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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

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FORM 10-KSB/A



[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended June 30, 2005, Restated



[   ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934



Commission File Number 0-29746



INNOVA PURE WATER, INC.

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(Exact name of registrant as specified in charter)





|Florida                                                        | 59-2567034                           
|-------------------------------------------------------------- | -------------------------------------
|-------------------------------------                          | -------------------------------------
|(State or other jurisdiction
of incorporation or organization) | (IRS Employer
Identification No.)    
|                                                               |                                      
|4951 Airport Parkway, Suite 500, Addison, Texas                | 75001                                
|-------------------------------------                          | -------------------------------------
|(Address of principal executive offices)                       | (Zip Code)                           





Registrants telephone number, including area code:

(972) 980-0486



Securities registered pursuant to Section 12(b) of the Exchange Act: None



Securities registered pursuant to Section 12(g) of the Exchange Act, Common Stock, par value $.0001



Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or 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] No



Check if no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy of 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

[X] No



State issuers revenues for its most recent reporting period June 30, 2005..None



Aggregate market value of the voting stock held by non-affiliates of the registrant at June 30, 2005 was $715,771.



The number of shares of the Issuers Common Stock, par value $.0001 outstanding as of June 30, 2005 was 34,559,236.



Transitional Small Business Disclosure Format [   ]  Yes

[X]  No



13130- 56th Court, Suite 609, Clearwater, Florida 33760

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(Former name or former address, if changed since last report)

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INNOVA PURE WATER, INC.

FORM 10-KSB - INDEX



Part I



Item 1.

Description of Business



Item 2.

Description of Property



Item 3.

Legal Proceedings



Item 4.

Submission of Matters to a Vote of Security Holders



Part II



Item 5.

Market for Common Equity and Related Stockholder Matters



Item 6.

Managements Discussion and Analysis



Item 7.

Financial Statements



Item 8.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures



Item 8A.

Controls and Procedures



Part III



Item 9.

Directors and Executive Officers of the Registrant



Item 10.

Executive Compensation



Item 11.

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



Item 12.

Certain Relationships and Related Transactions



Item 13.

Exhibits



Item 14.

Principal Accountant Fees and Services



Signatures



Certifications





INNOVA PURE WATER, INC.

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This Annual Report on Form 10-KSB and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about Innova Pure Waters industry, management beliefs, and assumptions made by management. Words such as "anticipates," "expects," "intends," "plans,"  "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements.



PART I



ITEM 1.

DESCRIPTION OF BUSINESS



Background  Recent Acquisitions



Innova Pure Water, Inc. a Florida corporation (the "Company" "we", "us" or "Innova") was incorporated August 13, 1985.  Effective June 27, 2005, the Company entered into two Stock Acquisition Agreements. One Stock Acquisition Agreement was with DesertView Management Services, Inc., an Arizona Corporation ("DesertView"). The other was with Numera Software Corporation, a Washington corporation ("Numera").  In the Numera transaction, the Company issued 16,600,000 shares of its Common Stock to the shareholders of Numera in consideration for 100% of the issued and outstanding shares of Numera stock.  In the DesertView transaction, the Company issued 2,500,000 shares of its Common Stock to the shareholders of DesertView in consideration for 100% of the issued and outstanding shares of DesertView stock.  In connection with the closing of these transactions, the Company received $112,000 of working capital advances from affiliates of DesertView and Numera to meet its short-term obligations.



As a result of the DesertView and Numera transactions, both DesertView and Numera became wholly-owned subsidiaries of the Company.  However, the acquisition of Numera has been deemed by management, after several months of analysis and deliberations, to meet the accounting requirements of a Reverse Acquisition, and accordingly, for accounting purposes, the revenues and expenses, and the equity presentations herein reflect only those of Numera, which is deemed the acquiring entity.  The Reverse Acquisition accounting treatment was based on the facts that Numera was issued approximately 48% of the outstanding shares as of June 30, 2005, and the company was relocated from Florida to Texas, where Numera was located, and the number of new directors appointed exceeded the number of directors who remained from the previous Innova board.



Further details of this accounting treatment are contained in the Notes to Financial Statements in Item 7, and in Item 8, Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.



In connection with the Stock Acquisition Agreements with Numera and DesertView, David L. Zich, John L. Finan, Randal McClanahan, Jim R. Davisson, and David Paul Condra joined Jack Nohren and Rose Smith as directors of Innova. In addition, David L. Zich becomes President and Jim R. Davisson Secretary/Treasurer of Innova.  Innova has relocated its corporate offices from Clearwater, Florida to Addison (Dallas), Texas.



To date, Numera and DesertView have generated nominal revenues.  As more fully explained in Footnote 14 to the Financial Statements, Numera has net assets of approximately $846,600, which are comprised primarily of fixed assets and software and Innova has recorded net assets of approximately $127,600 from DesertView, which is comprised primarily of goodwill.  Approximately $69,700 of liabilities were brought into the company in connection with the acquisitions of DesertView and Numera.



Because the acquisitions were deemed to occur as of June 27, 2005 the Consolidated Statement of Operations reflect nominal amounts attributable to the operations of DesertView.  The Consolidated Statement of Operations for the first quarter of fiscal year ended June 30, 2006 will include a full quarter of operations on a consolidated basis for Innova, DesertView and Numera.



Numera Software Corporation



Numera Software Corporation, a Washington corporation ("Numera") provides small to mid-sized businesses with full-featured, easy-to-use, real-time accounting software systems that meet or exceed the performance characteristics of mid to high-end competitors, at significantly lower cost.



Numeras products are designed to provide both front and back office functionality for a wide variety of business types.  Many competitive systems serve only a specific vertical market, such as Healthcare or Construction.  Other major competitors perform only limited functionality, such as client billing, without providing payroll, accounts payable and general ledger.  Numera believes the broad scope of performance of its products allows Numera to stock, learn and support a smaller number of products to reach and service a larger number of prospective customers



The founding CPAs and attorneys of Numera knew from first hand experience that competitive accounting software solutions were too expensive, too slow, and too complicated to use.  These individuals have made significant progress researching the market and building a design for a better solution and developing a marketing plan consisting of creating large VARs (Value Added Resellers) in the major US markets.



To date, the company has completed the development phase, and set up the procedures for recruiting, training and managing the VARs who will provide the sales, marketing, and service functions for the system.  The accounting market is generally segmented by size of business, as follows:



*

SOHO (Small Office, Home Office) and emerging businesses.  Users in this segment purchase easy-to-use windows-based accounting software, primarily through retail channels of distribution, at prices below $500.  They are often first-time users of accounting software.



*

Small Business.   Small Businesses, as classified by accounting analysts and trade magazines, range in annual revenues from $1 million to $50 million, and from 5 to 500 employees.  These users purchase accounting software through several channels of distribution, including retail, direct, and VAR channels, at prices ranging from $50 to $30,000.



*

Medium-Size Businesses.   Medium-size businesses range in size from $50 million to $300 million.  This market is often referred to as the market for mid-range accounting systems.  The majority of accounting software sold to these customers is sold in modules through the VAR (Value Added Reseller) channel at prices over $30,000.



The primary focus initially of the Numera suite of products is on Small Businesses with revenues in the $1 million to $50 million range, where there is a wide range of software prices.Numeras powerful, easy-to-use system is designed to accommodate the rapid growth and economic evolution of businesses in this market.  Numeraproducts include specialized functions for several vertical markets that are dominant in the Small Business segment such as attorneys, accountants, building contractors, service organizations, architects, engineers, light manufacturing facilities, restaurants and clubs, retailers, government contractors, and consultants.The company expects to compete in this market by offering prospective customers:



*

An affordable product that is specifically designed for their needs at a price that is up to 70% lower than currently available mid-range accounting systems with comparable features.



*

The ease of use and a GUI commonly associated with simple, retail accounting packages such as QuickBooks.



*

Fully integrated, multi-user modules that assist in the management and productivity of the business and its personnel, including contact management, scheduling, time tracking, project management and task management functions.



*

A high-volume, upgrade-able, real-time, date sensitive, multi-user system that is based on the latest 32-bit software technology.



•

Custom conversion services provided by Numera VARs to convert their existing data to the new Numera system either manually or electronically.



Innova Pure Water, Inc.



Innova Pure Water, Inc. was incorporated on August 13, 1985.  We design, develop, manufacture, and market unique consumer water filtration and treatment products.  These products have been historically of the portable nature and generally consist of a container serving as a water reservoir incorporating highly efficient water filtering and treatment technology.



We hold in excess of 40 patents, issued or pending, directly associated with water treatment and purification which provide competitive advantages.  Since December 2002 Innova has been supplying Nikken, Inc with its Sport Filter bottle products incorporating Nikkens exclusive PiMag additive. We are currently in the process of proposing additional water treatment products for Nikken.



Our water filtration products are designed to provide an improved quality and better tasting water at an affordable price. The products initially produced by us were designed to treat tap water, reducing chlorine, lead, taste and odor.  Within the past four years our emphasis has shifted to products which also remove bacteria and protozoea while retaining the capability for the removal of specific chemical contents.



We believe that as a result of the diminishing quality of tap water, both domestically and world wide, the opportunities for the application of our water filtration products and technology will continue to grow for a number of years.  The water filter market continues to grow, reflecting consumer desire for effective and efficient portable filtration devices.



The retail customer base for our products consists of mass merchandisers, outdoor retailers, sporting goods stores as well as a wide range of markets seeking products eliminating biological contaminants from naturally occurring surface water. This also constitutes the basic domestic market universe of strategic alliance partners that typically have wide distribution in retail stores and the outdoor, humanitarian, emergency, and international traveler markets. While there is no assurance that Innova's products will be purchased by retail customers, we hope to be a substantial participant in the alternative to bottled drinking water market as the market for water treatment products increase.



In order to overcome the lack of capital to adequately support a national sales program, our strategy will be to create strategic alliances with nationally recognized companies. If we are successful in entering into such strategic alliances, we hope to obtain the distribution and sales of our products on a national and international basis without incurring the sales and marketing costs usually associated with the sales of consumer products.



In addition to the sales of products either directly or through strategic alliance partners, we may seek to license our technology to specific products to competitive companies allowing them to sell products utilizing our technology in return for license fees and royalty payments. In this regard, Innova has licensed the Brita Products Division of Clorox and Seychelle Environmental to produce and market specific products under license.  We have also entered into a license agreement with Sawyer Products to market products using our patents.  Sawyer Products, in conjunction with two ex-Innova employees, has failed to honor Sawyers contract obligations to us and has begun the independent production of products based upon products and knowledge gained from Innova. We have brought an action against Sawyer seeking compensation under our agreement.  Sawyer is alleging we breached our agreement.  Such litigation is in its early stages and the outcome of such litigation remains uncertain.



In connection with a Licensing, Product Supply and Strategic Alliance Agreement we entered into with CamelBak on July 15, 2002, we granted CamelBak a worldwide (specifically excluding Japan and France) exclusive license to market and distribute Innova in-line biological-chemical filters for use with hydration packs to the military and after markets currently serviced by CamelBak.  The initial order from CamelBak was for 10,000 filtration units.  CamelBak paid us an exclusive initial distribution fee of $50,000.  The exclusivity of this license expired in July 2004 because CamelBak failed  to meet its minimum purchasing requirements.  Subsequently, in the current fiscal year, CamelBak purchased an additional 8,000 hydration pack biological filtration systems from us.  Although CamelBak has purchased product from us subsequent to termination of its license, we  will seek additional lines of distribution for this product.



DesertView Management, Inc.



DesertView Management Services, Inc. ("DesertView") is an Arizona based corporation that provides professional management consulting and IT services on a business to business basis.  The company was incorporated in late 1998.



DesertViews primary objective is to enhance the ability of small to medium sized businesses to produce higher profit levels through full utilization of their Information Technology (IT) resources.  The companys focus is to achieve a change in its clients management strategies which will produces an increase in profitability through growing, and at times restructuring their IT infrastructure.



DesertView trains and directs owners and managers of its clients businesses, to enter use and extract data in a way that will provide springboards for their profit increases.  DesertViews mission is to provide economical entry point software for operations and accounting use and train our clients personnel to use and support their software purchase successfully.



CURRENT PRODUCTS



Numera Software Corporation



Numera PXTM (Profit Express) is a broad-based, flexible, growth-oriented, real-time, enterprise management and accounting system.  Designed for virtually any type of small to medium-sized business, Profit Express is packaged in six Editions.  Each Edition contains components and sub-routines of particular interest to the targeted business segment.



The Business Edition of Profit Express is suited for all types of sales, service, manufacturing and distribution businesses that require inventory or point-of sale processing.  Attorneys, architects, engineers and consultants who charge clients for their time and bill by hourly, weekly or monthly rates that vary based on the service or the service provider are the clients who would most readily utilize our Professional Edition. Our CPA Edition was designed for CPA firms who, in addition to office management and time and billing, must interface with a large variety of business clients when providing accounting services.  As a companion, we offer our CPA-Client Edition for our CPA clients who need to perform on-site specific functions, such as payroll or accounts payable, while the CPA provides comprehensive financial reporting.  Construction and project oriented companies requiring job costing and job estimating in addition to other sales and inventory applications are prospects for our Construction Edition. Our Service Edition is designed for use by companies involved in repair and maintenance services, including electrical, plumbing, swimming pool, appliances, landscape and security.



Innova Pure Water, Inc.



