opportunity Fund, LLC

In February 2008, Inova borrowed $250,000 under a note payable from Agile Opportunity Fund, LLC. This note has an interest rate of 18% per annum and it matures on August 15, 2009. At any time from the date of the note through the date this note is paid in full, Agile has the right to convert the outstanding principal balance plus accrued but unpaid interest into Inova’s common shares at a conversion price equal to $0.005 per share. This note is secured by all tangible and intangible assets of Inova, in each case whether now owned or hereafter acquired and wherever located, and all proceeds thereof, together with all proceeds, products, replacements and renewals thereof.

1,050,000 warrants were issued to Agile with this note. These warrants expire in February 2013. They have an exercise price of $0.005 per share. These warrants are subject to a put option agreement that allows Agile to put the warrant shares back to the Company for $100,000. Under ASC 815-40 “Put Warrants”, warrants for put shares should be classified as liabilities and measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. As a result, the fair value of these warrants of $100,000 was recorded as a derivative liability (see Note 15) and corresponding discount to the note.

Inova determined that the conversion feature of the note was not a derivative instruments pursuant to ASC 815, “Accounting for Derivatives”. Under the provisions of ASC 470-20 “Beneficial Conversion Features”, Inova calculated the intrinsic value of the beneficial conversion feature resulting in a discount of $50,000 which will be amortized over the life of the notes using the effective interest method. The amortized amount for the year ended April 30, 2008 is $9,288. A summary of this convertible note is as follows:

Gross proceeds from note payable	$	250,000
Less: beneficial conversion feature discount		(50,000	)
Less: fair value of warrants granted		(100,000	)
Add: amortization of discount		9,288
Carrying amount of notes on April 30, 2008	$	109,288

At any time, at Inova's sole discretion and upon at least ten business days written notice to Agile, Inova may prepay any or all of the outstanding principal amount of this debenture upon payment to Agile of the repayment amount. The prepayment amount shall equal the accrued but unpaid interest on the outstanding principal amount of this Debenture being repaid plus (i) if the date of such repayment is prior to May 15, 2008, one hundred twenty percent (120%) of the outstanding principal amount of this Debenture being repaid, (ii) if the Repayment Date is on or after May 15, 2008 but prior to August 15, 2008. one hundred thirty percent (130%) of the outstanding principal amount of this Debenture being repaid or (iii) if the Repayment Date is on or after August 15, 2008. one hundred forty percent (140%) of the outstanding principal amount of this Debenture being repaid.

Inova agreed to file a registration statement covering 120% of the shares of Common Stock issuable upon conversion of the Debenture and exercise of all Warrants, no later than twenty five (25) trading days after Inova begins trading on the OTCBB or other listed exchange, and use its best effort s to have the Registration Statement declared effective within one hundred-twenty (120) days after such date. However, if the initial registration statement does not register the full amount of shares of Common Stock issuable upon conversion of the Debenture and exercise of all Warrants. Inova shall file an additional registration statement covering the shortfall of such shares into which the then outstanding principal plus accrued interest would convert into within fifteen (15) business days following a request by Investor. Inova shall keep the registration statement active so long as Agile owns the Debenture, the Warrants or any underlying shares issuable upon conversion or exercise thereof. In the event that Inova is in breach of any provision of this agreement, in addition to any other remedies available to the Investor, Inova shall pay to the Investor an amount equal to one (1%) percent of the outstanding principal amount of the Debenture for each month that the Company is in breach of this agreement. Inova analyzed the registration right arrangement under ASC 825-20 and concluded that there was no contingent liability to be recorded on the date of this note.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

There is a month to month office lease for $3,238 per month for Desert, which expires in August 2008. The other entities operate out of small facilities that do not have rental agreements.

Rent expense was $22,177 and $15,973 for fiscal 2008 and 2007, respectively. No real estate is owned by the Inova companies.

Litigation

None

NOTE 10 - CAPITAL LEASES

The Company is under an obligation for vehicles:

The lease calls for monthly payments of $493 including 4.7% interest. The capitalized cost of the vehicle is $33,638. The amount payable at April 30, 2008 and 2007 was $16,342 and $22,376, respectively and is in accounts payable on the balance sheet. The lease term commenced 2004 to December 2010.

Future minimum lease payments due on the above lease is:

2009		$	5,904
2010			5,904

NOTE 11 - PROFIT SHARING PLAN

Effective January 1999, Desert adopted a profit sharing plan which covers most full-time employees with one year of service. The plan allows for discretionary annual contributions to be made. During the year ended April 2008 $100,000 was contributed by Desert.

NOTE 12 - INCOME TAX

	(US Entities)
	Consolidated			EdgeTech Canada
Net Operating Losses:
Loss (income) for fiscal 2007		647,166		(168,855	)
NOL as of April 30, 2007		647,166		407,072
Loss (income) for fiscal 2008		1,002,842		(28,284	)
Add: Non-deductible Expenses
- Meals & Entertainment (50%)		1,504
- Stock Based Compensation		—
NOL as of April 30, 2008		1,653,016		378,788

Deferred Tax Assets:
Deferred Tax Assets (35% of NOL)		578,556		132,575.80
Valuation Allowance		(578,556	)	(132,575.80	)
Net Deferred Tax Assets		—		—

No income taxes payable in 2008 or in 2007, as a result of the operating losses recorded during those years. Based on a number of factors, including the lack of a history of profits, management believes that there is sufficient uncertainty regarding the realization of deferred tax assets, and, accordingly, has not booked an income tax benefit as of April 30, 2008 and 2007. All losses incurred can be carried forward for seven years for Canadian income tax purposes and twenty years for United States income tax purposes.

NOTE 13 - CAPITAL TRANSACTIONS

As of April 30, 2007 and during fiscal 2008, Inova issued more common shares to its related parties than the number of shares previously authorized. These shares were issued to convert the outstanding preferred stock and to pay down its outstanding debts. Due to the fact that the authorized shares were not increased until July 2008, all common share issuance in excess of its 30,000,000 authorized shares were considered as invalid until July 2008. It was concluded by management that all shares issued in excess of the previously authorized shares considered not to be issued until July 28, 2008. See note 19 for details on prior year invalid issues.

During fiscal 2007:

-	Inova issued 25,000,000 shares of convertible preferred stock for the purchase of Data Management and received back the same 25,000,000 shares of convertible preferred stock for the sale of Web’s Biggest.

-	6,875 common shares that were purchased by Inova in fiscal 2006 for $4,715 in a treasury stock transaction were returned to the original investor for return of the $4,715.

-	1,063,238 common shares were issued to related parties as partial payments of their notes payable. The value of the shares was $92,235 resulting in a reduction of the notes payable by that amount.

-	Inova issued 31,691,675 common shares for the conversion of 25 million preferred shares. The conversion was in accordance with the original terms of the preferred stock agreement. 6,265,210 common shares were reversed as Inova did not have enough authorized common shares leaving 25,415,465 validly issued shares.

During fiscal 2008, following transactions were authorized by the board of directors but the shares agreed to be issued were not considered issued until July 2008 when authorized shares were increased (see note 19 for details):

-	During the year ended April 30, 2008, 2,271,129 common shares approved to be issued to a related party as partial payment of a note payable and account payable with carrying values totaling $195,738.

-	In December 2007, Southbase LLC (a company related to the CEO, Mr. Adam Radly), agreed to convert $600,000 of cash loaned to Inova plus the interest accrued on the loan into 9,298,246 common shares of Inova. The following conversion of the loan amount (principal and interest) was calculated: $400,000 to be converted into 6,666,667 common shares at the stated rate of $0.003 per share and $200,000 was to be converted into 2,631,579 common shares at the stated rate of $0.026 per share.

NOTE 14 - WARRANTS

During the year ended April 30, 2007, Inova granted 1,050,000 warrants at the exercise prices of $0.0033 per share to a related party related to $400,000 borrowed under a term loan. These warrants vest immediately and have a life of three years.

During the year ended April 30, 2008, Inova granted 9,613,963 warrants at exercise prices ranging from $0.001 to $0.005 per share to lenders related to $2,042,000 borrowed. These warrants vest immediately and have a life of five years.

Summary information regarding options and warrants is as follows:

		Weighted
		average
	Warrants	Share Price
Year ended April 30, 2007:
Granted	1,050,000	$	0.003
Outstanding at
April 30, 2007	1,050,000		0.003
Year ended April 30, 2008:
Granted	9,613,963		0.001
Outstanding at
April 30, 2008	10,663,963	$	0.001

Warrants outstanding and exercisable as of April 30, 2007:

		- Outstanding -		Exercisable
		Number	Remaining	Number
Exercise Price		of Shares	life	of Shares
$	0.003	1,050,000	3 years		1,050,000
		1,050,000			1,050,000

Warrants outstanding and exercisable as of April 30, 2008:

		- Outstanding -		Exercisable
		Number	Remaining	Number
Exercise Price		of Shares	life	of Shares
$	0.003	1,050,000	2 years		1,050,000
$	0.001 - 0.026	9,613,963	1 year		12,289
		10,663,963			1,062,289

NOTE 15 - DERIVATIVE LIABILITIES

ASC 815-40 Put Warrant Liabilities

Under ASC 815-40 “Put Warrants”, warrants for put shares should be classified as liabilities and measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. As a result, the fair value of the warrants granted of $1,092,799 to Agile and Boone in conjunction with the debt offerings noted in Note 8 was recorded as a derivative liabilities at inception. In addition, warrants granted to Boone in conjunction with anti-dilution warrant provisions described in Note 8 with a fair value of $37,450 were also recorded as liabilities. The liabilities were subsequently measured at fair value at the end of each reporting period with the changes recorded to earnings. The loss on derivatives for the year ended April 30, 2008 was $219,969 as result of re-measuring these liabilities as of April 30, 2008. The derivative liabilities had a balance of $1,312,768 as of April 30, 2008.

NOTE 16 - MAJOR CUSTOMERS AND MAJOR VENDORS

During fiscal 2007, Inova made sales of $719,331 to a single customer which was in excess of 10% of total revenues for 2007.

During fiscal 2008, revenues generated from top three customers were approximately 40% of total revenues.

There were no major vendors during fiscal 2007.

During fiscal 2008, purchases from the four largest vendors represent approximately 45% of total purchases.

NOTE 17 - SEGMENT INFORMATION

Inova has three reportable segments, one providing IT solutions and services, one providing RFID products and one providing hardware and cabling. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly in deciding how to allocate resources and in assessing performance. The following is the summary of operations by segment:

	Edgetech			Right Tag		DCI		Total

Sales		383,705		158,216		4,900,481		5,442,402

Operating income		(562,218	)	(51,542	)	(104,603	)	(718,363	)

Interest/other		(60,400	)	(16,113	)	(36,876	)	(113,389	)

Assets		3,968,086		461,373		6,054,897		10,581,856

NOTE 18 - DISCONTINUED OPERATIONS

As discussed in Note 1, Web’s Biggest, Inc was sold and accounted for as discontinued operations. The following is a summary of the operating income from discontinued operations for fiscal 2007:

Revenues	$	620,049
Cost of revenues		(288,164	)
Operating expenses		(247,213	)
Operating income		84,672
Interest income		216
Net income from discontinued operations	$	84,888

NOTE 19 - RESTATEMENTS

During the year ended April 30, 2008, Inova restated its prior year financial statements for the following transactions:

On April 30, 2010, Inova’s Board of Directors identified a classification error in the Company’s financial statements as of and for the year ended April 30, 2008 and the other quarters as reported below this amended 10K. The Company determined that the accounting for put warrants granted with various notes payable was incorrect. The original accounting for these transactions classified the relative fair values of the put warrants as equity. After consideration of ASC 480-10-25-8 through 25-13 and 815-40-55-16 through 55-18 “Put Warrants”, the Company determined that these warrants should have originally been recorded as liabilities at their fair value with subsequent changes in fair value recorded through earnings. In addition, the Company identified certain unrecorded expenses and liabilities during fiscal 2010, and has adjusted for these unrecorded transactions as well.

There are 4 other periods which are restated, and those financials are contained at the end of this report.

The specific impact from the above accounting causes:

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants
(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for a previously unrecorded liability and common stock issuance
(4) To record additional net loss as a result items above
(5) To record issuance of common stock previously unrecorded

INOVA TECHNOLOGY INC
CONSOLIDATED BALANCE SHEETS
(Unaudited)
								April 30, 2008
	April 30, 2008			Adjustments				Restated			April 30, 2007

ASSETS

Current assets
Cash	$	12,167		$	-			$	12,167		$	22,847
Restricted cash - escrow		-			-				-			339,758
Accounts receivable		769,918			-				769,918			208,408
Contract receivables, net of allowance of $21,822 and $21,832		2,233,252			-				2,233,252			-
Inventory		101,679			-				101,679			-
Cost in excess of billing		198,655			-				198,655			-
Deferred financing costs		-			97,500		(4)		97,500			-
Prepaid and other current assets		234,645			-				234,645			-
Total current assets		3,550,316			97,500				3,647,816			571,013

Fixed assets, net		183,926			-				183,926			1,039
Intangible assets, net		845,332			-				845,332			2,612,304
Goodwill		5,904,782			-				5,904,782			130,230
Total assets	$	10,484,356		$	97,500			$	10,581,856		$	3,314,586

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$	1,746,889		$	-			$	1,746,889		$	532,962
Accrued liabilities		270,061			579,285		(4)		849,346			5,809
Deferred income		403,792			-				403,792			-
Derivative liabilities		-			1,312,768		(1)		1,312,768			-
Notes payable - related parties		3,358,323			-				3,358,323			662,690
Notes payable, net of unamortized discount		3,160,811			(790,369	)	(2)		2,370,442			-
Total current liabilities		8,939,876			1,101,684				10,041,560			1,201,461
Notes payable - related parties, net of current maturities		142,532			-				142,532			439,545
Total liabilities		9,082,408			1,101,684				10,184,092			1,641,006

Stockholders' deficit
Convertible preferred stock, $.001 par; 25,000,000 shares authorized
4,951,000 issued and outstanding		4,951			-				4,951			4,951
Common stock, $0.001 par value; 150,000,000 shares
authorized; 30,000,000 shares issued and outstanding		30,000			-				30,000			30,000
Additional paid-in capital		3,434,658			(530,056	)	(3)		2,904,602			2,730,228
Accumulated deficit		(2,067,661	)		(474,128	)	(5)		(2,541,789	)		(1,091,599	)
Total stockholders' deficit		1,401,948			(1,004,184	)			397,764			1,673,580
Total liabilities and stockholders' deficit	$	10,484,356		$	97,500			$	10,581,856		$	3,314,586

(1) To record derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record reduction in additional paid-in capital as a result of reclassification of put warrants to liabilities and an increase due to recording of stock issuance in (4)

(4) To record deferred financing costs and accrued liabilities that were previously unrecorded and to reclass accrued interest from notes payable

(5) To record additional net loss as a result items above

INOVA TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended April 30, 2008 and 2007
(Unaudited)

								2008
	2008			Adjustments				Restated			2007

REVENUES	$	5,442,402		$	-			$	5,442,402		$	1,615,187
Cost of revenues		(4,109,518	)		-				(4,109,518	)		(578,336	)
Operating expenses		(2,195,557	)		(51,402	)	(3)		(2,246,959	)		(1,361,355	)
Operating loss		(862,673	)		(51,402	)			(914,075	)		(324,504	)

Other income (expense):
Interest income		-			-				-			1,367
Other income		-			-				-			9,300
Interest expense		(113,389	)		(202,757	)	(2)		(316,146	)		(41,616	)
Derivative gain/(loss)		-			(219,969	)	(1)		(219,969	)		-
Income (loss) from continuing operations		(976,062	)		(474,128	)			(1,450,190	)		(355,453	)
Loss from discontinued operations		-			-				-			84,888
Loss from disposal of discontinued operations		-			-				-			(1,236,362	)
NET INCOME (LOSS)		(976,062	)		(474,128	)			(1,450,190	)		(1,506,927	)
Translation adjustment		-			-				-			(4,877	)
Comprehensive loss	$	(976,062	)	$	(474,128	)		$	(1,450,190	)	$	(1,511,804	)

Basic and diluted income (loss) per share:
-from continuing operations	$	(0.65	)	$	(0.32	)		$	(0.97	)	$	(0.43	)
-from discontinued operations	$	0.00		$	0.00			$	0.00		$	1.38
-total	$	(0.65	)	$	(0.32	)	(4)	$	(0.97	)	$	(1.81	)

Weighted average common shares
Basic and diluted		1,500,000			0				1,500,000			831,477

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for a previously unrecorded liability

(4) To record additional net loss as a result items above

NOTE 20 - SUBSEQUENT EVENTS

On May 7, 2008, Desert entered into a new month to month office lease, effective September 2008. Rent is payable at $6,300 per month including tax.