All Innova products are patent protected under one or more issued or pending patents. Additional patents are also pending. See "Business-Intellectual Property."  The following products are currently available to the market and potentially available for licensing:



1.

A 16 oz. standard 28 mm neck PET water bottle with replaceable filter, "A Filter" and a push-pull valve cap;±

2.

A 16 oz. LDPE sport type bottle with "B Filter" with a push-pull valve cap.

3.

A 27 oz. LDPE sport type bottle with a "B Filter" with a push-pull valve cap.

4.

Replacement filters "A", "B" chlorine removal, and "B" lead and chlorine removal for installation into Rubbermaid, Sawyer, Avon, Culligan, and Innova WaterWayÒ sport type bottles.

5.

A dual filter biological and chlorine/lead removal sport type bottle.

6.

An in-line combination bacteria/protozoa and chlorine/lead removal filter for hydration packs and container-to-container filtration and water treatment applications.

7.

And selected products produced exclusively for Nikken.



DesertView Management Services, Inc.



DesertView has developed a strategic alliance with a manufacturing software developer, Software Arts of San Jose CA, USA, who have written and sells pcMRP Software that allows DesertView to provide implementation and training to its clients across the USA.  The alliance between the two companies is exclusive by mutual agreement and is the main source of leads for sales of DesertViews products.



DesertView is also a designated reseller of Software Arts software products that are designed for use in small to medium businesses.  Much of our growth is focused on expanding that relationship both on the consulting and resale sides of the business as well as adding VAR services to its pallet of offerings



The number of clients served by DesertView over the past 5 years surpasses 100.  Typical annual revenues of the clients served by DesertView is about $7.5MM per year, however the largest client is a medical device manufacturer located on Long Island NY whose annual revenues exceed $75MM, and the smaller clients served have revenue streams of less than $1.0MM per year.



Typically, an implementation and training session for the software pcMRP will consist of an initial 3-5 day session with follow-up sessions as required.  Our costs to implement and train fall into the industry average of 5-7 times the cost of the software when the training is provided on site.  Our rates for training are $1000 per day, with the initial day charged at $1500 to cover travel days before and after the sessions.  All travel costs and per diem rates are covered by the client.



Recent improvements in remote training using conferencing software and the internet have made training possible via remote sessions offering a more cost effective solution for the companies we serve.  We see this as the direction many of our clients will want to go allowing more of their budgets to be directly applied to their training and implementation services, rather than travel and travel related expenses.



There are two driving forces for new business for DesertView. First, personnel who continually change employers is a fact of American business today, forcing the company to continually train new personnel.  The company will look to a proven entity, such as DesertView, to train their people Second, the pcMRP software, like all software products, periodically releases new versions to increase sales and improve the product. Each time an upgrade is sold, DesertView is notified, thereby providing us with an opportunity to sell our services.



In addition to the out-of-the-box version of the software, DesertView has the ability to create custom add-ons to the existing product, subject to the approval of Software Arts.  This creates a revenue stream separate from the main implementation revenues, and while it is currently not a large part of our total revenue picture, we believe that it has the potential to provide significant revenues in the future.



PRODUCT DEVELOPMENT



Numera Software Corporation



Numera has an ongoing program to update and improve its product.  This is done for its clients through a quarterly update of their software.  Additionally as custom changes are made for new and existing clients, these are passed along to the client base through the quarterly updates.



Innova Pure Water, Inc.



The ability of Innova to actively engage in new product development, and the application of new and emerging technology for products which will increase our value to both strategic alliance partners and investors as well as for direct sale to specific markets has been limited by our lack of adequate capital.  However, as a result of prototypes completed and existing as well as pending patents the Company has recently been successful attracting the attention of larger companies with recognized market presence.  It remains too early to determine what the outcome will be relative to the interest received.



We have completed prototypes of the "System" type sports bottle and it is generating interest in one or more of the options it presents.  In the "System" approach, treatment options are arranged in a nested configuration rather than axially. This allows for higher performance and the ability to incorporate and interchange more treatment options.  Our ability to product this product depends upon our ability to secure the necessary capital to manufacture or to enter into a strategic alliance with a major Company with desired distribution channels.



Development of high performance "Static Filtration" pitcher/bottle products has been completed.  Subject to receipt of necessary capital resources, Innova intends to place products using this technology into production or to license the technology to third-parties once the distribution channels have been secured.



Although we are attempting to improve the time to market of our developmental efforts, there is no assurance that the Company will ever successfully bring these products to market.  During fiscal years ended June 30, 2005 and 2004, we spent $0 and $10,100, respectively, on formal research and product development.



SALES



Numera Software Corporation



Because of the accounting procedures applied in a reverse acquisition, Numera Software Corporation, being the acquiring company of Innova Pure Water, Inc., is the accounting entity for the reporting of revenues and expenses for the fiscal years ended June 30, 2005, and June 30, 2004.  Numera Software Corporation had no revenues for the fiscal year ended June 30, 2005 or June 30, 2004.  The company had not yet completed the development of its software system and established a sales staff to sell the software.



Delays in the completion and introduction of our software system, caused primarily by the lack of adequate funds for programming personnel, have been gradually overcome to the point where management believes that the software is ready for sale as of July 1, 2005.  Establishment of a marketing group and increasing sales of the software will be contingent upon funding for the development of an expanding sales network.



In order to minimize the out-of-pocket costs of building a national sales organization within the company, Numera has elected to utilize a network of distributors to sell and support its software system.  This approach is typical in the accounting and business management software industry for small to medium-sized businesses, and is used by virtually all of the competitors who sell and support mid-range accounting systems.  To implement this sales strategy, the Numera Software Corporation has begun the process of recruiting resellers or distributors of its software, and has established a reseller in Dallas/Ft. Worth, Texas who has begun sales activities.  The company is actively seeking other distributors around the country.



COMPETITION



Numera Software Corporation



Competition in the accounting software arena is intense.  Companies such as SAP, PeopleSoft, and others, focus on big, comprehensive solutions at big price points for big companies and QuickBooks offers an affordable system suitable for small companies.  Other companies, such as Great Plains and Peachtree focus on mid-size companies.  Numera believes that its products bridges the price and functionality gap with software solutions that are sophisticated enough for CPAs, yet scalable to the broad range of expertise exhibited in the universe of small to mid-sized businesses.  Most of Numeras competitors have greater financial and other resources than those currently available to Numera.



Numera believes that none of its competitors in the small and mid-size market offer all the features of Numera, but instead rely on third-party systems to provide much of their functionality.  None of them can match the timeliness or price of custom programming and reporting offered by Numera.  None of them provide a total "turn-key" solution, including software, installation, training and support.  And none of them can match Numeras capability to implement a comprehensive system to completely manage a small office for less than $10,000.



Innova Pure Water, Inc.



Innova competes with many other companies that supply water filtration products. The principal competitors non-biological product is the "pour through" carafe type product normally kept in the refrigerator and used in the kitchen.  Several companies, including Brita, Procter & Gamble (Pûr), Culligan and others compete in the pitcher or carafe products market segment. The leading company in the domestic pitcher category within the last twelve months is Clorox, selling the Brita line.



The introduction of our biological product line brings us into direct competition with products making similar claims, which are marketed by Extreme and Safe Water Anywhere. We now add our recent licensee to the list, Sawyer Products. We previously commissioned a study by an independent laboratory located at the University of South Florida whose test results have shown our product to provide superior performance under actual use conditions. Products pressurized by pump pressure and marketed by Katadyne and Mountain Safety Research are also competitive in performance while considerably more expensive.  The Innova Biological product was tested by Spectrum Laboratories, an EPA recognized independent testing laboratory, which when subjected to the full EPA protocol provided the required minimum six log reduction (99.9999%), or better.



DesertView Management Services, Inc.



The company has positioned itself with its alliance with a specific software developer which eliminates direct competition once the client has obtained the pcMRP software.  The software itself is positioned to serve the vast majority of manufacturers and distributors worldwide.  The software and our training and implementation services, are not intended for companies whose annual revenue streams exceed $100 million.



DesertView does not presently intend to provide services to companies where the competition might present itself as tier one or two software, and its corresponding consulting services.



INTELLECTUAL PROPERTY



Numera Software Corporation



Numera software is protected under U.S. copyright and trademark laws and international treaties.  All intellectual property rights in and to the Software are owned and retained by Numera.  In addition, all of Numeras source code is safeguarded both on site and off to insure the continuation of the companys ability to conduct business in the event of disaster.



In order to further safeguard the software the modules provided to the clients are only executables.  This makes the application only utilizable to the purchaser and no one else.



To date there have been no attempts to infringe on the Numera name or any of its software.



Innova Pure Water, Inc.



We currently have rights to over 40 issued or pending patents which are specifically related to consumer water treatment products.



On July 30, 1999, Innova brought an action for infringement of Innova patent #5,609,759 against Safari Water Filtration Systems, Inc. d/b/a Safari Outdoor Products of Broom Field, Colorado. Innova filed for summary judgment and the Court found in behalf of Safari, subsequently, Innova immediately filed an appeal in the Federal Court of Appeals as case 04-1097.  On August 11, 2004 the Court of Appeals overturned the lower courts decision and returned the case to the lower court.  Innova has again filed for summary judgment. On September 30, 2005, the Court issued an Order granting Innova's motion for summary judgment.  The Court adjudged that Innova's U.S. Patent 5,609,759 is valid and enforceable and that claims set forth in said patent were infringed upon by products made, used, sold or offered for sale by Safari.  Safari was permanently enjoined from making, using, selling or offering for sale in the United States any product covered under the patent's claims as more fully set forth in the Order.  Management of the Company believes the entry of this Order will have significance against other parties who may be infringing upon the Company's products and services.



On January 24, 2000, Innova brought a patent infringement suit against the Brita Products Company of Oakland, California. On February 26, 2001, this case was settled to the Companys satisfaction and the Company is currently receiving quarterly royalty payments from Brita Products resulting from the final disposition of the suit.  A non-disclosure agreement is in place in regard to this settlement.



DesertView Management Services, Inc.



Much of the work preformed by DesertView for its clients has been unique to each client served.  Where applicable, confidentiality and non-compete agreements have been executed to protect the client as well as DesertView.



MANUFACTURING



Innova Pure Water, Inc.



Currently as a means of increasing our flexibility, as well as cost containment, Innova has been subcontracting some of the assembly and shipping operations. All vendors operate under confidentiality agreements, if they are to produce new products in our behalf. Several individuals and organizations also support the Company in its product development program on an as needed basis. The Company has relied on a limited number of vendors to supply the components necessary for its products. A lack of necessary components at favorable prices would adversely affect us.



PRODUCT LIABILITY INSURANCE AND WARRANTIES



Numera Software Corporation



Numera, like other developers of large-scale software systems, warrants the software it sells only to the extent of the media on which it is delivered, and the correction of errors that may be recreated by Numera.  There are no warranties of performance, functionality, or suitability for a specific purpose.   Consequently, Numera has little or no exposure for product liability, and does not carry product liability insurance.



Innova Pure Water, Inc.



Innova maintains a $1,000,000 product liability insurance policy and a $2,000,000 umbrella excess liability policy. In the eighteen years in which we have produced and furnished products to the retail trade and consumers, both domestically and internationally, no product suits have been filed.



Innova warrants to its strategic alliance partners that the products will be produced to mutually agreeable standards. Innova operates a formal quality control program monitoring through Acceptable/Acceptance Quality Level (AQL) standards, incoming components, in process parts, and completed units. Detail product specification sheets are in place as well as "Physical Proofs" which have been signed off and accepted by both parties. In case of a question, the "Proof' samples are used for comparison purposes to determine acceptability.



EMPLOYEES



As of June 30, 2005, Numera and Desert View had approximately 8 fulltime employees.  This includes 3 executive officers, 2 administrative and clerical personnel, and 4 marketing and sales personnel.  To minimize cash expenditures, the executive duties of Numera Software Corporation were assimilated into Innova Pure Water, Inc., and the sales and administrative personnel were converted to performance-based compensation, and attached to the distributor who was recruited for the Dallas/Ft. Worth sales territory.



As of June 30, 2005, Innova had five full-time employees.  This includes its two executive officers, one administrative and clerical person, one manufacturing person and one person providing accounting support.  The manufacturing person is supplemented by contract employees, as required.  In connection with the Numera and DesertView Stock Acquisition Agreements Innova intends to shut down its Clearwater, Florida executive offices and to transfer administrative, clerical and accounting functions to Numera's Addison, Texas facilities.



ITEM 2.

DESCRIPTION OF PROPERTY



Innova occupies approximately 6,400 feet of air-conditioned office, manufacturing and warehouse space located at 13130  56th Court, Suite 607-610, Clearwater, Florida 33760.  The product development laboratory is also located in the building.  The facilities are leased and a new one-year lease commenced April 1, 2005.  The monthly rent payment for these facilities is approximately $3,600.



At June 30, 2005, Numera occupied approximately 6,000 feet of air-conditioned office space at 15851 Dallas Parkway, Suite 1200, Addison Texas 75001, a suburb of Dallas, Texas.  Subsequently, the executive offices of Innova Pure Water, Inc. were re-located to this facility. This location housed the operations of the executive, sales, and training functions for Numera, Innova, and the Numera sales distributor. The facilities were subleased commencing November 1, 2004 for a period of one year.  The monthly lease payments are approximately $4,600.



ITEM 3.

LEGAL PROCEEDINGS



Neither Numera nor DesertView are currently involved in any litigation and neither of them is aware of any pending or threatened litigation.



Innova is currently plaintiff in a patent infringement lawsuit entitled Innova Pure Water, Inc., Plaintiff v. Safari Water Filtration Systems, Inc. d/b/a Safari Outdoor Products, Defendant; Case No. 99-1781-Civ-T-23F filed by the Company on August 4, 1999.  The case was filed with the U.S. District Court, Middle District of Florida, Tampa Division.  The Company has claimed patent infringement of U.S. Patent 5,609,759 on the part of the defendants.  On December 16, 2003, the court ruled in favor of Safari.  Innova filed an appeal with the United States Court of Appeals, case No. 04-1097, who, on August 11, 2004, reversed the lower courts decision.  The case has been remanded back to the Circuit Court on September 1, 2004 to find on any remaining issues.  Innova has filed for a summary judgment or the prompt setting of a trial date.  On September 30, 2005, the Court issued an Order granting Innova's motion for summary judgment.  The Court adjudged that Innova's U.S. Patent 5,609,759 is valid and enforceable and that claims set forth in said patent were infringed upon by products made, used, sold or offered for sale by Safari.  Safari was permanently enjoined from making, using, selling or offering for sale in the United States any product covered under the patent's claims as more fully set forth in the Order.  Management of the Company believes the entry of this Order will have significance against other parties who may be infringing upon the Company's products and services.



Innova is currently a plaintiff and a cross defendant in a case captioned J. Smith and M.Danzel  v. Innova Pure Water, Inc. v. Soil Products, Inc.  Sawyer Products, Inc. v. Innova Pure Water, Inc. and J. Nohren and Rose R. Smith; Case No. 05-000538C1-07 in the Sixth Judicial Circuit Court of Pinellas County.  This case is in its early stages and it is not possible at the present time with any reasonable degree of certainty to determine the likelihood of a favorable or unfavorable outcome nor to quantify the potential exposure to Innova.



Originally, Mr. Smith and Ms. Danzel sued Innova for accrued and unpaid vacation time.  The total amount was less than $10,000.  Innova counterclaimed against the former employees and their new employer, Sawyer Products, Inc., for violation of, and interference with the former employees' covenants not to compete with Innova.  In the litigation, Sawyer Products filed a claim against Innova and certain of its officers alleging misrepresentation in connection with certain loans Sawyer made to the Company and the issuance of warrants to Sawyer.  Sawyer has also sued Innova for breach of contract.  Sawyer is seeking damages in excess of $600,000.  Innova is seeking back royalties and lost profits, as well as damages, including punitive damages.  Management of Innova believes it has meritorious defenses and intends to vigorously defend the claims and pursue Sawyer and its principals.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



PART II



ITEM 5.

MARKET PRICE OF THE REGISTRANTS SECURITIES AND RELATED STOCKHOLDER MATTERS



Our Common Stock is traded in the over-the-counter market in the so called "pink sheets," or on the "Electronic Bulletin Board" of the National Association of Securities Dealers, Inc. (the "NASD") under the symbol "IPUR.OB" The transfer agent and registrar for the Common Stock is Continental Stock Transfer & Trust Company of New York. The following table sets forth, for the periods indicated, the high and low sales price for shares of the Common Stock as reported on the OTC.



|                                                                                                                                                                                     | Sales Price                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------
|                                                                                                                                                                                     | High                                             
|FISCAL YEAR ENDED JUNE 30, 2004
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

FISCAL YEAR ENDED JUNE 30, 2005
Fourth Quarter
Third Quarter
Second Quarter
First Quarter | 0.070
0.330
0.250
0.060


0.080
0.070
0.100
0.140



Our Common Stock is not listed on NASDAQ, but is traded in the over-the-counter market on the "Electronic Bulletin Board" of the National Association of Securities Dealers, Inc. (the "NASD"). Accordingly, an investor may find it more difficult to dispose of, or obtain accurate quotations as to the market value of the common stock. Further, in the absence of a security being quoted on NASDAQ, a market price of at least $5.00 per share or the Company having in excess of $2,000,000 in net tangible assets, trading in the Company's securities may be covered by a Securities and Exchange Commission ("SEC") rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchasers' written agreement to the transaction prior to the sale. Consequently, the rule affects the ability of broker-dealers to sell the Company's securities and also may affect the ability of shareholders to sell their securities in the secondary market.



Previously, the SEC adopted seven rules ("Rules") under the Securities Exchange Act of 1934 requiring broker/dealers engaging in certain recommended transactions with their customers in specified equity securities falling within the definition of "penny stock" (generally non-NASDAQ securities priced below $5.00 per share) to provide to those customers certain specified information.



Unless the transaction is exempt under the Rules, broker/dealers effecting customer transactions in such defined penny stocks are required to provide their customers with: (1) a risk disclosure document; (2) disclosure of current bid and ask quotations, if any; (3) disclosure of the compensation of the broker/dealers and its sales person in the transaction; and (4) monthly account statements showing the market value of each penny stock held in the customer's account.



As a result of the aforesaid rules regulating penny stocks, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of shareholders to sell their securities in the secondary market



Recent SEC and NASD revisions and interpretations of Rule 15c2-11 require us to maintain our status as a reporting company under Section 12(q) of the Securities Exchange Act of 1934.  Our failure to timely file annual, quarterly or other reports may affect our ability to maintain listing in the OTC "Electronic Bulletin Board".



We have not paid any cash dividends on our common or preferred stock and do not anticipate paying any such cash dividends in the foreseeable future. Earnings, if any, will be retained to finance future growth.  We may issue shares of our common stock and preferred stock in private or public offerings to obtain financing, capital or to acquire other businesses that can improve our performance and growth.  Issuance and or sales of substantial amounts of common stock could adversely affect prevailing market prices in our common stock.



As of June 30, 2005 there were approximately 450 beneficial owners of our common stock with 34,559,236 shares outstanding.



ITEM 6.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



IMPORTANT NOTE ABOUT FORWARD-LOOKING STATEMENTS



The following discussion and analysis should be read in conjunction with our audited financial statements as of June 30, 2005 and the notes thereto, all of which financial statements are included elsewhere in this form 10-KSB.  In addition to historical information, the following discussion and other parts of this Form 10-KSB contain forward-looking information that involves risks and uncertainties.  Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under "Business" and elsewhere in this Form 10-KSB.



The statements that are not historical constitute "forward-looking statements".  Said forward-looking statements involve risks and uncertainties that may cause the actual results, performance or achievements of Innova to be materially different from any future results, performance or achievements, express or implied by such forward-looking statements.  These forward-looking statements are identified by their use of such terms and phrases as "expects", "intends", "goals", "estimates", "projects", "plans", "anticipates", "should", "future", "believes", and "scheduled".



The variables which may cause differences include, but are not limited to, the following:  general economic and business conditions; competition; success of operating initiatives; ability to protect our patents and intellectual property; success of our joint venture and strategic alliance efforts; market acceptance of our water purification products; operating costs; advertising and promotional efforts; the existence or absence of adverse publicity; changes in business strategy or development plans; the ability to retain management; availability, terms and deployment of capital; business abilities and judgment of personnel; availability of qualified personnel; labor and employment benefit costs; availability and costs of raw materials and supplies; and changes in, or failure to comply with various government regulations.  Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this Form 10-KSB will prove to be accurate.



In light of the significant uncertainties inherent in the forward-looking statements included herein the inclusion of such information should not be regarded as a representation by the Company or any person that the objectives and expectations of the Company will be achieved.



SELECTED FINANCIAL DATA



The following financial data is derived from and should be read in conjunction with the "Consolidated Financial Statements and notes thereto.  Information concerning significant trends in the financial condition and results of operations is contained in "Managements Discussion and Analysis of Financial Condition and Results of Operations."  The selected financial data set forth below reflects only nominal amounts attributable to the operations of DesertView, and, because of the election to account for the acquisition of Numera as a Reverse Acquisition, excludes all of the activity attributable to the operations of Innova.  See Footnote 14 to the Financial Statements.  The results of operations and financial statements for Innova, DesertView and Numera will be included in the future operating results and financial statements of Innova commencing in the first quarter of fiscal 2006.



SELECTED SUMMARY INCOME STATEMENT DATA

|                                          | Year Ended June 30    
|----------------------------------------- | ----------------------
|                                          | 2005                  
|Total sales revenue                       | $                    0
|Net loss                                  | (3,100)               
|Loss per common share  basic             | (0.00)                
|Shares used in per share computation      | 16,793,620            
|Loss per common share  assuming dilution | (0.00)                
|Shares used in diluted computation        | 16,793,620            



SELECTED SUMMARY BALANCE SHEET DATA

|                        | June 30, 2005
|----------------------- | -------------
|Total assets            | $ 1,297,500  
|Working capital deficit | 251,800      
|Long-term debt          | 176,700      
|Stockholders equity    | 770,100      



CRITICAL ACCOUNTING POLICIES AND ESTIMATES



The following discussion and analysis is based upon our financial statements, which have been prepared in accordance with accounting principles general accepted in the United States of America.  The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, and assets and liabilities during the periods reported.  Estimates are used when accounting for certain items such as revenues, allowances for returns, doubtful accounts, employee compensation programs, depreciation and amortization periods, taxes, inventory values, insurance programs, goodwill, other intangible assets and long-lived assets.  We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under the circumstances.  Actual results may differ from our estimates under different assumptions or conditions.



We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.  We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries.  If the financial condition of our customers were to deteriorate, additional allowances may be required.



We value our inventories at the lower of cost or market.  We write down inventory balances for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions.  If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.



We amortize patent application costs, which includes litigation defense costs over a five (5) year period.  As noted under the Section "Executive Compensation-Options" we have changed the accounting treatment for a no interest loan and related options to reflect the value of such options as interest expense.



In accordance with Statements of Financial Accounting Standards ("SFAS") No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed, all costs incurred to establish the technological feasibility are research and development costs.



Software development costs incurred after technological feasibility and prior to the software being available for sale are capitalized.  On June 30, 2005, the Company had remaining unamortized and unimpaired capitalized software development costs in the amount of $867,000.  The software development costs will be amortized over its estimated useful life of 5 years.  See also Footnote 3  Significant Accounting Policies in the Financial Statements.



RESULTS OF OPERATIONS



Net Sales



Net sales for the twelve-month period ended June 30, 2005, and for June 30, 2004, were $0.00, based on the sales of Numera alone in keeping with the accounting for the June 27, 2005 acquisition as a Reverse Acquisition of Innova by Numera.



Cost of Sales



For the year ended June 30, 2005, and for June 30, 2004, the cost of sales was $0.00, based on the cost of sales of Numera alone under the method of accounting for Reverse Acquisitions.



Gross profit margin was $0.00 for the year ended June 30, 2005, and June 30, 2004 due to the Reverse Acquisition method of reporting.



Operating Expense



Operating expenses for the year ended June 30, 2005 were $3,100.  For the comparable period in 2004, operating costs amounted to $2,998,600, due primarily to a one-time impairment of Software Development Costs.



Other Income and Expense



There was no other income and expense for the year ended June 30, 2005 or June 30, 2004.



Income Taxes



Due to the Companys history of operating losses, management has established a valuation allowance in the full amount of the deferred tax assets arising from these losses, as management believes it is more likely than not that the Company will not generate sufficient taxable income within the appropriate period to offset these operating loss carry forwards.



Net Loss



Net loss for the year ended June 30, 2005 amounted to $3,100, as compared to net loss of $2,998,600 for the comparable period in 2004.   The loss for the year ended June 30, 2004 was primarily the result of a one-time impairment of Software Development Costs in the amount of $2,988,500.



Loss Per Share



For the year ended June 30, 2005, basic and diluted loss per share amounted to $(0.00).  For the comparable period in 2004, basic and diluted loss per share amounted to $(0.18).  The decrease in loss per share is due to the decrease in net loss between the comparable periods.



LIQUIDITY AND CAPITAL RESOURCES



Operating Activities



For the year ended June 30, 2005, net cash used by operating activities amounted to $(3,100), as compared to the $0.00 used by operating activities for the comparable period in 2004.  This change is due to the increase in the net loss of $3,100 from 2004 to 2005.



Investment Activities



Net cash provided by investing activities for the year ended June 30, 2005 was approximately $15,600, as compared to net cash provided by investing activities of approximately $0.00 for the comparable period in 2004.  The increase in cash provided for investing activities is due primarily to the acquisition of Innova by Numera in a reverse merger.



Financing Activities



The Companys financing activities provided $3,500 for the year ended June 30, 2005, as compared to no funds from financing activities for the year ended June 30, 2004.  This change resulted primarily from the advance of $3,500 from a shareholder in 2005, when no shareholder advances were made in 2004.





As shown in the accompanying financial statements, we incurred a net loss of $3,100 during the year ended June 30, 2005 and as of that date; our working capital deficit was $251,800.  Therefore, our ability to continue as a going concern is uncertain.  We expect to incur significant losses in the future.  As a result, we will need to generate significant revenues to achieve profitability and may never achieve profitability.



Although we continue to maintain our efforts to conserve cash, such efforts will not make us a viable business entity, and without significant additional revenues we may not be able to stay in business.  We commenced the outsourcing of some production and support tasks that were previously being done in-house in order to reduce costs.



We have not been successful in attracting outside capital.  Although we continue to pursue various opportunities, we cannot assure you that we would be able to raise any outside capital or that such funds will be available to us on favorable terms.  If we raise additional funds through the issuance of our equity or debt securities, such securities may have rights, preferences or privileges senior to those of the rights of our common stock and our stockholders may experience substantial dilution.