In July 2008, Inova borrowed $500,000 from Ascendiant. The note has warrants of 2,448,915 for Ascendiant at an exercise price of $100 total. These warrants have a put option of $250,000. There are also related warrants for Agile of 195,913 at an exercise price of $100 total. The interest term of the note is the higher of prime + 3% or 15%, with 6 principal payments of $83,333 starting in July, 2009.

The Boone note in 2007 was $1,792,000 with the option to increase to $2,016,000. A guarantee of $224,000, which had been arranged as possible at the time of the original financing was put into place. This increases the Boone note payable to it’s maximum amount, $2,016,000. The terms of this are the same as the original Boone borrowing since this is part of the same note.

In July 2008, number of authorized shares was increased to 150,000,000 shares. 17,845,585 shares previously agreed to be issued to the related parties were issued for conversion of their notes payable. These shares were valued at $1,156,937 and additional interest expense of $234,886 was recorded by Inova for the excess fair value.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There are no disagreements with our accountant on accounting and financial disclosure.

Item 8A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Financial Officer has concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below, which we view as an integral part of our disclosure controls and procedures.

Changes in Internal Controls over Financial Reporting

We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-KSB that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on its evaluation, our management concluded that there is a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Item 8B. Other Information.

On December 21, 2007, Inova acquired Texas-based Desert Communications (“Desert”) for $5.9 million ($3.3 million paid in cash and $2.6 million to be paid under notes payable).

Funding for the acquisition was obtained from IBM and Boone Opportunity Lenders (“Boone”). IBM provided part of a $2.5 million line of credit and Boone Opportunity Lenders provided a $1.8 million debenture. Inova signed a $2.3 million promissory note payable to the previous owners of Desert.

The fair values of the assets acquired and the liabilities assumed at December 21, 2007 are as follows:

Cash	$	2,222,632
Accounts receivable		2,406,695
Inventory		293,283
Prepaid expense		6,654
Fixed assets		167,139
Goodwill		3,414,445
Intangible assets		860,555
Accounts Payable and accrued liabilities		(3,434,077	)

Total	$	5,937,326

The following shows the unaudited pro forma results of operations as though the purchases of Right Tag and Desert had been completed on May 1, 2006:

	2008			2007
Sales	$	17,633,590		$	14,944,551
Cost of sales		(12,008,040	)		(10,332,197	)
G&A		(3,684,974	)		(3,058,364	)
Interest income (expense)		(550,626	)		295,038
Income from continuing operations		1,389,950			1,849,028
Loss on sale of Web’s Biggest		—			(1,226,061	)
Income from discontinuing operations		—			170,053
Net income	$	1,389,950		$	793,020

Restatements

There were management fees of $15,000 per month for prior periods which were not paid but which are now being realized as an increase in expense and in paid in capital. This is a total of $180,000, which is a reduction of retained earnings and increase to equity.

Also, the company determined hat the original accounting for the merger with Web’s Biggest in 2005 was incorrect. Both companies were operating companies and the intent of the combined entity was to continue on with both operations. Inova should have accounted for the transaction as a reverse acquisition whereby Web’s Biggest purchased Inova and fair value and purchase accounting would apply.

PART III.

Item 9. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act.

Our directors and executive officers as of the date of this Report are as follows:

Name	Age	Position
Adam Radly	39	Chief Executive Officer, President, Treasurer
Paul Aunger	49	Secretary, Director
Jeffrey Mandelbaum	44	Director
Bob Bates	40	Chief Financial Officer

Adam Radly, President, Chief Executive Officer, Chairman and Treasurer

Mr. Radly became Chief Executive Officer of Inova after the merger with Web’s Biggest.

Mr. Radly was the founder and CEO of Isis Communications. While he was CEO of Isis, the company’s revenue increased from zero to $22 million, and Mr. Radly helped the company complete an IPO raising approximately $40 million. During his tenure, Isis completed eight acquisitions, and raised an additional $30 million from U.S. institutional investors in a secondary offering. Isis later merged with AAV Ltd. Mr. Radly is also the founder of XSIQ (International) Pty Ltd., a leading provider of K-12 education software and SponsorAnything.com, a leading sponsorship website.

Paul Aunger, Secretary

Mr. Aunger became a director and the Company’s Secretary on November 22, 2005. He is managing partner of Advisors, LLC.

Jeffrey Mandelbaum, Director

Jeff was with Sybase, Inc. (NYSE: SY) from 1986-1996. As a member of the initial management team, he held a variety of positions in sales and executive management. In his most recent position at Sybase as CEO and President of Sybase Financial Services, Inc., he was responsible for worldwide customer and partner financing. Under Jeff’s leadership, Sybase Financial Services, Inc. closed over $900,000,000 in financing transactions between 1990 and 1996. Jeff has provided advisory services focused on strategy, sales and marketing, business development, and corporate finance services for leading private equity investors and their portfolio companies including Warburg Pincus, Kleiner Perkins Caufield & Byers, Sigma Partners, Jefferson Partners, Baker Capital, and Draper Atlantic.

Bob Bates, Chief Financial Officer

Bob is a CPA with almost 20 years experience as a Controller and CFO for various public and private entities in several countries. He was with Allied Capital (NYSE) as Controller and has worked with other Billion dollar plus companies. He also spent time with KPMG.

Director Independence

The Board of Directors has determined that Mr. Mandelbaum is an independent director under applicable SEC rules. The full Board of Directors fulfills the role of the Audit Committee. We do not have an Audit Committee financial expert. The Board believes that due to the Company’s small size, an audit committee is unnecessary and would impose high costs in comparison to the potential benefits.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (the "SEC”) initial reports of ownership and reports of changes in ownership of common stock and other equity securities of our Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish our Company with copies of all Section 16(a) forms they file.

Based on our review of the Section 16(a) forms filed with the SEC, no director, officer, or 10% beneficial owner of our securities failed to timely file any report required under Section 16(a). To our knowledge, none of the above persons failed to report a reportable transaction.

We do not have a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have not adopted such a code of ethics because we have determined that such a code would be an unnecessary and bureaucratic practice given the small size of the Company's management.

Item 10. Executive Compensation.

The following describes the cash and stock compensation paid to our directors and officers during the two past fiscal years. Our fiscal year ends on April 30. As a result, our most recent fiscal year ended April 30, 2008, and is referred to below as 2008. The previous fiscal year ended April 30, 2007 and is referred to as 2007 below.

SUMMARY COMPENSATION TABLE

Name and principal position	Year	Management fee ($)		Stock Awards ($)		Total ($)
Adam Radly, Chairman and CEO	2008		120,000		-0-		-0-
Adam Radly, Chairman and CEO	2007		120,000		-0-		-0-
Paul Aunger, Secretary and Director	2008		60,000		-0-		0
Paul Aunger, Secretary and Director	2007		60,000		-0-		-0-

The above compensation, although accrued by Inova, has not been paid to our officers. Our officers have agreed to allow this compensation to accrue for the time being until the Company’s cash flow improves; however, they may revoke this arrangement at any time.

Other related party information:

The Company pays professional fees of $5,000 a month to Advisors LLC, a company controlled by Paul Aunger, a director of the company. The Company also pays $10,000 a month in consulting fees to Southbase LLC, a company controlled by our CEO, Adam Radly.

Our executive officers do not have written employment agreements with the Company.

Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table describes the equity compensation available to our management.

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	-0-	-0-	22,500,000 (1)
Equity compensation plans not approved by security holders	-0-	-0-	-0-
Total	-0-	-0-	22,500,000 (1)

(1) Includes 2,000,000 non-restricted Class B preferred shares authorized to be issued for each acquisition with more than $40 million in sales or $10 million in EBITDA and 2,000,000 non-restricted Class B preferred shares authorized to be issued for each acquisition with less than $40 million in sales. Each Class B preferred share is convertible into common stock at the rate of 1 to 100.

The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of July 31, 2008 by each person known by us to beneficially own 5% or more of our outstanding common stock; each of our directors; each of the Named Executive Officers; and all of our directors and Named Executive Officers as a group.

In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or direct the disposition of such security. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or debentures held by that person that are currently exercisable or convertible or exercisable or convertible within 60 days of July 31, 2008 are deemed outstanding.

Percentage of beneficial ownership is based upon 47,845,585 shares of common stock outstanding at July 31, 2008. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person's name.

Name and Address of Beneficial Owner (1)	Number of Shares Beneficially Owned	Percent of Class
Adam Radly - CEO and related entities	28,446,904 Common Stock, $0.001 Par Value	59.5%

Paul Aunger-Secretary and related entities	16,683,127	34.9%

(1)	The address for these owners is 233 Wilshire Blvd, Suite 300 Santa Monica, CA 90401
(2)	There are approximately 28 shareholders of record, 1 of which is a holder for several hundred individuals

Item 12. Certain Relationships and Related Transactions.

Our Chairman and CEO, Adam Radly, has loaned the Company money several times during the past fiscal year. The amount outstanding under these loans is $142,532. Interest is accruing at the rate of 7% per year.

In December 2007, Southbase LLC agreed to convert $600,000 of cash loaned to the Company plus the interest accrued on the loan into 9,298,246 common shares of the Company. However, as discussed above, this transaction was not accounted for until July, 2008, when the authorized shares were increased.

The Company has an invoice factoring arrangement with Advisors LLC, an entity related to Paul Aunger, our Secretary and a director. The amount of the invoices factored was $348,525 during this fiscal year.

Item 13. Exhibits

(A)

Exhibits

Exhibit Number	Description
31.1	Certification of the Chief Executive Officer required by Rule 13a - 14(a) or Rule 15d - 14(a).
31.2	Certification of the Chief Financial Officer required by Rule 13a - 14(a) or Rule 15d - 14(a).
32.1	Certification of the Chief Executive Officer required by Rule 13a - 14(b) or Rule 15d - 14(b) and 18 U.S.C. 1350.
32.2	Certification of the Chief Financial Officer required by Rule 13a - 14(b) or Rule 15d - 14(b) and 18 U.S.C. 1350.

Item 14. Principal Accountant Fees and Services.

AUDIT FEES

We estimate fees of $68,000 for this year's audit of our financial statements. Last year, we were billed $40,000 for our year-end audit.

AUDIT-RELATED FEES

We paid aggregate fees of $46,000 for assurance and related services by the current principal accountant that are related to the performance of the review of our financial statements. For Fiscal Year 2007, these fees were $10,000.

TAX FEES

We were billed aggregate fees of $2,000 for tax compliance, tax advice, and tax planning by our former principal accountant for this fiscal year. Last fiscal year, these fees were $2,000.

ALL OTHER FEES

This year, we were billed $0 for products and services provided by our principal accountant not otherwise disclosed above, Last year, we were billed $0 for these products and services.

None of the above fees were subject to audit committee pre-approval requirements.

SIGNATURES

INOVA TECHNOLOGY INC.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature	Name and Title	Date

/s/ Adam Radly	Adam Radly
	Chairman and CEO	April 19, 2011

/s/ Bob Bates	Bob Bates
	CFO	April 19, 2011

/s/ Paul Aunger	Paul Aunger
	Secretary and Director	April 19, 2011

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	July 31, 2008
	Restated			April 30, 2008
ASSETS

Current assets
Cash	$	256,805		$	12,167
Accounts receivables, net		3,067,870			3,003,170
Inventory		103,658			101,679
Cost in excess of billing		180,958			198,655
Deferred financing costs		-			97,500
Prepaid and other current assets		580,771			234,645

Total current assets		4,190,062			3,647,816

Fixed assets, net		186,268			183,926
Intangible assets, net		737,224			845,332
Goodwill		5,904,782			5,904,782

Total assets	$	11,018,336		$	10,581,856

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities
Accounts payable		2,382,941		$	1,746,889
Accrued liabilities		724,916			849,346
Short term debt - related parties		1,924,656			3,358,323
Short term debt, net of unamortized discounts of $1,028,842 and $845,095, respectively		1,909,567			2,370,442
Derivative liabilities		1,589,688			1,312,768
Deferred income		520,475			403,792

Total current liabilities		9,052,243			10,041,560

Long term debt - related parties		137,192			142,532

Total liabilities		9,189,435			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000
shares authorized; 0 and 4,951,000 issued and outstanding		-			4,951
Common stock, $0.001 par value; 750,000,000 shares		48,723			30,000
authorized; 48,723,299 shares and 30,000,000
shares issued and outstanding, respectively
Additional paid-in capital		4,384,090			2,904,602
Accumulated deficit		(2,603,912	)		(2,541,789	)
Total stockholders' equity		1,828,901			397,764
Total liabilities and stockholders' equity	$	11,018,336		$	10,581,856

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended July 31, 2008 and July 31, 2007 (unaudited)

	2008 Restated			2007

REVENUES	$	5,892,315		$	385,112

Cost of revenues		(4,040,229	)		(145,263	)
Operating expenses		(1,418,604	)		(170,251	)

OPERATING INCOME		433,482			69,598
(Gain)/loss on derivative liabilities		12,438			-
Interest expense		(508,043	)		(31,695	)

NET INCOME (LOSS)	$	(62,123	)	$	37,903


Basic and diluted income per share	$	0.00		$	0.03

Weighted average common shares		48,243,539			1,500,000

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended July 31, 2008 and 2007 (unaudited)

	2008
	Restated			2007

CASH FLOWS OPERATING ACTIVITIES
Net income	$	(62,123	)	$	37,903

Adjustments to reconcile net income to cash provided by
operating activities:
Additional shares issued for debt conversion		126,340			2,225
Depreciation		9,214			30,054
Management fees added to related party note payable		30,000			0
Amortization of loan discounts and deferred financing costs		409,799			0
Amortization of intangible assets		108,108
Derivative loss		12,438
Shares issued for financing costs		76,762
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		657,173			40,878
Accounts receivable		(64,700	)		31,190
Inventory		(9,119	)		540
Costs in excess of billings		24,837
Deferred income		116,683
Prepaid expenses and other current assets		(346,126	)		10,784

Net cash provided by operating activities		1,089,286			153,574

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		(11,556	)		(2,215	)

Net cash used in investing activities		(11,556	)		(2,215	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans		671,125			110,000
Repayment of loans		(1,001,128	)		(237,508	)
Repayment of loans - related parties		(503,089	)		0

Net cash used in financing activities		(833,092	)		(127,508	)

NET CHANGE IN CASH		244,638			23,851
CASH AT BEGINNING OF PERIOD		12,167			22,847

CASH AT END OF PERIOD	$	256,805		$	46,698

SUPPLEMENTAL INFORMATION:
Interest paid	$	42,209		$	15,127
Income taxes paid	$	0		$	0