As of June 30, 2005 we continued to have past due invoices with our major bottle supplier and molded parts supplier.  Each of these suppliers have agreed to accept minimum weekly payments of $1,000 (minimum of $8,000 collectively per month) to satisfy these unpaid obligations.  To date we have not experienced any difficulty in securing the necessary raw materials from these or other vendors.  However, if we fail to maintain these weekly payments or if our vendors require satisfaction of outstanding obligations to fulfill new orders our operations could be adversely affected.



We are in continuous discussions with new prospective strategic alliance partners.  However, there is no assurance we will enter into any new alliances in fiscal 2006.  We do not anticipate significant business from Sawyer in the future due to the pending litigation matter.



Our principal capital and liquidity needs historical have related to the acquisition, procurement and manufacturing of component parts relating to our water filtration products, sales and marketing activities, the development of manufacturing infrastructure, litigation costs associated with patent protection, and compensation to our executive officers.  Because we have not had sufficient capital resources, we substantially scaled back research and development efforts, marketing and improvement of our manufacturing infrastructure.  Unfortunately, we do not believe that we are in position to substantially decrease our capital and liquidity requirements through additional cost cutting efforts.



Our acquisition of Numera and DesertView will substantially change our financing activities and needs during fiscal 2006.  We believe that our acquisition of DesertView and Numera will diversify our business base and provide us the opportunity to generate additional revenues.  Management also believes that the acquisition of DesertView and Numera will increase our chances of raising outside capital to meet our future capital requirements.  However, there is no assurance that we will be able to attract such capital or if we do attract such capital that it will be on favorable terms.



INFLATION



We believe that the impact of inflation and changing prices on our operations since the commencement of our operations has been negligible.



SEASONALITY



The company does not deem its revenues to be seasonal.



ITEM 7.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





Contents





Reports of Independent Registered Public Accounting Firms on Consolidated Financial Statements



Consolidated Financial Statements:



Consolidated Balance Sheet

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements



Report of Independent Registered Public Accounting Firm



Board of Directors and Stockholders

Innova Pure Water, Inc.

Dallas, Texas



We have audited the accompanying consolidated balance sheet of Innova Pure Water, Inc., (the Company) as of June 30, 2005 and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the two years then ended.  These consolidated financial statements are the responsibility of the Company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 the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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 Innova Pure Water, Inc. at June 30, 2005, and the consolidated results of their operations and cash flows for the years ended June 30, 2005 and 2004 in conformity with accounting principles generally accepted in the United States of America.



As disclosed in Note 15 to the accompanying consolidated financial statements, the Company corrected an error in its accounting for its merger with Numera Software Corporation (NSC) on June 27, 2005.



The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the consolidated financial statements, the Company has negative working capital of $251,800 as of June 30, 2005 and has incurred substantial operating losses resulting in an accumulated deficit of $3,318,100.  These conditions raise substantial doubt about the Companys ability to continue as a going concern.  Managements plans in regard to these matters are also described in Note 2.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Turner, Stone & Company, LLP

Certified Public Accountants

September 30, 2005, except as to the matters discussed in the paragraph above and Note 14 concerning the correction of an error in accounting for its NSC merger, as to which the date is October 30, 2006

Innova Pure Water, Inc.



Consolidated Balance Sheet



June 30, 2005



|Assets                                                                    |            
|------------------------------------------------------------------------- | -----------
|Current assets                                                            |            
|Cash                                                                      | $ 16,000   
|Accounts receivable, trade, net allowance for doubtful accounts of
$9,800 | 16,300     
|Other receivables                                                         | 600        
|Inventories                                                               | 66,000     
|Total current assets                                                      | 98,900     
|                                                                          |            
|Property and equipment, net of accumulated depreciation of $9,500         | 3,100      
|                                                                          |            
|Other assets:                                                             |            
|Computer software, net of accumulated amortization of $0                  | 867,000    
|Patents                                                                   | 161,700    
|Goodwill                                                                  | 160,100    
|Other                                                                     | 6,700      
|Total other assets                                                        | 1,195,500  
|                                                                          |            
|                                                                          | $1,297,500 
|                                                                          |            
|Liabilities and Stockholders' Equity                                      |            
|Current liabilities                                                       |            
|Accounts payable, trade                                                   | $  183,800 
|Accrued expenses                                                          | 49,600     
|Note payable, related party                                               | 4,000      
|Advances, shareholders                                                    | 3,500      
|Deferred revenue                                                          | 109,800    
|Total current liabilities                                                 | 350,700    
|                                                                          |            
|Long-term liabilities:                                                    |            
|Note payable, net of unamortized discount of $23,300                      | 176,700    
|                                                                          |            
|Stockholders equity:                                                     |            
|Preferred stock; $.001 par value; 2,000,000 shares authorized:            |            
|0 shares issued and outstanding                                           | -          
|Common stock; $.0001 par value; 50,000,000 shares authorized:             |            
|34,559,236 shares issued and outstanding                                  | 3,500      
|Capital in excess of par value                                            | 4,097,600  
|Accumulated deficit                                                       | (3,318,100)
|                                                                          | 783,000    
|Treasury stock, at cost; 500 shares                                       | (12,900)   
|Total stockholders equity                                                | 770,100    
|                                                                          |            
|                                                                          | $ 1,297,500



The accompanying notes are an integral part of the consolidated financial statements.





Innova Pure Water, Inc.



Consolidated Statements of Operations



|                                                     | Year Ended June 30  
|---------------------------------------------------- | --------------------
|                                                     | 2005                
|                                                     |                     
|Sales                                                | $                  0
|                                                     |                     
|Cost of Sales                                        | $                  0
|                                                     |                     
|Gross Profit                                         | $                  0
|                                                     |                     
|Operating expenses:                                  |                     
|Selling expenses                                     |                     
|General and administrative expenses                  | 3,100               
|Impairment of software development costs             | -                   
|                                                     |                     
|                                                     | 3,100               
|                                                     |                     
|Loss from operations                                 | (3,100)             
|                                                     |                     
|Other (income) expenses:                             |                     
|Interest, net                                        | 0                   
|Royalties and other income                           | 0                   
|                                                     | 0                   
|                                                     |                     
|Loss before provision for income taxes               | (3,100)             
|                                                     |                     
|Provision for income taxes                           | -                   
|                                                     |                     
|Net loss                                             | $          (3,100)  
|                                                     |                     
|Loss per common share                                | $            (0.00) 
|                                                     |                     
|Weighted average number of common shares outstanding | $  16,793,620       



The accompanying notes are an integral part of the consolidated financial statements.



Innova Pure Water, Inc.



Consolidated Statements of Changes in Stockholders' Equity



Years Ended June 30, 2005 and 2004





|                                        |              |               | Capital in |              |           |           
|--------------------------------------- | ------------ | ------------- | ---------- | ------------ | --------- | ----------
|                                        | Common Stock |               | Excess Of  | Accumulated  | Treasury 
|                                        | Shares       | Amount        | Par Value  | Deficit      | Stock     | Total     
|                                        |              |               |            |              |           |           
|Balance, June 30, 2003
(reverse merger) | 16,700       | $1,817,700    | $0         | $(324,000)   | $  -      | $1,493,700
|                                        |              |               |            |              |           |           
|Convert debt to equity                  |              | 1,718,300     |            |              |           | 1,718,300 
|                                        |              |               |            |              |           |           
|Net loss                                |              |               |            | (2,991,000   |           | (2,991,000
|                                        |              |               |            |              |           |           
|Balance, June 30, 2004                  | 16,700       | 3,536,000     |            | 3,315,000    | -         | 221,000   
|                                        |              |               |            |              |           |           
|Convert debt to equity                  |              | 628,800       |            |              |           | 628,800   
|                                        |              |               |            |              |           |           
|Issuance of common stock
reverse merger | 32,042,536   | (4,161,600)   | 3,970,400  |              | (12,900)  | (204,100) 
|                                        |              |               |            |              |           |           
|Acquisition of Desert View              | 2,500,000    |               | 127,200    |              |           | 127,200   
|                                        |              |               |            |              |           |           
|Net loss                                |              |               |            | (3,100)      |           | (3,100)   
|                                        |              |               |            |              |           |           
|Balance, June 30, 2005                  | 34,59,236    | $       3,500 | $4,097,600 | $(3,318,100) | $(12,900) | $770,100  
|                                        |              |               |            |              |           |           



The accompanying notes are an integral part of the consolidated financial statements.

Innova Pure Water, Inc.



Consolidated Statements of Cash Flows





|                                                                            | Year Ended June 30
|--------------------------------------------------------------------------- | ------------------
|                                                                            | 2005              
|                                                                            |                   
|Operating activities:                                                       |                   
|Net loss                                                                    | $ (3,100)         
|                                                                            |                   
|Adjustments to reconcile net loss to net cash used
in operating activities: |                   
|Depreciation and amortization                                               |                   
|Impairment of software development costs                                    |                   
|Decrease in:                                                                |                   
|Prepaid expenses                                                            |                   
|                                                                            |                   
|Total adjustments                                                           |                   
|Net cash used in operating activities                                       | (3,100)           
|                                                                            |                   
|Investing activities:                                                       |                   
|Cash acquired in acquisition                                                | 15,600            
|Net cash provided by investing activities                                   | 15,600            
|                                                                            |                   
|Financing activities:                                                       |                   
|Advances from shareholders                                                  | 3,500             
|Net cash provided by financing activities                                   | 3,500             
|                                                                            |                   
|Net increase in cash                                                        | 16,000            
|                                                                            |                   
|Cash, beginning of year                                                     | 0                 
|                                                                            |                   
|Cash, end of year                                                           | 0                 
|                                                                            |                   
|Supplemental disclosure of non-cash activities:                             |                   
|Settlement of debt for equity                                               |                   
|Contract software development costs capitalized                             |                   
|Fair value of assets acquired from current year acquisitions                | 429,300           
|Fair value of common stock issued as consideration for acquisitions         | 76,500            
|Liabilities assumed from current year acquisitions                          | 505,800           
|                                                                            |                   
|                                                                            |                   



The accompanying notes are an integral part of the consolidated financial statements.

Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004



1.

Nature of Operations



Innova Pure Water, Inc. (Innova) was incorporated in Florida in 1985 for the purpose of developing, manufacturing, and marketing proprietary, state-of-the-art, effective, and economical in-the-house and portable water purification products. The corporate headquarters is located in Clearwater, Florida.  Sales are to both wholesale and retail markets throughout the United States, principally on credit and primarily through strategic alliances.  Sales are also made to distributors in several foreign countries.



Effective June 27, 2005, the Company entered into two Stock Acquisition Agreements with DesertView Management Services, Inc., an Arizona corporation (DesertView) and Numera Software Corporation, a Washington corporation (Numera).  Innova and its two subsidiaries are collectively referred to as the Company.  Innovas acquisition of Numera has been accounted for as a reverse merger (see Note 14 below).



DesertViews primary objective is to enhance the ability of small to medium sized businesses to produce higher profit levels through full utilization of their Information Technology (IT) resources.  The companys focus is to achieve a change in its clients management strategies which will produce an increase in profitability through growing, and at times restructuring their IT infrastructure.



Numera was incorporated in 1997 and provides small to mid-sized businesses with full-featured, easy-to-use, real-time accounting software systems that meet or exceed the performance characteristics of mid to high-end competitors, at significantly lower cost.



For the years ended June 30, 2005 and 2004, there were no revenues from operations.





The Company currently holds numerous patents assigned to them by a stockholder, in the field of water treatment and has additional domestic and foreign patents pending.  The Company pursues an aggressive product development program with the goal to provide its strategic partners with unique competitive advantages.



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004



2.

Going Concern



The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has sustained substantial operating losses in recent years.  Further, for the year ended June 30, 2005, the Company had negative working capital of $251,800, a net loss of approximately $3,100 and has incurred substantial net losses in the previous years resulting in an accumulated deficit of approximately $3,318,200. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Although the Company continues to maintain costs and institute efforts to conserve cash, such efforts will not make it a viable business entity, and without significant additional revenues and/or equity capital, it may not be able to stay in business.



The Company continues to explore the possibility of outsourcing some production and support tasks that are currently being done in-house in order to reduce such costs. However, until sufficient volume is obtained to support significant outsourcing, the Company is not in a position to outsource production in order to save costs.



3.

Significant Accounting Policies



Principles of consolidation and basis of presentation



The accompanying consolidated financial statements included the general accounts of the Company (see above) and its wholly owned subsidiaries.  All material intercompany transactions, accounts and balances have been eliminated in the consolidation.



For financial reporting purposes, the reverse merger with Numera (see above) has been treated as a recapitalization of Numera with Innova being the legal survivor and Numera being the accounting survivor and the operating entity. That is, the historical financial statements prior to June 27, 2005 are those of Numera and its operations, even though they are labeled as those of the Company. Retained earnings of Numera related to its operations, is carried forward after the recapitalization. Operations prior to the recapitalization are those of the accounting survivor, Numera and its predecessor operations, which began in 1997. Earnings per share for the periods prior to the recapitalization are restated to reflect the equivalent number of shares outstanding for the entire period operations were conducted. Upon completion of the reverse merger, the financial statements become those of the operating company, with adjustments to reflect the changes in equity structure and receipt of the assets and liabilities of Innova.