NONCASH INVESTING AND FINANCING ACTIVITIES:
Discount on note payable from beneficial conversion feature	$	182,642		$	54,427
Discount on note payable from warrants		30,755			54,428
Discount on note payable from derivatives		264,482
Common stock issued for debt		1,087,246			0
Preferred stock converted to common stock		6,276			0
Net liabilities assumed under the Right Tag acquisition		0			111,572

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	October 31, 2008
	Restated			April 30, 2008
ASSETS

Current assets
Cash	$	624,324		$	12,167
Accounts receivables		4,380,597			3,003,170
Inventory		262,573			101,679
Deferred financing costs		0			97,500
Costs in excess of billings		82,512			198,655
Prepaid and other current assets		164,790			234,645

Total current assets		5,514,796			3,647,816

Fixed assets		1,779,952			183,926
Intangible assets		1,754,908			845,332
Goodwill		8,873,755			5,904,782


Total assets	$	17,923,411		$	10,581,856

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	3,707,986		$	1,746,889
Accrued liabilities		906,172			849,346
Short term debt, net of unamortized discount of $2,715,728 and $845,095, respectively		4,427,511			2,370,442
Short term debt - related parties		1,927,752			3,358,323
Derivative liabilities		5,176,953			1,312,768
Deferred income		519,172			403,792

Total current liabilities		16,665,546			10,041,560

Long term debt - related parties		117,716			142,532

Total liabilities		16,783,262			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000 shares authorized; 1,500,000 and 4,951,000 issued and outstanding, respectively		1,500			4,951
Common stock, $0.001 par value; 150,000,000 shares authorized; 49,011,574 and 30,000,000 shares outstanding, respectively		49,012			30,000
Additional paid-in capital		5,734,201			2,904,602
Accumulated deficit		(4,644,564	)		(2,541,789	)

Total stockholders' equity		1,140,149			397,764

Total liabilities and stockholders' equity	$	17,923,411		$	10,581,856

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended October 31, 2008 and 2007

	2008
	Restated			2007

REVENUES	$	6,781,041		$	90,954

Cost of revenues		(4,956,558	)		(65,255	)
Operating expenses		(1,585,714	)		(142,620	)

OPERATING INCOME		238,769			(116,921	)

Other income (expense):

Gain/(loss) on derivative liabilities		(1,729,131	)		0
Interest expense		(550,290	)		(127,163	)

NET INCOME (LOSS)	$	(2,040,652	)	$	(244,084	)

Basic and diluted income (loss) per share:

Weighted average common shares outstanding		49,011,574			1,814,660

Earnings (Loss) per share		(0.04	)		(0.13	)

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended October 31, 2008 and 2007

	2008
	Restated			2007

REVENUES	$	12,673,356		$	476,066

Cost of revenues		(8,996,787	)		(210,518	)
Operating expenses		(2,979,442	)		(295,731	)

OPERATING INCOME		697,127			(30,183	)

Other income (expense):
Gain/(loss) on derivative liabilities		(1,741,569	)		0
Interest expense		(1,058,333	)		(175,998	)

NET INCOME (LOSS)	$	(2,102,775	)	$	(206,181	)

Basic and diluted income (loss) per share:

Weighted average common shares outstanding		48,754,320			36,293,200

Earnings (Loss) per share		(0.04	)		(0.01	)

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended October 31, 2008 and 2007

	2008
	Restated			2007
CASH FLOWS OPERATING ACTIVITIES
Net loss	$	(2,102,775	)	$	(206,181	)
Changes in operating assets and liabilities:
Additional shares issued for conversion of debt		-			80,150
Depreciation		185,123			9,129
Amortization of loan discount and deferred financing costs		843,836			-
Amortization of intangible assets		262,957			60,108
Derivative loss		1,741,569			-
Management fee added to related party note payable		30,000			-
Shares issued for financing costs		76,762			-
Additional interest expense		126,340			-
Changes in operating assets and liabilities:
Accounts receivable		(1,377,427	)		127,739
Inventory		(102,894	)		272
Cost in excess of billing		116,143			-
Prepaid assets and other current assets		76,426			335,899
Deferred income		115,380			-
Accrued payable		1,960,754			58,305
Accrued expenses		163,043			40,736

NET CASH PROVIDED BY OPERATING ACTIVITIES		2,115,237			506,157

CASH FLOW INVESTING ACTIVITIES
Investment in Desert		-			(100,000	)
Cash acquired from acquisition-Trakkers		66,614			(325,000	)
Cash paid for acquisition-Trakkers		(2,717,900	)		(2,215	)

NET CASH USED IN INVESTING ACTIVITIES		(2,651,286	)		(427,215	)

CASH FLOW FINANCING ACTIVITIES
Proceeds from notes payable-related parties		56,031			273,396
Payments on debt		(1,549,443	)		-
Payments on debt-related parties		(531,363	)		(350,295	)
Proceeds from notes payable		3,172,981			-

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,148,206			(76,899	)

NET CHANGE IN CASH		612,157			2,043

CASH AT BEGINNING OF YEAR		12,167			22,847

CASH AT END OF PERIOD	$	624,324		$	24,890


SUPPLEMENTAL INFORMATION:

Interest paid	$	174,546		$	0
Income taxes paid	$	0		$	0

Common stock issued to settle debt	$	1,131,640		$	92,324
Shares issued for accounts payable - related parties		-			57,250
Discount on notes payable from beneficial conversion feature		182,642			54,427
Discount on notes payable from warrants		30,755			54,428
Net liabilities assumed under the Right-Tag Acquisition		-			111,572
Preferred stock converted to common stock		6,276			-
Debt and preferred stock issued to purchase Trakkers, LLC		3,335,595			-

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	January 31, 2009 Restated			April 30, 2008
ASSETS

Current assets
Cash	$	316,805		$	12,167
Accounts receivable, net		3,197,010			3,003,170
Inventory		558,681			101,679
Deferred financing costs		-			97,500
Costs in excess of billings		167,740			198,655
Prepaid and other current assets		142,798			234,645

Total current assets		4,383,034			3,647,816

Fixed assets, net of depreciation		1,761,173			183,926
Intangible assets, net of amortization		1,558,348			845,332
Goodwill		8,873,755			5,904,782

Total assets	$	16,576,310		$	10,581,856

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	2,019,477		$	1,746,889
Accrued liabilities		1,016,361			849,346
Short term debt, net of unamortized discount of $2,578,129 and $845,095, respectively		5,075,129			2,370,442
Short term debt - related parties		1,916,155			3,358,323
Derivative liabilities		5,153,339			1,312,768
Deferred income		503,576			403,792

Total current liabilities		15,684,037			10,041,560

Long term debt - related parties		122,716			142,532

Total liabilities		15,806,753			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000 shares authorized; 1,500,000 and 4,951,000 issued and outstanding, respectively		1,500			4,951
Common stock, $0.001 par value; 150,000,000 shares authorized; 49,011,574 and 30,000,000 shares outstanding, respectively		49,012			30,000
Additional paid-in capital		5,734,201			2,904,602
Accumulated deficit		(5,015,156	)		(2,541,789	)

Total stockholders' equity		769,557			397,764

Total liabilities and stockholders' equity	$	16,576,310		$	10,581,856

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended January 31, 2009 and 2008 (unaudited)

	2009
	Restated			2008


REVENUES	$	5,338,688		$	1,018,853

Cost of revenues		(3,249,600	)		(676,320	)
Operating expenses		(1,953,461	)		(782,759	)

OPERATING INCOME (LOSS)		135,627			(440,226	)

Other income (expense):
Gain/(loss) on derivative liabilities		247,976			-
Interest expense		(767,290	)		(252,729	)
Interest income		134			-
Other income		12,961			-

NET INCOME (LOSS)	$	(370,592	)	$	(692,955	)

Weighted average common shares		49,011,574			30,000,000
Basic and diluted loss per share:	$	(0.01	)	$	(0.02	)

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine months ended January 31, 2009 and 2008 (unaudited)


	2009 Restated			2008 Restated


Revenues	$	18,012,044		$	1,494,919

Cost of revenues		(12,246,387	)		(886,838	)
Operating expenses		(4,934,416	)		(1,097,340	)

OPERATING INCOME (LOSS)		831,241			(489,259	)

Other income (expense):
Gain/(loss) on derivative liabilities		(1,493,593	)		-
Interest expense		(1,825,623	)		(409,877	)
Interest income		1,647			-
Other income		12,961			-

NET INCOME (LOSS)	$	(2,473,367	)	$	(899,136	)


Weighted average common shares		48,882,492			30,000,000
Basic and diluted loss per share	$	(0.05	)	$	(0.03	)

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months ended January 31, 2009 and 2008

	2009
CASH FLOWS FROM OPERATING ACTIVITIES	Restated			2008

Net loss	$	(2,473,367	)	$	(899,136	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation expense		203,902			298,852
Amortization of loan discounts and deferred financing costs		1,215,835			-
Amortization of intangible assets		446,189			-
Derivative loss		1,493,593			-
Additional shares issued for debt conversion		126,340			80,151
Management fee added to related party note payable		30,000
Shares issued for financing costs		76,762
Changes in operating assets and liabilities:
Accounts receivable		(193,840	)		146,246
Inventory		(399,002	)		(27,952	)
Cost in excess of billings		30,915			-
Prepaid expenses and other current assets		111,746			317,776
Deferred income		99,784			-
Accounts payable		272,245			874,139
Accrued expenses		277,594			390,568

CASH PROVIDED BY OPERATING ACTIVITIES		1,318,696			1,180,644

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets		-			(2,215	)
Cash paid for acquisition of Desert		-			(3,725,000	)
Cash paid for acquisition of Right Tag		-			(325,000	)
Cash acquired in acquisition of Trakkers/Tesselon		66,614			-
Cash paid for acquisition of Trakkers/Tesselon		(2,717,900	)		-

CASH USED IN INVESTING ACTIVITIES		(2,651,286	)		(4,052,215	)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on debt - related parties		61,031			-
Borrowings on debt		4,282,822			3,920,510
Capital contributions		-			15,520
Principal payments on debt		(2,163,665	)		(791,619	)
Principal payments on debt - related parties		(542,960	)		-

CASH PROVIDED BY FINANCING ACTIVITIES		1,637,228			3,144,411

NET INCREASE IN CASH		304,638			272,840

CASH AT BEGINNING OF YEAR		12,167			22,847

CASH AT YEAR END	$	316,805		$	295,687

SUPPLEMENTAL INFORMATION:
Cash paid for interest	$	261,819		$	-
Cash paid for income taxes		45,000			30,000

NON-CASH INVESTING AND FINANCING ACTIVITIES
Shares issued for conversion of loans		-			692,324
Shares issued for accounts payable-related parties		-			57,250
Discount on notes payable from beneficial conversion feature		182,642			54,427
Discount on notes payable from warrants		30,755			541,628
Discount on notes payable from derivatives		2,346,978			-
Net liabilities assumed under the Right Tag acquisition		-			111,572
Net assets acquired under the Desert acquisition		-			1,662,326
Seller financing of Desert acquisition		-			2,475,000
Common stock issued for debt		1,131,640			-
Preferred stock converted to common stock		6,276			-
Debt and preferred stock issued for Trakkers, LLC		3,335,595			-

RESTATEMENTS

As described above in note 19, the restatements are being done to make the following changes. The following tables show the original amount, the amount of the change for each affected account by period, and the corrected amount.

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants
(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for a previously unrecorded liability and common stock issuance
(4) To record additional net loss as a result items above
(5) To record issuance of common stock previously unrecorded

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

								July 31, 2008
	July 31, 2008			Adjustments				Restated			April 30, 2008
ASSETS

Current assets
Cash	$	256,805		$	-			$	256,805		$	12,167
Accounts receivables, net		3,067,870			-				3,067,870			3,003,170
Inventory		103,658			-				103,658			101,679
Cost in excess of billing		180,958			-				180,958			198,655
Deferred financing costs		-			-				-			97,500
Prepaid and other current assets		580,771			-				580,771			234,645

Total current assets		4,190,062			-				4,190,062			3,647,816

Fixed assets, net		186,268			-				186,268			183,926
Intangible assets, net		737,224			-				737,224			845,332
Goodwill		5,904,782			-				5,904,782			5,904,782

Total assets	$	11,018,336		$	-			$	11,018,336		$	10,581,856

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities
Accounts payable	$	2,382,941		$	-			$	2,382,941		$	1,746,889
Accrued liabilities		146,233			578,683		(4)		724,916			849,346
Short term debt - related parties		1,924,656			-				1,924,656			3,358,323
Short term debt, net of unamortized discounts of $1,028,842 and
$845,095, respectively		2,552,849			(643,282	)	(2)		1,909,567			2,370,442
Derivative liabilities		-			1,589,688		(1)		1,589,688			1,312,768
Deferred income		520,475			-				520,475			403,792

Total current liabilities		7,527,154			1,525,089				9,052,243			10,041,560

Long term debt - related parties		137,192			-				137,192			142,532

Total liabilities		7,664,346			1,525,089				9,189,435			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000
shares authorized; 0 and 4,951,000 issued and outstanding		-			-				-			4,951
Common stock, $0.001 par value; 750,000,000 shares
authorized; 48,723,299 shares and 30,000,000
shares issued and outstanding, respectively		48,240			483		(5)		48,723			30,000
Additional paid-in capital		5,071,594			(687,504	)	(3),(5)		4,384,090			2,904,602
Accumulated deficit		(1,765,844	)		(838,068	)	(6)		(2,603,912	)		(2,541,789	)
Total stockholders' equity		3,353,990			(1,525,089	)			1,828,901			397,764

Total liabilities and stockholders' equity	$	11,018,336		$	-			$	11,018,336		$	10,581,856

(1) To record derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record reduction in additional paid-in capital as a result of reclassification of put warrants to liabilities and an increase due to recording of stock issuance in (5)

(4) To record accrued liabilities that were previously unrecorded and to reclass accrued interest from notes payable

(5) To record shares issued for services that were previously unrecorded

(6) To record additional net loss as a result items above

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended July 31, 2008 and July 31, 2007 (unaudited)

								2008
	2008			Adjustments				Restated			2007

REVENUES	$	5,892,315		$	-			$	5,892,315		$	385,112

Cost of revenues		(4,040,229	)		-				(4,040,229	)		(145,263	)
Operating expenses		(1,287,347	)		(131,257	)	(3)		(1,418,604	)		(170,251	)

OPERATING INCOME		564,739			(131,257	)			433,482			69,598
(Gain)/loss on derivative liabilities		-			12,438		(1)		12,438			-
Interest expense		(262,923	)		(245,120	)	(2)		(508,043	)		(31,695	)

NET INCOME (LOSS)	$	301,816		$	(495,196	)		$	(62,123	)	$	37,903


Basic and diluted income per share	$	0.01		$	(0.01	)	(4)	$	(0.00	)	$	0.03

Weighted average common shares		48,243,539			479,760		(5)		48,723,299			1,500,000

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for a previously unrecorded liability and common stock issuance

(4) To record additional net loss as a result items above

(5) To record issuance of common stock previously unrecorded

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED JULY 31, 2008

Net revenues increased from $385,112 in the three-month period ending July 31, 2007 to $5,892,315 for the three-month period ending July 31, 2008. This is due to the revenues from the newly-acquired Desert Communications.

Operating expenses increased from $170,251 for the three months ending July 31, 2007 to $1,418,604 for the same period in 2008. This was mainly due to the expenses from the newly-acquired Desert Communications.