Business combinations



On June 27, 2005, Innova entered into two Stock Acquisition Agreements to acquire DesertView Management Services, Inc. and Numera Software Corporation for a 2,500,000 and 16,600,000 shares of restricted common stock, respectively.  As part of the agreement, Innova received $112,000 of working capital advances in exchange for 300,000 shares of common stock.  Immediately following the acquisitions, the shareholders of Numera Software Corporation owned 48% of the voting common stock, with the shareholders of DesertView Management Services, Inc. owning 7%.  Innova acquired DesertView and Numera to diversify its business base and provide the opportunity to generate additional revenues, as well as to increase the Companys ability to raise outside capital to meet our future capital requirements.



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





The following unaudited pro forma information is presented as if the acquisitions of Innova and DesertView had occurred on July 1, 2003, the beginning of the earliest period presented:



|                                    |  |               |          |   |               |   |            
|----------------------------------- |  | ------------- | -------- | - | ------------- | - | -----------
|                                    |  | Year Ended   
|                                    |  | June 30,
2005 |          |   | June 30,
2004
|Total revenues                      |  | $             | 455,700  |   |               | $ | 776,900    
|Net loss applicable to common stock |  | $             | (229,000 | ) |               | $ | (3,250,600)
|Loss per share:                     |  |               |          |   |               |   |            
|Basic                               |  | $             | (.01     | ) |               | $ | (.20)      
|Diluted                             |  | $             | (.01     | ) |               | $ | (.20)      



Loss per share is calculated based on approximately 19,100,000 additional shares being outstanding to account for the purchase price of Numera and DesertView.



Management estimates



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



Cash and cash flows



The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and it believes it is not exposed to any significant credit risks affecting cash. None of the Company's cash is restricted.



For purposes of the consolidated statements of cash flows, cash includes demand deposits, time deposits, short-term cash equivalent investments with original maturities of less than three months and cash management money market funds available on a daily basis.



Inventories



Inventory is stated at the lower of cost, determined by the first-in, first-out method, or net realizable value (market).  Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors.



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





Accounts receivable and doubtful accounts



Trade accounts receivable consist primarily of receivables from the sale of water filtration devices.  The Company sells to its customers based on its standard credit policies and regularly reviews accounts receivable for any bad debts.  The review for bad debts is based on an analysis of the Companys collection experience, customer credit worthiness, and current economic trends.   Receivables are determined to be past due based on payment terms of original invoices. The Company does not charge significant amounts of interest on past due receivables. There were no receivables on non-accrual of interest status at June 30, 2005.



Trade accounts receivable also include $15,800 which relates to consulting services.  Based on managements review of accounts receivable, an allowance for doubtful accounts of $9,800 is considered adequate at June 30, 2005.





Property and equipment



Property and equipment are recorded at cost.  Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, ranging generally from 2 to 10 years.  Additions to and major improvements of property and equipment are capitalized.  Repair and maintenance expenditures are charged to expense as incurred. As property or equipment is sold or retired, the applicable cost and accumulated depreciation are eliminated from the accounts and any gain or loss is recorded. Depreciation expense amounted to approximately $0 and $1,900 for the years ended June 30, 2005 and 2004, respectively.



Impairment or disposal of long-lived assets



The Company has adopted Statement of Financial Accounting Standards Board No. 144 (SFAS No. 144), Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses the financial accounting and reporting for the impairment of long-lived assets, excluding goodwill and intangible assets, to be held and used or disposed of.  The adoption of SFAS No. 144 did not have an impact on the Companys consolidated financial position or results of operations.  In accordance with SFAS No. 144, the carrying values of long-lived assets are periodically reviewed by the Company and impairments would be recognized if the expected future operating non-discounted cash flows derived from an asset were less than its carrying value and if the carrying value is more than the fair value of the asset.  Numera Software Corporation recorded $2,988,500 in Impairment Costs on June 30, 2004, as the result of an analysis by management as to the fair value of the software. As of June 30, 2005, the Company has not identified any other asset impairments.



Intangible assets and amortization



Patents, acquired in the reverse merger with Innova (Note 1), are included in other assets in the accompanying consolidated balance sheet and are being amortized over their estimated useful life of five years.  Because the reverse merger occurred at the end of the fiscal year ended June 30, 2005, no amortization expense has been recognized in the accompanying consolidated statements of operations.



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004







Amortization expense for the next five years is estimated as follows:



|         | 2006     | 2007     | 2008     | 2009     | 2010    
|-------- | -------- | -------- | -------- | -------- | --------
|         |          |          |          |          |         
|Patents  | $120,500 | $18,700  | $10,500  | $6,100   | $3,900  
|Software | 174,000  | 174,000  | 174,000  | 174,000  | 174,000 
|TOTAL    | $299,500 | $197,700 | $189,500 | $185,100 | $182,900



Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations, and is not being amortized.



The Company follows the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires an annual impairment test for goodwill and intangible assets with indefinite lives. Under the provisions of SFAS No. 142, the first step of the impairment test requires that the Company determine the fair value of each segment, and compare the fair value to the segments carrying amount. To the extent a segments carrying amount exceeds its fair value, an indication exists that the segments goodwill may be impaired and the Company must perform a second more detailed impairment assessment. The second impairment assessment involves allocating the segments fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the segments goodwill as of the assessment date.



The implied fair value of the segments goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. For the year ended June 30, 2006 there was no impairment recorded for goodwill related to the acquisition of DesertView Management Consulting, Inc.  In the future, the Company will perform the annual test during its fiscal fourth quarter unless events or circumstances indicate impairment of the goodwill may have occurred before that time



Revenue recognition



The Company recognizes revenue at the time products are shipped.  Any deposits received in advance of product shipment are reflected as liabilities until the products are shipped.  The Company records amounts billed to customers for shipping and handling costs as sales revenue. Costs incurred by the Company for shipping and handling are included in cost of sales.



Costs of discounts and point-of-sale rebates are recognized at the date at which the related sales revenue is recognized and are recorded as a reduction of sales revenue. The Company does not currently offer any discounts or point-of-sale rebates to its customers.



Financial instruments



Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





These financial instruments include cash, accounts receivable and accounts payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company's notes payable is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.



Loss per share



The Company records shares of common stock as outstanding at the time the Company becomes contractually obligated to issue shares.  As of June 30, 2005, the Company has 34,559,236 shares outstanding.



Basic loss per share is calculated by dividing net loss by the average number of common shares outstanding during the year. Diluted loss per common share is calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options. At June 30, 2005 and 2004, there were no dilutive instruments outstanding.



Stock based compensation



Financial Accounting Standards Board Statement 123 (FASB 123), Accounting for Stock-Based Compensation, provides that expense equal to the fair value of all stock-based awards on the date of the grant be recognized over the vesting period. Alternatively, this statement allows entities to continue to apply the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, whereby compensation expense is recorded on the date the options are granted equal to the excess of the market price of the underlying stock over the exercise price.  The Company has elected to continue to apply the provisions of APB 25.



In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123R (revised 2004), Share-Based Payment. This Statement replaces FASB Statement No. 123 and supersedes APB Opinion No. 25. Statement No. 123(R) will require the fair value of all stock option awards issued to employees to be recorded as an expense over the related vesting period. The Statement also requires the recognition of compensation expense for the fair value of any unvested stock option awards outstanding at the date of adoption. We are evaluating these new rules, but expect no material impact upon adoption relating to outstanding options since all of the awards under the existing incentive stock option plan will be fully vested prior to the effective date of the revised rules.



FASB issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, which is effective for the Company as of January 1, 2003.  This statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





Pro forma information regarding net loss and net loss per share is required by SFAS No. 123, and has been determined as if the Company had accounted for its stock options under the fair value method of SFAS No. 123.  The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model.  During fiscal year ended June 30, 2005, no options were granted.  The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No 123, to stock-based employee compensation.



|                                                                                                                                    |  |      |        |      |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | -
|                                                                                                                                    |  | 2005 |        | 2004 |  
|Net loss, as reported                                                                                                               |  | $    | (3,100 | )    | $
|                                                                                                                                    |  |      |        |      |  
|Deduct: Additional stock based employee compensation expense determined under fair value based methods for all awards, net of taxes |  | 0    |        | 0    |  
|                                                                                                                                    |  |      |        |      |  
|Pro forma net loss                                                                                                                  |  | $    | (3,100 | )    | $
|                                                                                                                                    |  |      |        |      |  
|Net loss per share:                                                                                                                 |  |      |        |      |  
|As reported                                                                                                                         |  | $    | (.00   | )    | $
|Pro forma                                                                                                                           |  | $    | (.00   | )    | $
|                                                                                                                                    |  |      |        |      |  





Capitalized software development costs



In accordance with Statements of Financial Accounting Standards (SFAS) No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed, all costs incurred to establish the technological feasibility are research and development costs and charged to expense when incurred.  Software development costs incurred after technological feasibility and prior to the software being available for sale are capitalized.  The Company has capitalized software development costs in the amount of $867,000.  These software development costs will begin being amortized when it is available for release to customers.  At that time, the software will be amortized over its estimated useful life of 5 years.  The Company has determined that this software is marketable as of July 1, 2006 and was available for release to customers at that time.  Accordingly, the Company will begin amortization of these costs beginning on this date over five years using the straight-line method.



4.

Inventories



Inventories consist of raw materials valued at $66,000 at June 30, 2005.







Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004









5.

Property and Equipment



|Property and equipment consists of: | June 30, 2005
|----------------------------------- | -------------
|                                    |              
|Office furniture and equipment      | $9,700       
|Machinery and equipment             | 2,900        
|                                    | 12,600       
|                                    |              
|Less:                               |              
|Accumulated depreciation            | 9,500        
|                                    |              
|                                    | $ 3,100      
|                                    |              



1.

Related Party Transactions



On December 10, 2004, $21,000 was advanced to Numera Software Corporation by a shareholder.  Payments were made on this indebtedness by the Company totaling $18,500 prior to June 30, 2005, leaving a balance due to shareholders at that date of $3,500.  These advances were non-interest bearing, unsecured and due upon demand as funds are available.



On June 27, 2005, in conjunction with the acquisition of Desert View Management Services, a related party loan in the amount of $4,000 was acquired by the Company, and the remaining balance on that indebtedness at June 30, 2005 was $4,000.  This advance was non-interest bearing, unsecured and due upon demand as funds are available.



On June 27, 2005, in conjunction with the acquisition of Desert View Management Services, accounts receivable from the President of Desert View and his affiliates in the amount of $86,500 were acquired by the Company.  These amounts were offset by indebtedness to the President of Desert View in the amount of $41,700.  The net of these amounts, $44,800, was recorded by the Company as a receivable, with an offsetting entry to Allowance for Doubtful Accounts in the amount of $44,800.  These receivables and the offsetting payables were non-interest bearing, unsecured and due upon demand as funds are available.



In conjunction with the acquisition of Desert View, on June 27, 2005, the Company acquired an account payable in the amount of $12,500 to a corporation, which is owned by the son of the President of the Company.  No activity occurred on this account during 2006.  This payable is non-interest bearing, unsecured and due upon demand as funds are available.



There were no related party transactions during the fiscal year ended June 30, 2004.



2.

Note Payable



On March 26, 2002, the Company received proceeds of $400,000 in exchange for a note payable. The note payable is payable in five years at zero percent interest and is unsecured.  The note has been discounted using an interest rate of 6%.  In connection with the payable, the Company issued 1,200,000 stock options valued at $180,000 using the Black Scholes method, and is recorded as a discount on the note payable.  During the year ended June 30, 2004, the Company entered into an agreement to issue a non-exclusive right to a patent in satisfaction of $200,000 of the note payable and cancellation of 800,000 common stock options.  As a result of the cancellation of options, the unused value of these options was charged against additional paid in capital.  The balance outstanding on this note as of June 30, 2005, net of the unamortized discount in the amount of $23,300, is $176,700.



As mentioned in Related Party Transactions above, notes payable to shareholders of Numera and Desert View were $3,500 and $4,000 respectively as of June 30, 2005.





8.

Lease Commitments



Commensurate with the Companys reverse merger with Innova (Note 1), the Company is obligated under a non-cancelable operating lease for its office facilities expiring in March 2006 and which provides for monthly rental and operating cost escalations.  For the years ended June 30, 2005 and 2004, the Company incurred no rent expense.



The following is a schedule by year of future minimum rental payments required under these leases as of June 30, 2005:



|Year Ending
June 30 |         
|------------------- | --------
|2006                | $ 29,000
|                    |         
|                    |         



In addition, the Company is also a guarantor on an automobile leased by the Chairman of the Board which expires in April 2007 and has 11 payments of approximately $700 remaining as of June 30, 2005.



9.