Net income from continuing operations decreased from $37,903 for the three months ending July 31, 2007 to a loss of $62,123 for the same period in 2008.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operations for the three month period ended July 31, 2008 was $1,089,286, as compared to cash provided by operations of $153,574 for the three months ended July 31, 2007. The change is primarily due to the acquisition of Desert. Cash used in investing activities for the three month period ended July 31, 2008 was $11,556, as compared to $2,215 for the three months ended July 31, 2007. The change was due to fixed asset purchases. Cash used for financing activities for the three month period ended July 31, 2008 was $833,092, as compared to $127,508 for the three months ended July 31, 2007. The change was due to significant loan repayments.

Our operating activities for the three months ended July 31, 2008, have generated adequate cash to meet our operating needs. As of July 31, 2008, we had cash and cash equivalents totaling $256,805, and accounts receivable of $3,067,870.

Management believes that existing cash, cash equivalents, together with any cash generated from operations will be sufficient to meet normal operating requirements including capital expenditures for the next twelve months.

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

								October 31, 2008
	October 31, 2008			Adjustments				Restated			April 30, 2008
ASSETS

Current assets
Cash	$	624,324		$	-			$	624,324		$	12,167
Accounts receivables		4,380,597			-				4,380,597			3,003,170
Inventory		262,573			-				262,573			101,679
Deferred financing cost		-			-				-			97,500
Costs in excess of billings		82,512			-				82,512			198,655
Prepaid and other current assets		164,790			-				164,790			234,645

Total current assets		5,514,796			-				5,514,796			3,647,816

Fixed assets		1,779,952			-				1,779,952			183,926
Intangible assets		1,754,908			-				1,754,908			845,332
Goodwill		9,066,248			(192,494	)	(5)		8,873,755			5,904,782


Total assets	$	18,115,904		$	(192,494	)		$	17,923,411		$	10,581,856

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	3,707,986		$	-			$	3,707,986		$	1,746,889
Accrued liabilities		271,465			634,707		(4)		906,172			849,346
Short term debt, net of unamortized discount of $2,715,728 and
$845,095, respectively		6,348,337			(1,920,826	)	(2)		4,427,511			2,370,442
Short term debt - related parties		1,927,752			-				1,927,752			3,358,323
Derivative liabilities		-			5,176,953		(1)		5,176,953			1,312,768
Deferred income		519,172			-				519,172			403,792

Total current liabilities		12,774,712			3,890,834				16,665,546			10,041,560

Long term debt - related parties		117,716			-				117,716			142,532

Total liabilities		12,892,428			3,890,834				16,783,262			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000 shares authorized; 1,500,000 and 4,951,000 issued and outstanding, respectively		1,500			-				1,500			4,951
Common stock, $0.001 par value; 750,000,000 and 150,000,000 shares authorized; 49,011,574 and 30,000,000 shares outstanding, respectively		48,540			472		(6)		49,012			30,000
Additional paid-in capital		7,246,495			(1,512,294	)	(3),(6)		5,734,201			2,904,602
Accumulated deficit		(2,073,059	)		(2,571,505	)	(7)		(4,644,564	)		(2,541,789	)

Total stockholders' equity		5,223,476			(4,083,327	)			1,140,149			397,764

Total liabilities and stockholders' equity	$	18,115,904		$	(192,493	)		$	17,923,411		$	10,581,856

(1) To record derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record reduction in additional paid-in capital as a result of reclassification of put warrants to liabilities

(4) To record accrued liabilities that were previously unrecorded and to reclass accrued interest from notes payable

(5) To record reduction in goodwill from change in fair value of preferred stock

(6) To record shares issued for services that were previously unrecorded

(7) To record additional net loss as a result items above

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ending October 31, 2008 and 2007

								2008
	2008			Adjustments				Restated			2007

REVENUES	$	6,781,040		$	-			$	6,781,041		$	90,954

Cost of revenues		(4,956,556	)		-				(4,956,558	)		(65,255	)
Operating expenses		(1,615,338	)		-				(1,585,714	)		(142,620	)

OPERATING INCOME		209,146			-				238,769			(116,921	)

Other income (expense):
Gain/(loss) on derivative liabilities		-			(1,729,131	)	(1)		(1,729,131	)		-
Interest expense		(516,360	)		(33,930	)	(2)		(550,290	)		(127,163	)

NET LOSS	$	(307,214	)	$	(1,763,061	)		$	(2,040,652	)	$	(244,084	)

Basic and diluted loss per share:

Weighted average common shares outstanding		48,532,860			478,714		(4)		49,011,574			1,814,660

Loss per share	$	(0.01	)	$	(0.04	)	(3)	$	(0.04	)	$	(0.13	)

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record additional net loss as a result items above

(4) To record issuance of common stock previously unrecorded

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ending October 31, 2008 and 2007

								2008
	2008			Adjustments				Restated			2007

REVENUES	$	12,673,355						$	12,673,356		$	476,066

Cost of revenues		(8,996,785	)		-				(8,996,787	)		(210,518	)
Operating expenses		(2,902,685	)		(76,757	)	(3)		(2,979,442	)		(295,731	)

OPERATING INCOME		773,885							697,127			(30,183	)

Other income (expense):
(Gain)/loss on derivative liabilities		-			(1,741,569	)	(1)		(1,741,569	)		-
Interest expense		(779,283	)		(279,050	)	(2)		(1,058,333	)		(175,998	)

NET LOSS	$	(5,398	)	$	(2,097,376	)		$	(2,102,775	)	$	(206,181	)

Basic and diluted loss per share:

Weighted average common shares outstanding		48,532,860			221,460		(5)		48,754,320			36,293,200

Loss per share	$	(0.00	)		(0.04	)	(4)	$	(0.04	)	$	(0.01	)

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for liability previously unrecorded

(4) To record additional net loss as a result items above

(5) To record issuance of common stock previously unrecorded

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED OCTOBER 31, 2008

Net revenues increased from $90,954 in the three-month period ending October 31, 2007 to $6,781,041 for the three-month period ending October 31, 2008. This is due to the revenues from the newly-acquired Desert Communications and Trakkers.

Operating expenses increased from $146,620 for the three months ending October 31, 2007 to $1,585,714 for the same period in 2008. This was mainly due to the expenses from the newly-acquired Desert Communications and Trakkers.

Net loss from continuing operations increased from $244,084 for the three months ending October 31, 2007 to $2,040,652 for the same period in 2008. This is due to the interest expense from the newly-acquired Desert Communications and Trakkers.

RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED OCTOBER 31, 2008

Net revenues increased from $476,066 in the three-month period ending October 31, 2007 to $12,673,356 for the three-month period ending October 31, 2008. This is due to the revenues from the newly-acquired Desert Communications and Trakkers.

Operating expenses increased from $295,731 for the three months ending October 31, 2007 to $2,979,442 for the same period in 2008. This was mainly due to the expenses from the newly-acquired Desert Communications and Trakkers.

Net income from continuing operations decreased from ($206,181) for the three months ending October 31, 2007 to $(2,102,775) for the same period in 2008. This is due to interest expense from the new acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operations for the six month period ended October 31, 2008 was $2,115,237, as compared to cash provided by operations of $506,157 for the six months ended October 31, 2007. The change is primarily due to the acquisition of Desert and Trakkers. Cash used in investing activities for the six month period ended October 31, 2008 was $2,651,286, as compared to $427,215 for the six months ended October 31, 2007. The change was due to acquisitions. Cash provided by financing activities for the six month period ended October 31, 2008 was $1,148,206, as compared to $76,899 used for the six months ended October 31, 2007. The change was due to significant loans obtained during this year.

Our operating activities for the six months ended October 31, 2008, have generated adequate cash to meet our operating needs. As of October 31, 2008, we had cash and cash equivalents totaling $624,324, and accounts receivable of $4,380,597.