Income Taxes



The Company has incurred significant operating losses since its inception that have been carried forward for income tax purposes and, therefore, no tax liabilities have been incurred for the years presented.  These operating losses and other timing differences give rise to a deferred tax asset and are as follows:



|                         |  | 2005                 
|------------------------ |  | ---------------------
|                         |  |                      
|Deferred tax asset:      |  | $        147,600     
|Amortization             |  | 44,000               
|Deferred revenue         |  | 4,000                
|Other timing differences |  | 2,026,000            
|Loss carryforward        |  | 2,221,600            
|Net deferred tax asset   |  | (2,221,600)          
|Allowance                |  | $                   -
|                         |  |                      



Differences between the federal benefit computed at a statutory rate of 34% and the Companys effective tax rate and provision are as follows:



|                                                    | 2005        | 2004          
|--------------------------------------------------- | ----------- | --------------
|                                                    |             |               
|Statutory benefit                                   | $ (1,200)   | $ (1,016,700) 
|State tax benefit, net of federal effect            | (100)       | (119,600)     
|Increase in deferred income tax valuation allowance | 1,300       | 1,136,300     
|                                                    | $         - | $            -



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





The Company has available at June 30, 2005 approximately $5,065,000 of unused operating loss carryforwards that may be applied against future taxable income, which would reduce taxes payable by approximately $2,000,000 in the future.  These operating loss carryforwards began expiring June 30, 1991.  Income tax benefits resulting from the utilization of these carryforwards will be recognized in the year in which they are realized for federal and state tax purposes. Approximately $64,000 of the unused net operating loss carryforwards expired in the fiscal year ended June 30, 2005.



The Company has provided a full valuation allowance related to the realizability of the deferred tax asset. The valuation allowance is based on evidence that the deferred tax asset will more likely than not, not be realized. Such valuation allowance may be increased or decreased in the future based on the likelihood of achieving future taxable earnings.



10.

Preferred Stock



Effective October 24, 1996, the Board of Directors authorized 2,000,000 shares of preferred stock with a par value of $.001 per share.  The Board of Directors is authorized to issue the preferred stock in series and to fix, in the manner and to the full extent provided and permitted by law, the rights, preferences, and limitations of each series of preferred stock.  At June 30, 2005, there were no shares of preferred stock issued or outstanding.



11.

Stock Options and Warrants



On April 22, 1999, the Company adopted the 1999 Stock Option Plan.  Under the plan, options to issue up to 1,000,000 shares of the Companys common stock may be granted.  The option price shall not be less than the greater of $.50 per share or 100 percent of the fair market value of the underlying common stock on the date of grant.  As of June 30, 2005, 100,000 options were outstanding under the plan at $.50 per share. These options expire in 2010.



During the year ended June 30, 2002, the Companys 1999 Stock Option Plan was amended to allow the remaining options to be granted at an option price not less than the greater of $.25 per share or 100 percent of the fair market value of the underlying stock on the date of the grant. During the year ended June 30, 2002, an additional 755,000 stock options at $.25 per share were granted under the 1999 Stock Option Plan. At June 30, 2005, none of these options were outstanding and 2,340,000 and 65,000 options were forfeited during 2005 and 2004, respectively.



On March 26, 2002, the Company entered into an agreement with an individual to provide marketing activities to the Company. In exchange for these services, this individual was granted 1.2 million options, which was subsequently reduced to 400,000 options, as compensation. These options are immediately exercisable, expire in five years, with the following terms:



Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





200,000 warrants may be converted into 200,000 shares of Innova stock at $.50

200,000 warrants may be converted into 200,000 shares of Innova stock at $.75



As of June 30, 2005, none of these options have been exercised.



During the years ended June 30, 2005 and 2004, the Company did not issue any options.



The following is a summary of stock option activity during 2005 and 2004:



|                                  | 1999
Stock Option Plans | Other           
|--------------------------------- | ----------------------- | ----------------
|                                  |                         | Weighted
Average
|                                  | Number                  | Exercise        
|                                  | of Shares               | Price           
|                                  |                         |                 
|Options granted and outstanding:  |                         |                 
|June 30, 2003                     | 825,000                 | $.28            
|Options forfeited during the year | (65,000)                | (.25)           
|                                  |                         |                 
|Options granted and outstanding:  |                         |                 
|June 30, 2004                     | 760,000                 | $.28            
|                                  |                         |                 
|Options exercised during the year |                         |                 
|                                  |                         |                 
|Options forfeited during the year | (660,000)               | (.25)           
|                                  |                         |                 
|Options granted and outstanding:  |                         |                 
|June 30, 2005                     | 100,000                 | $.30            
|                                  |                         |                 







Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





The following table summarizes the status of options outstanding at June 30, 2005:



|                       | Outstanding Options | Exercisable Options
|---------------------- | ------------------- | -------------------
|                       |                     |                    
|                       |                     |                    
|                       |                     |                    
|                       | Exercise            |                    
|                       | Price               | Number             
|                       |                     |                    
|Other Options          | $.50                | 200,000            
|Other Options          | $.75                | 200,000            
|1999 Stock Option Plan | $.50                | 100,000            



12.

Royalties and Other Income



There was no royalty or other income for the years ending June 30, 2005 and 2004.





13.

Legal Settlements and Contingencies



Innova is currently plaintiff in a patent infringement lawsuit entitled Innova Pure Water, Inc., Plaintiff v. Safari Water Filtration Systems, Inc. d/b/a Safari Outdoor Products, Defendant; Case No. 99-1781-Civ-T-23F filed by the Company on August 4, 1999.  The case was filed with the U.S. District Court, Middle District of Florida, Tampa Division.  The Company has claimed patent infringement of U.S. Patent 5,609,759 on the part of the defendants.  On December 16, 2003, the court ruled in favor of Safari.  Innova filed an appeal with the United States Court of Appeals, case No. 04-1097, who, on August 11, 2004, reversed the lower courts decision.  The case has been remanded back to the Circuit Court on September 1, 2004 to find on any remaining issues.  Innova has filed for a summary judgment or the prompt setting of a trial date.  On September 30, 2005, the Court issued an Order granting Innova's motion for summary judgment.  The Court adjudged that Innova's U.S. Patent 5,609,759 is valid and enforceable and that claims set forth in said patent were infringed upon by products made, used, sold or offered for sale by Safari.  Safari was permanently enjoined from making, using, selling or offering for sale in the United States any product covered under the patent's claims as more fully set forth in the Order.  Management of the Company believes the entry of this Order will have significance against other parties who may be infringing upon the Company's products and services.





Innova is currently a plaintiff and a cross defendant in a case captioned J. Smith and M. Danzelv. Innova Pure Water, Inc. v. Sawyer Products, Inc.  Sawyer Products, Inc. v. Innova Pure Water, Inc. and J. Nohren and Rose R. Smith; Case No. 05-000538C1-07 in the Sixth Judicial Circuit Court of Pinellas County.  This case is in its early stages and it is not possible at the present time with any reasonable degree of certainty to determine the likelihood of a favorable or unfavorable outcome nor to quantify the potential exposure to Innova.  No amounts relating to this case have been recorded in the accompanying consolidated financial statements.









Innova Pure Water, Inc.



Notes to Consolidated Financial Statements



Years Ended June 30, 2005 and 2004





Originally, Mr. Smith and Ms. Danzel sued Innova for accrued and unpaid vacation time.  The total amount was less than $10,000.  Innova counterclaimed against the former employees and their new employer, Sawyer Products, Inc., for violation of, and interference with the former employees' covenants not to compete with Innova.  In the litigation, Sawyer Products filed a $600,000 claim against Innova and certain of its officers alleging misrepresentation in connection with certain loans Sawyer made to the Company and the issuance of warrants to Sawyer.  Sawyer has also sued Innova for breach of contract.  Sawyer is seeking damages in excess of $600,000.  Innova is seeking both back royalties or lost profits, as well as damages, including punitive damages.  Management of Innova believes it has meritorious defenses and intends to vigorously defend the claims and pursue Sawyer and its principals.







14.   Restatement for reverse merger



Subsequent to the issuance of the Companys annual report on Form 10-KSB for the fiscal year ended June 30, 2005, the Company determined that the method of accounting for the acquisition of Numera Software Corporation by Innova Pure Water, Inc. on June 27, 2005 was not appropriate.  Consequently, the Company changed its accounting for the transaction between Innova and Numera as a reverse acquisition (Note 1), with Numera as the acquiring company, in lieu of accounting for the transaction as a purchase of Numera Software Corporation by Innova Pure Water, Inc., as was originally reported.



As a result, the accompanying Consolidated Balance Sheet as of June 30, 2005, Consolidated Statements of Income, and Consolidated Statements of Cash Flow, and Consolidated Statements of Stockholders Equity as of June 30, 2005 and June 30, 2004 have been restated to reflect the appropriate reverse acquisition accounting method.



Effects of the Restatement



A summary of the effects of the restatement including the $8,519,900 adjustment to beginning Accumulated Deficit as of July 1, 2003, is as follows:





|                                                                                  |  |                          |             |   |             |   |             |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ----------- | - | ----------- | - | ----------- | -
|                                                                                  |  | June 30, 2005            |            
|                                                                                  |  | As previously
Reported   |             |   | As restated |  
|ASSETS                                                                            |  |                          |             |   |             |   |             |  
|Current Assets                                                                    |  |                          |             |   |             |   |             |  
|Cash and cash equivalents                                                         |  | $                        | 16,000      |   |             | $ | 16,000      |  
|Total current assets                                                              |  |                          | 98,900      |   |             |   | 98,900      |  
|Total assets                                                                      |  |                          | 1,297,500   |   |             |   | 1,297,500   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                              |  |                          |             |   |             |   |             |  
|Current Liabilities                                                               |  |                          |             |   |             |   |             |  
|Accounts payable                                                                  |  |                          | 183,800     |   |             |   | 183,800     |  
|Other Current Liabilities                                                         |  |                          | 57,100      |   |             |   | 57,100      |  
|Deferred revenue                                                                  |  |                          | 109,800     |   |             |   | 109,800     |  
|Total current liabilities                                                         |  |                          | 350,700     |   |             |   | 350,700     |  
|Long-term Liabilities                                                             |  |                          | 176,700     |   |             |   | 176,700     |  
|Total liabilities                                                                 |  |                          | 527,400     |   |             |   | 527,400     |  
|Stockholders Equity                                                              |  |                          |             |   |             |   |             |  
|Capital Stock                                                                     |  |                          | 3,500       |   |             |   | 3,500       |  
|Capital in excess of par value                                                    |  |                          | 10,149,000  |   |             |   | 4,097,600   |  
|Accumulated deficit                                                               |  |                          | (9,369,500) |   |             |   | (3,318,100) |  
|Total stockholders equity                                                        |  |                          | 770,100     |   |             |   | 770,100     |  
|Total liabilities and stockholders equity                                        |  |                          | 1,297,500   |   |             |   | 1,297,500   |  
|                                                                                  | 
|                                                                                  |  | Year ended June 30, 2005 |            
|                                                                                  |  | As previously
reported   |             |   | As restated |  
|Operating Activities                                                              |  |                          |             |   |             |   |             |  
|Total revenues                                                                    |  |                          | 312,400     |   |             |   | 0           |  
|                                                                                  |  |                         
|Cost of sales                                                                     |  |                          | 221,200     |   |             |   | 0           |  
|Gross Profit                                                                      |  |                          | 91,200      |   |             |   | 0           |  
|Operating Expenses                                                                |  |                          | 445,500     |   |             |   | 3,100       |  
|Net loss                                                                          |  |                          | (242,200    | ) |             |   | (3,100      | )
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |             |   |             |   |             |  
|Accounts payable                                                                  |  |                          | (88,500     | ) |             |   | 0           |  
|Inventories                                                                       |  |                          | (46,000)    |   |             |   | 0           |  
|Deferred income                                                                   |  |                          | (104,600    | ) |             |   | 0           |  
|Net cash used by operating activities                                             |  |                          | (325,200    | ) |             |   | (3,100      | )
|Net cash provided by investing activities                                         |  |                          | 54,100      |   |             |   | 15,600      |  
|Net cash provided by financing activities                                         |  |                          | 287,100     |   |             |   | 3,500       |  
|Net increase in cash and cash equivalents                                         |  |                          | 16,000      |   |             |   | 16,000      |  
|Cash and cash equivalents, end of year                                            |  |                          | 16,000      |   |             |   | 16,000      |  
|                                                                                  |  |                         
|Accumulated Defecit, June 30, 2004                                                |  |                          | (9,127,300  | ) |             |   | (3,315,000  | )
|Net income                                                                        |  |                          | (242,200    | ) |             |   | (3,100      | )
|Accumulated Defecit, June 30, 2005                                                |  |                          | (9,369,500  | ) |             |   | (3,318,100  | )



54





|                                                                                  |  | Year ended June 30, 2004 |               
|--------------------------------------------------------------------------------- |  | ------------------------ | --------------
|                                                                                  |  | As previously
reported   |               
|Operating Activities                                                              |  |                          |               
|Total revenues                                                                    |  |                          | 671,300       
|                                                                                  |  |                         
|Cost of sales                                                                     |  |                          | 396,500       
|Gross Profit                                                                      |  |                          | 274,800       
|Operating Expenses                                                                |  |                          | 660,400       
|Net loss                                                                          |  |                          | (282,800      
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |               
|Accounts payable                                                                  |  |                          | (49,400       
|Inventories                                                                       |  |                          | 89,400        
|Deferred income                                                                   |  |                          | (58,400       
|Net cash provided (used) by operating activities                                  |  |                          | 5,000         
|Net cash provided by investing activities                                         |  |                          | (67,400       
|Net cash provided by financing activities                                         |  |                          | 13,600        
|Net increase in cash and cash equivalents                                         |  |                          | (48,800       
|Cash and cash equivalents, end of year                                            |  |                          | 0             
|                                                                                  |  |                         
|Accumulated Deficit, June 30, 2003                                                |  |                          | (8,884,500    
|Net loss                                                                          |  |                          | (282,800      
|Accumulated Deficit, June 30, 2004                                                |  |                          | (9,127,300,
00
|Loss per share -basic                                                             |  |                          | (.02.         
|Loss per share -dilutive                                                          |  |                          | (.02          





15.

Segment information



The Company had only one reportable segment during 2005 and 2004.  Therefore, no segment reporting is included.







ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES



On June 29, 2005, the Company dismissed Pender Newkirk & Company ("Pender") as its independent certifying accountant. Pender had been the independent registered public accounting firm for and audited the consolidated financial statements of the Registrant as of June 30, 2003 and June 30, 2004. The reports of Pender on the consolidated financial statements of Innova for the past two fiscal years contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for an explanatory paragraph relating to the Registrants ability to continue as a "going concern." The decision to change accountants was approved unanimously by the Board of Directors and was based upon the Companys desire to retain an accounting firm with offices closer to its new location in Texas.



In connection with the audits for the two most recent fiscal years and in connection with Penders review of the subsequent interim periods through the date of dismissal on June 29, 2005, there have been no disagreements between Innova and Pender on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Pender, would have caused Pender to make reference thereto in their report on Innovas financial statements for these fiscal years.



Effective June 29, 2005, the Companys Board of Directors approved the engagement of Turner, Stone & Company ("Turner Stone") as the Companys independent accountants for the fiscal year ending June 30, 2005, effective upon the final execution of an engagement letter.



During the two most recent fiscal years and through July 7, 2005, the Company did not consult with Turner Stone regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Companys financial statements, or any other matter that was either the subject of disagreement or identified in response to Item 304(a)(1)(iv) of Regulation S-B.



ITEM 8A.

CONTROLS AND PROCEDURES



Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of June 30, 2005.  Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission ("SEC") reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to Innova Pure Water, Inc., and was made known to them by others within those entities, particularly during the period when this report was being prepared.



There were no significant changes in the Companys Internal Controls or in other factors that have materially affected, or are reasonably likely to affect, Internal Controls over financial reporting during the most recent fiscal year.



Our management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.  An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, If any within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also 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.  Over time, control may become inadequate because of changes in conditions, and/or the degree of compliance with the policies or procedures may deteriorate.



Complying with the Sarbanes-Oxley Section 404 requires significant effort in a compressed timeframe, as well as result in our incurring substantial cost to comply with Sarbanes-Oxley Section 404.  There can be no assurance that the valuation required by Sarbanes-Oxley Section 404 will not result in the identification of additional significant control deficiencies or that our auditors will be able to attest to the effectiveness of our internal controls of financial reporting.



Our auditors inability to examine the effectiveness of our internal controls over financial reporting may have a material adverse effect on the value of our securities.  If our auditors identify significant control deficiencies we will attempt to eliminate such deficiencies.  However, there is no assurance we will be able to eliminate such deficiencies on a timely and cost efficient basis within the required regulatory and legal timeframes.



Disclosures Related to the Filing of Restated Form 10-KSB.



The management of Innova and its two subsidiaries, subsequent to the acquisition on June 27, 2006, was required to evaluate the details of the transactions to determine the appropriate accounting treatment.  After diligent study of the facts and consultation with accounting specialists, the officers and directors of the company made the decision to treat Numera as the acquiring entity based on the following facts and circumstances:



1.

Shareholders of Numera received approximately 48% of the ownership of the company after the acquisitions.

2.

Two of the seven directors elected after the acquisitions were previously shareholders, officers, or directors of Numera.

3.

None of the officers or the Chairman of the Board of Directors elected after the acquisitions were previously shareholders, officers, or directors of Numera.

4.

The two largest shareholders of Numera were Limited Liability Companies consisting of approximately thirty beneficial owners.

5.

The re-location of the accounting and administrative offices of the company to the Dallas area was designed primarily to centralize the administrative functions between the Florida operations of Innova and the Arizona operations of Desert View.



The original 10-KSB was consequently prepared based upon these interpretations of the facts, reviewed and approved by our auditors, and filed with the SEC. Upon detailed questioning by reviewers of the 10-KSB regarding ownership and management control of the company relating to the acquisitions, management became aware that persons independent of the company might reach a different interpretation of the facts on which the original decision was made.  Management, after due deliberation, and consultations with our auditors, determined that the following interpretations could possibly be given more weight:



1.

Although Numera as a group received only 48% of the total shares, the two largest shareholders are former Numera shareholders.

2.

After the acquisitions, previous Innova directors made up only 2/7 of the board.

3.

The primary offices of the company were located in Dallas, which is the previous home of Numera.



Consequently, management has concluded that the preponderance of the factual information can be construed to indicate that Numera should be the acquiring entity in a reverse acquisition for accounting purposes, and has consequently prepared and filed this restatement of the 10-KSB to so reflect.



The CEO and the CFO have concluded that a diligent effort was made to collect the facts regarding the acquisition, and to interpret the facts according to the rules and regulations in effect at the time, in concurrence with the auditors who were consulted on the decision.  They are of the opinion that this decision on which entity was the acquiring entity could reasonably be made either way and have substantial if not conclusive factual support. However, since the management now believes that a restatement is required, they must concede that their disclosure controls and procedures were not effective.  Consequently, management has adopted a procedure whereby, in the event of a required interpretation or decision regarding complex accounting and financial reporting issues, an additional independent CPA who is knowledgeable in the specific field of the issue, will be consulted in addition to the management team and the independent auditors.



PART III



ITEM 9.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



The following table sets forth certain information with respect to each person who is a director or an executive officer of the Company as of June 30, 2005.  The information set forth in this table reflects the effects of the Stock Acquisition Agreements entered into with Numera and DesertView on June 27, 2005.



|Name                                                                                                              | Age                  | Position                                                                                                                                       
|----------------------------------------------------------------------------------------------------------------- | -------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------
|John E. Nohren, Jr.
Rose C. Smith
David Paul Condra
Jim R. Davisson
John L. Finan
Randal McClanahan
David L. Zich | 74
54
59
59
63
44
54 | Chairman of the Board, Director
Director
Director
Director, Chief Financial Officer, Treasurer, Secretary
Director
Director
Director, President



Executive officers are elected by the Board of Directors and serve until their successors are duly elected and qualify, subject to earlier removal by the Board of Directors. Directors are elected at the annual meeting of shareholders to serve for their term and until their respective successors are duly elected and qualify, or until their earlier resignation, removal from office, or death. The remaining directors may fill any vacancy in the Board of Directors for an unexpired term. See "Board of Directors" for a discussion of the Directors' terms.



Business Experience of Executive Officers and Directors



John E. Nohren, Jr. has been Chairman of the Board of the Company since its inception. During 1996, with Mr. Nohren's consent and approval, he resigned as President and Rose C. Smith was appointed his successor. He subsequently resigned as Chief Executive Officer in June of 1997 when Rose C. Smith was appointed his successor. In June 1998, Mr. Nohren was elected Treasurer and interim Chief Financial Officer. He was also the founder and the major shareholder of a prior Company, Innova, Inc., founded in 1969 to service the increasing requirement of the U.S. Department of Defense for sophisticated automation and hazardous waste management. With government funding, Mr. Nohren made technological advances for dealing with water contamination of various natures. The applications included the treatment of water in a chemical, biological, or nuclear war scenario. The applications also dealt with the removal of a variety of contaminants from the production of military products. The obvious voids, and needs for the application of those technologies to consumers lead to the formation of the Company in 1985. He is the named inventor on patents, which he has assigned to the Company.



Rose C. Smith was appointed President during 1996, and President and Chief Executive Officer effective June 30, 1997 until her recent resignation on June 27, 2005. Ms Smith remains a director and very active in the development of sales for the Company. Ms. Smith began her career in the financial community at Bache and Co., Inc. (Prudential Securities, Inc.) and was a financial adviser to the principals of the Moore McCormick Shipping Lines.







Ms. Smith functioned in a number of consulting roles relative to product acquisition, licensing, and line extensions and has been retained by Aguecheek Ltd. in England, which owned the licensing rights to Armani, Valentino, Ungaro, Tiffany and others. Ms. Smith was also a consultant regarding potential corporate acquisitions for Marubeni in Tokyo. She became associated with the Company in 1993 as a marketing consultant, hence became the Director of Business Development until elected President in 1996, and Chief Executive Officer in June 1997.



David Paul Condra, 59, is President and CEO of System Resources, Inc. of Fort Smith, Arkansas. System Resources Inc. employees a number of former IBM engineers in various locations for sales and support of IBM mid-range hardware and several types of networks. A 1968 graduate of the University of Arkansas with a Bachelor of Arts Degree in Marketing, he worked in radio and sports broadcasting until 1974 when he joined IBM as a territory manager, a position he held until early 1982 when he resigned to form System Resources, Inc.  Mr. Condra became a Director in connection with the Stock Acquisition Agreements with Numera and DesertView on June 27, 2005.



Jim R. Davisson, 59 currently holds a position with the Transportation Security Administration in Dallas, Texas. Previously Mr. Davisson has been in commercial banking and small business consulting for approximately 25 years. He has served as the President and CEO of First National Bank Bedford and was the managing partner in Campbell, Reaves & Associates, a small business consulting firm. He also founded and was President and CEO of American Orthopedic & Neurological Rehabilitation Centers which were occupational medical clinics throughout the Dallas and Fort Worth area. Mr. Davisson holds Bachelor of Science degree from the University of Memphis and a graduate degree from the Paul W. Barret, Jr. Graduate School of Banking.  Mr. Davisson became our Chief Financial Officer, Secretary, Treasurer and a Director in connection with the Stock Acquisition Agreements with Numera and DesertView on June 27, 2005.



John L. Finan, 63, retired USAF General, currently serves as Vice President for Administration and Finance/Chief Financial Officer of Rowan University, a university in Glassboro, NJ with over 9,500 students. Prior to Rowen, he was Vice President for Business and Finance/CFO at The University of South Carolina. During his military career, General Finan served in many capacities including, Director of Budget and Cost Analysis, United States Air Force Academy. From 1991 until his retirement in 1993 General Finan was Executive Vice President of AAFSS, the Army-Air Force worldwide retail organization. Mr. Finans educational background includes a BA-Economics from the University of Connecticut, an MBA from Michigan State University, plus Advanced Management from Columbia University in New York and the JFK School of Government/School for Senior Management in Government, Harvard University, Cambridge, MA.  Mr. Finan became a Director in connection with the Numera and DesertView Stock Acquisition Agreements on June 27, 2005.



Randal McClanahan, age 44, a graduate of the University of Arkansas began his career in the mortgage business in 1986 in the Dallas/Fort Worth area. Mr. McClanahan has been associated with Numera Software Corporation for several years, first as a stockholder and later serving as an officer and director.  Mr. McClanahan became a Director in connection with the Stock Acquisition Agreements with DesertView and Numera on June 27, 2005.



David L. Zich, 54, President of DesertView Management Services, Inc. of Tucson, AZ, offers more than 35 years experience of directing the development, growth and leadership of business and executive personnel.  Mr. Zich became our Chief Executive Officer and a Director as part of the Stock Acquisition Agreements with DesertView and Numera on June 27, 2005.



BOARD OF DIRECTORS



The Company's Bylaws fix the size of the Board of Directors at no fewer than one and no more than nine members, to be elected annually by a plurality of the votes cast by the holders of Common Stock, and to serve until the next annual meeting of stockholders and until their successors have been elected or until their earlier resignation or removal.  During the fiscal year ended June 30, 2005,  Emanuel Mersis and Peter Christiansen resigned during fiscal year ended June 30, 2005 due to other business obligations.  We currently have seven directors.  Messrs. Finan, Condra, and McClanahan, are considered independent outside directors.



During fiscal year ended 2005 our Board of Directors held no meetings at which all Directors were present.  We did not have a separate compensation, audit or nominating committee during fiscal year ended June 30, 2005.  We currently do not compensate any of our Directors for serving on our Board.  We intend to adopt compensation packages for our Board members during fiscal 2006 and establishing a compensation committee during fiscal year ended 2006.  Until such date our entire Board of Directors shall serve as the compensation committee.



THE COMMITTEES



After the acquisitions of Numera and DesertView we appointed John Finan and Randal McClanahan as our Audit Committee.  Mr. McClanahan is deemed our financial expert.  Each of the members of the Audit Committee are considered independent.  We do not have a standing nominating committee for the Board.



CODE OF ETHICS



In connection with the filing of this Form 10K-SB we have adopted a "Senior Financial Officers  Code of Ethics" that applies to all Innova employees and Board of Directors, including our principal executive officer and principal financial officer, or persons performing similar functions.  A copy of our Code of Ethics is attached as an Exhibit to this Form 10-KSB.



We intend to post the Code of Ethics and related amendments or waivers, if any, on our website at www.innovapurewater.com.  Information contained on our website is not a part of this report.  Copies of our Code of Business Conduct and Ethics will be provided free of charge upon written request to Mr. Jim R. Davisson, 15851 N. Dallas Parkway, Suite 1200, Addison, Texas.



ITEM 10.

EXECUTIVE COMPENSATION



EXECUTIVE COMPENSATION



There was no compensation paid or accrued by the Company for the fiscal years ended June 30, 2005 and June 30, 2004 to or for the account of any of the officers or directors





EMPLOYMENT AND OTHER AGREEMENTS



We currently do not have any written employment agreements with our Executive Officers.  We intend upon entering into written compensatory arrangements with our Executive Officers during fiscal year end 2006.