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

								January 31, 2009
	January 31, 2009			Adjustments				Restated			April 30, 2008
ASSETS

Current assets
Cash	$	316,805		$	-			$	316,805		$	12,167
Accounts receivables, net of reserve		3,197,010			-				3,197,010			3,003,170
Inventory		558,681			-				558,681			101,679
Deferred financing costs		-			-				-			97,500
Costs in excess of billings		167,740			-				167,740			198,655
Prepaid and other current assets		142,798			-				142,798			234,645

Total current assets		4,383,034			-				4,383,034			3,647,816

Fixed assets, net of depreciation		1,761,173			-				1,761,173			183,926
Intangible assets, net of amortization		1,558,348			-				1,558,348			845,332
Goodwill		9,066,249			192,494		(5)		8,873,755			5,904,782

Total assets	$	16,768,804		$	192,494			$	16,576,310		$	10,581,856

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	2,019,477		$	-			$	2,019,477		$	1,746,889
Accrued liabilities		372,437			643,924		(4)		1,016,361			849,346
Short term debt, net of unamortized discount of $2,578,129
and $845,095, respectively		7,038,438			(1,963,309	)	(2)		5,075,129			2,370,442
Short term debt - related parties		1,916,155			-				1,916,155			3,358,323
Derivative liabilities		-			5,153,339		(1)		5,153,339			1,312,768
Deferred income		503,576			-				503,576			403,792

Total current liabilities		11,850,083			3,833,954				15,684,037			10,041,560

Long term debt - related parties		122,716			-				122,716			142,532

Total liabilities		11,972,799			3,833,954				15,806,753			10,184,092

Stockholders' equity
Convertible preferred stock, $0.001 par value; 25,000,000 shares authorized; 1,500,000 and 4,951,000 issued and outstanding, respectively		1,500			-				1,500			4,951
Common stock, $0.001 par value; 150,000,000 shares authorized; 49,011,574 and 30,000,000 shares outstanding, respectively		48,540			472		(6)		49,012			30,000
Additional paid-in capital		7,246,495			(1,512,294	)	(3),(6)		5,734,201			2,904,602
Accumulated deficit		(2,500,530	)		(2,514,626	)	(7)		(5,015,156	)		(2,541,789	)

Total stockholders' equity		4,796,005			(4,026,448	)			769,557			397,764

Total liabilities and stockholders' equity	$	16,768,804		$	(192,494	)		$	16,576,310		$	10,581,856

(1) To record derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record reduction in additional paid-in capital as a result of reclassification of put warrants to liabilities

(4) To record accrued liabilities that were previously unrecorded and to reclass accrued interest from notes payable

(5) To record reduction in goodwill from change in fair value of preferred stock

(6) To record shares issued for services that were previously unrecorded

(7) To record additional net loss as a result items above

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended January 31, 2009 and 2008 (unaudited)

								2009
	2009			Adjustments				Restated			2008


REVENUES	$	5,338,688		$	-			$	5,338,688		$	1,018,853

Cost of revenues		(3,249,600	)		-				(3,249,600	)		(676,320	)
Operating expenses		(1,953,461	)		-				(1,953,461	)		(782,759	)

OPERATING INCOME (LOSS)		135,627			-				135,627			(440,226	)

Other income (expense):
(Gain)/loss on derivative liabilities		-			247,976		(1)		247,976			-
Interest expense		(576,198	)		(191,092	)	(2)		(767,290	)		(252,729	)
Interest income		134			-				134			-
Other income		12,961			-				12,961			-

NET INCOME (LOSS)	$	(427,476	)	$	56,884			$	(370,592	)	$	(692,955	)

Weighted average common shares		48,387,680			623,894		(4)		49,011,574			30,000,000


Basic and diluted loss per share:	$	(0.01	)	$	0.00		(3)	$	(0.01	)	$	(0.02	)

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record net income from the items above

(4) To record issuance of common stock previously unrecorded

INOVA TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine months ended January 31, 2009 and 2008 (unaudited)

								2009
	2009			Adjustments				Restated			2008


Revenues	$	18,012,044		$	-			$	18,012,044		$	1,494,919

Cost of revenues		(12,246,387	)		-				(12,246,387	)		(886,838	)
Operating expenses		(4,857,654	)		(76,762	)	(3)		(4,934,416	)		(1,097,340	)

OPERATING INCOME (LOSS)		908,003			(76,762	)			831,241			(489,259	)

Other income (expense):
(Gain)/loss on derivative liabilities		-			(1,493,593	)	(1)		(1,493,593	)		-
Interest expense		(1,355,480	)		(470,143	)	(2)		(1,825,623	)		(409,877	)
Interest income		1,647			-				1,647			-
Other income		12,961			-				12,961			-

NET INCOME (LOSS)	$	(432,869	)	$	(2,040,498	)		$	(2,473,367	)	$	(899,136	)

Basic and diluted loss per share:
Weighted average common shares		48,142,320			740,172		(5)		48,882,492			30,000,000
Net Loss Per share		(0.01	)		(0.04	)	(4)	$	(0.05	)	$	(0.03	)

(1) To record change in fair value of derivatives liabilities resulting from reclassification of put warrants

(2) To record additional debt discount amortization as a result of derivative liabilities resulting from reclassification of put warrants

(3) To record expense for liability previously unrecorded

(4) To record additional net loss as a result items above

(5) To record issuance of common stock previously unrecorded

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED JANUARY 31, 2009

Net revenues increased from $1,018,853 in the three-month period ending January 31, 2008 to $5,338,688 for the three-month period ending January 31, 2009. The increase in revenue mainly came from the income generated by the newly-acquired Desert Communications and Trakkers.

Cost of sales increased from $676,320 in the three-month period ending January 31, 2008 to $3,249,600 for the three-month period ending January 31, 2009. The increase came from the revenue generated by the newly-acquired Desert Communications and Trakkers.

Operating expenses increased from $782,759 for the three months ending January 31, 2008 to $1,953,461 for the same period in 2009. This was mainly due to the expenses incurred by the newly-acquired Desert Communications and Trakkers.

Net loss from continuing operations decreased from ($692,955) for the three months ending January 31, 2008 to ($370,592) for the same period in 2009. This is due to the profit generated from the newly-acquired Desert Communications and Trakkers.

RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED JANUARY 31, 2009

Net revenues increased from $1,494,919 in the three-month period ending January 31, 2008 to $18,012,044 for the three-month period ending January 31, 2009. The increase in revenue mainly came from the income generated by the newly-acquired Desert Communications and Trakkers.

Cost of sales increased from $886,838 in the nine-month period ending January 31, 2008 to $12,246,387 for the nine-month period ending January 31, 2009. The increase came from the revenue generated by the newly-acquired Desert Communications and Trakkers.

Operating expenses increased from $1,097,340 for the three months ending January 31, 2008 to $4,934,416 for the same period in 2009. This was mainly due to the expenses incurred by the newly-acquired Desert Communications and Trakkers.

Net loss from continuing operations increased from ($899,136) for the three months ending January 31, 2008 to $(2,473,367) for the same period in 2009. This is due to the interest from the newly-acquired Desert Communications and Trakkers.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operations for the nine month period ended January 31, 2009 was $1,318,696, as compared to cash provided by operations of $1,180,644 for the nine months ended January 31, 2008. This change is primarily due to the income generated from Desert and Trakkers’ operations. Cash used in investing activities for the nine month period ended January 31, 2009 was $2,651,286, as compared to $4,052,215 for the nine months ended January 31, 2008. This change was because of the money spent by the Company for the business acquisitions. Cash provided by financing activities for the nine month period ended January 31, 2009 was $1,637,228, as compared to $3,144,411 used for the nine months ended January 31, 2008. This change was due to several significant loans obtained by the Company in the prior comparative period.

Our operating activities for the nine months ended January 31, 2009, have generated adequate cash to meet our operating needs. As of January 31, 2009, we had cash and cash equivalents totaling $316,805, and accounts receivable of $3,197,010.

Inova Technology Inc. - FORM 10-K/A - April 19, 2011

Attached files

Inova Technology Inc. Reports