During fiscal 2004 Rose Smith and Jack Nohren did not have written compensatory or employment agreements inasmuch as their prior and "Certain Transactions") agreements had terminated.  In connection with the DesertView and Numera Stock Acquisition Agreements, each of these individuals agreed to accept shares of our common stock in satisfaction of accrued compensatory and other payment obligations.  In addition, each of these individuals agreed to exchange options for shares of our common stock.  See Footnote 3 to the Summary Compensation Table set forth above.



AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES



The information provided in the table below provides information with respect to each exercise of stock options during fiscal 2005 and fiscal 2004 by each of the executive officers named in the summary compensation table and the fiscal year end value of unexercised options.



|(a)
Name                                                                                                                                       | (b)
Shares Acquired/ Exercised | (c)
Value Realized
($)(1) | (d)
Number of Unexercised Options Issued During FY-End Exercisable on or after July 1, 2004 or July 1, 2005 | (e)
Value of Unexercised In-the Money Options at FY-End ($) Exercisable on or after July 1, 2004 or
July 1, 2005 (1)
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------------- | ----------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------
|Fiscal 2004
John E. Nohren, Jr.
Rose Smith
--------------------------
Fiscal 2005
John E. Nohren, Jr.
Rose Smith(2)
-------------------------- | _____
_____


423,333
417,667  | ____
____


25,400
25,000 | ____
____


_____
_____                                                                                     | 0
0


0
0                                                                                                           



(1)

The aggregate dollar values in column (c) and (e) are calculated by determining the difference between the fair market value of the Common Stock underlying the options and the exercise price of the options at exercise or fiscal year end, respectively. In calculating the dollar value realized upon exercise, the value of any payment of the exercise price is not included.

(2)

Represents Mr. Nohren's agreement to exchange options to acquire 1,270,000 shares of common stock for 423,333 shares of common stock and Rose Smith's agreement to exchange 1,250,000 options to acquire common stock for 417,667 shares of common stock in connection with the Numera and DesertView Stock Acquisition Agreements.  See "Summary Compensation Table."



STOCK OPTIONS



On April 22, 1999, the Company adopted the 1999 Stock Option Plan.  Under the plan, options to issue up to 1,000,000 shares of the Companys common stock may be granted.  The option price was not to be less than the greater of $.50 per share or 100 percent of the fair market value of the underlying common stock on the date of grant.  As of June 30, 2005, 100,000 options were outstanding under the plan at $.50 per share. These options expire in 2010.



During the year ended June 30, 2002, the Companys 1999 Stock Option Plan was amended to allow the remaining options to be granted at an option price not less than the greater of $.25 per share or 100 percent of the fair market value of the underlying stock on the date of the grant. At June 30, 2005, 100,000 of these options are outstanding, fully vested and exercisable.



On March 26, 2002, the Company entered into an agreement with an individual to provide marketing activities to the Company. In exchange for these services, this individual was granted 1.2 million options, which was subsequently reduced to 400,000 options, as compensation. These options are immediately exercisable, expire in five years, with the following terms:



200,000 warrants may be converted into 200,000 shares of Innova stock at $.50

200,000 warrants may be converted into 200,000 shares of Innova stock at $.75



As of June 30, 2005, none of these options has been exercised.



During the year ended, June 30, 2004, the Company recognized that the issuance of these options was partially based upon the relationship between the individual and the entity that advanced the Company $400,000 on an interest-free loan and will no longer consider the individual an employee.  Therefore, the Company has treated the fair value of these options, $180,000, as prepaid interest to be amortized over the term of the note.  During the year ended June 30, 2004, the Company entered into an agreement to issue a non-exclusive right to a patent in satisfaction of $200,000 of the note payable and cancellation of 800,000 common stock options.  As a result of the cancellation of options, the unused value of these options and the related discount of $87,200 was charged against additional paid in capital.



The following table sets forth information with respect to our common stock that may be issued upon the exercise of outstanding options, warrants, and rights to purchase shares of our common stock as of June 30, 2005.



|Plan Category                                                                                                      | (a)
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants, and Rights | (b)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants, and Rights | (c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
|------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------
|Equity Compensation Plans
Approved by
Stockholders

Equity Compensation Plans
Not Approved by
Stockholders


Total | -0-



500,000                                                                                   | N/A



$.44                                                                      | N/A



900,000                                                                                                                                 

_________________________



ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth certain information with respect to the beneficial ownership of shares of Company Common Stock owned as of June 30, 2005 beneficially by (i) each person who beneficially owns more than 5% of the outstanding Company Common Stock, (ii) each director of the Company, (iii) the Chairman and Treasurer, and the President and Chief Executive Officer of the Company (the only executive officers of the Company whose cash and non-cash compensation for services rendered to the Company for the year ended June 30, 2005, exceeded $100,000) and (iv) directors and executive officers of the Company as a group:



|Name of Beneficial Owner (3)                                                                                                                                                                                                      | Amount and Nature of
Beneficial Ownership (1)                       | Percent of Class (2)       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ---------------------------
|John E. Nohren, Jr. and
Francis Weaver Nohren (4)(5)
Rose C. Smith (6)
David Paul Condra(8)
Jim R. Davisson(8)
John L. Finan(8)
Randal McClanahan(8)
David L. Zich(8)
All directors and executive officers
As a group (9 persons) | 4,038,938
2,891.109
30,000
50,000
100,000
517,000
880,000
8,507,047 | 11.7
8.4
*
*
*
1.5
2.5
24.6



*

Less than 1%

(1)

Represents sole voting and investment power unless otherwise indicated.

(2)

Based on approximately 34,539,942 shares of Company Common Stock outstanding as of June 30, 2005 after giving affect to the DesertView and Numera Stock Acquisition Agreement plus, as to each person listed, that portion of the unissued shares of Company Common Stock subject to outstanding options which may be exercised by such person, and as to all directors and executive officers as a group, unissued shares of Company Common Stock as to which the members of such group have the right to acquire beneficial ownership upon the exercise of stock options within the next 60 days, or 17,018,765 shares.

(3)

The address of each individual is in care of the Company.

(4)

May be deemed to be a "founder" of the Company for the purpose of the Securities Act.

(5)

Represents aggregate shares held between Mr. Nohren individually, his wife individually and shares held in joint tenancy. Includes 975,845 shares issued to Mr. Nohren and his wife in satisfaction of accrued obligations and exchange of outstanding options.

(1)

54,350 of the shares of common stock as set forth above are owned by Elliot Smith, husband of Rose C. Smith.  Includes 1,734,496 shares issued to Ms. Smith during 2005 in satisfaction of accrued compensatory obligations and in exchange for outstanding options.

(2)

Represents shares held directly and indirectly by Joe Cayre and his family pursuant to an agreement reached between the Company and the Good Times family of companies.

(3)

Represents shares issued in connection with Numera and DesertView Stock Acquisition Agreement.



ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Effective June 27, 2005, Innova entered into two Stock Acquisition Agreements. One Stock Acquisition Agreement was with DesertView. The other was with Numera.  In the Numera transaction, we issued 16,600,000 shares of our Common Stock to the shareholders of Numera in consideration for 100% of the issued and outstanding shares of Numera stock.  In the DesertView transaction, we issued 2,500,000 shares of our Common Stock to the shareholders of DesertView in consideration for 100% of the issued and outstanding shares of DesertView stock.  In connection with the closing of these transactions, the Company received $112,000 of working capital advances from affiliates of DesertView and Numera to meet our short-term obligations.



As a result of the DesertView and Numera transactions, both DesertView and Numera became wholly-owned subsidiaries of the Company.



In connection with the Stock Acquisition Agreements with Numera and DesertView, David L. Zich, John L. Finan, Randal McClanahan, Jim R. Davisson, and David Paul Condra joined Jack Nohren and Rose Smith as directors of Innova. In addition, David L. Zich becomes President and Jim R. Davisson Secretary/Treasurer of Innova.  Innova has relocated its corporate offices from Clearwater, Florida to Dallas, Texas.

During fiscal 2005 we issued 1,316,829 shares of our common stock to Rose Smith in exchange for accrued and unpaid salaries of $223,861.  In addition, in connection with the DesertView and Numera Stock Acquisition Agreements Ms. Smith also agreed to exchange 1,250,000 options to acquire common stock for 417,667 shares of our common stock.



During fiscal 2005 John Nohren agreed to accept 552,512 shares of our restricted common stock to satisfy approximately $93,927 of accrued unpaid consulting fees.  In addition, in connection with the DesertView and Numera Stock Acquisition Agreements Mr. Nohren agreed to exchange options to acquire 1,270,000 shares of our common stock for 423,333 shares of common stock.



ITEM 13.

EXHIBITS, LISTS AND REPORTS ON FORM 8-K



(a)

Exhibits.



|Number                                                                                                                                                                                | Title of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Location
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|3(a)
3(b)
4(a)
4(b)
4(c)
10(a)
10(b)
10(c)
10(d)

10(e)
10(f)
10(g)
10(h)

10(i)
10(j)

10(k)

10(l)
10(m)
10(n)

10(o)

10(p)

10(q)
10(r)

10(s)

10(t)


31.1

31.2



32




99.1 | Articles of Incorporation, as amended (1)
Bylaws (1)
Specimen Certificate (1)
1996 Incentive Stock Option Plan (1)
1999 Incentive Stock Option Plan (1)
[Reserved
Agreement with Rubbermaid Incorporated dated July 21, 1998 (1)
[Reserved]
Stock Purchase/Warrant Exchange Agreement with GoodTimes
Entertainment, Inc. dated October 11, 1997 (1)
Employment Agreement with Rose C. Smith dated June 30, 1997 (1)
Royalty Agreement with John E. Nohren, Jr. dated June 30, 1997 (1)
License Agreement with A. C. International dated May 21, 1998 (1)
Supply and Distribution Agreement with Bowline Family Products, Inc.
Dated September 26, 1997 (1)
[Reserved]
Purchase and Supply Agreement with Rose Group dated January 22,
1997 (terminated) (1)
Real Estate Lease with Carr Rubin Associates dated January 21,
1998 (1)
Stock Option Agreement with Rose Smith for unpaid 2002 salary (2)
Stock Option Agreement with Jack Nohren for 2002 unpaid royalties (2)
Letter Agreement between the Company and Rose Smith regarding fiscal 2003 compensation arrangement (2)
Letter Agreement between the Company and Jack Nohren regarding fiscal 2003 royalty arrangement (2)
Agreement by and between Sawyer Products, Curt Avery and the Company regarding $400,000 loan and issuance of 1,2000 Warrants (2)
Distribution Agreement with CamelBak Products (2)
Stock Acquisition Agreement by and between Numera Software Corporation, and Innova Pure Water, Inc. (3)
Stock Acquisition Agreement by and between DesertView Management Services, Inc. and Innova Pure Water, Inc. (3)
Letter Agreement by and between Innova Pure Water, Inc., Rose Smith and Jack Nohren in connection with issuance of shares in exchange for past due compensation and outstanding option as part of the DesertView and Numera Stock Acquisition Agreements.
Certification of the Chief Executive Officer, dated October___, 2005. (4)
(This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 31.1 pursuant to SEC interim filing guidance.) (4)
Certification of the Chief Financial Officer, dated October ___, 2005.  (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 31.2 pursuant to SEC interim filing guidance.) (4)
Written Statements of the Chief Executive Officer and Chief Financial Officer, dated October___, 2005. (4)
(This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b) (32) (iii) of Regulation S-K as Exhibit 32 pursuant to SEC interim filing guidance. (4)
Code of Ethics. (4) |         



(1)

All of the items below are incorporated by reference to the Companys Registration Statement on Form 10SB (SEC File No. 000-14988).

(2)

Incorporated by reference into prior Form 10-KSB filing for the years so indicated.

(3)

See Form 8-K June 27, 2005.

(4)

Filed herewith.



(a)

Reports on Form 8-K



The Company filed four reports on Form 8-K related to activities during the fiscal quarter ended June 30, 2005:



|               |  |                                                                                                                                                                                                                                                                                        
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date of Report |  | Items Reported                                                                                                                                                                                                                                                                         
|Nov. 22, 2004  |  | Departure of Director and Interim Chief Financial Officer-E.J. Mersis                                                                                                                                                                                                                  
|               | 
|June 27, 2005  |  | -Completion of Acquisition or Disposition of Assets-Numera and Desertview
-Unregistered Shares of Equity Securities
-Departures of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers
Regulation FD Disclosure
Financial Statements and Exhibits
|               | 
|June 29, 2005  |  | Changes in Registrants Certifying Accountants                                                                                                                                                                                                                                         
|               | 
|               |  |                                                                                                                                                                                                                                                                                        



ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES



COMPENSATION OF AUDITORS



There was no compensation accrued or paid to auditors during the years ended June 30, 2005 and 2004 for audit or audit related fees, tax fees and any other fees.







Signatures



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



INNOVA PURE WATER, INC





Dated:

October 31, 2006

By:   /s/ David L. Zich

David L. Zich

President, Director



Dated:

October 31, 2006

By:   /s/ Jim R. Davisson

Jim R. Davisson

Chief Financial Officer,

Secretary-Treasurer, Director



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.







Dated:

October 31, 2006

By:/s/ John L. Finan



Director



Dated:

October 31, 2006

By:/s/ Randal McClanahan



Director



Dated:

October 31, 2006

By:/s/ David L. Zich



Director



Dated:

October 31, 2006

By:/s/ David Paul Condra



Director



Dated:

October 31, 2006

By:/s/ Rose C. Smith



Director



Dated:

October 31, 2006

By:/s/ Jim R. Davisson



Director