UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q





x
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended April 30, 2009





 ̈
            Transition
      Report pursuant to 13 or 15(d) of the Securities Exchange Act of
      1934





For the
transition period from  to





Commission
File
Number               000-33391





EV
INNOVATIONS, INC.


(Exact
name of Small Business Issuer as specified in its charter)





Nevada
                  
                  88-0490890(State
      or other jurisdiction of
                  
                  (IRS
      Employer Identification No.)incorporation
      or organization)





4894 Lone Mountain #168, Las Vegas
      NV
                
                89130(Address
      of principal executive offices)
                
                (Postal
      or Zip Code)





Issuer's
telephone number, including area code: 702-425-7376











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
for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing requirements for
the past 90 days. x
Yes  ̈
No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).    Yes  ̈    No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company.  (Check
One):





Large
      accelerated filer   ̈
                
                Accelerated
      filer   ̈Non-accelerated
      filer  ̈
                
                Smaller
      reporting company  x(Do
      not check if a smaller reporting
company)





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





APPLICABLE
ONLY TO CORPORATE ISSUERS




The
number of shares outstanding the issuer's common stock, $.001 par value, was
20,468,591 as of June 11, 2009.








EV
INNOVATIONS, INC.





INDEX


Page No.





TABLE OF
CONTENTS





Page
      No.PART
      I. FINANCIAL INFORMATIONITEM
      I - Unaudited Consolidated Financial StatementsConsolidated
      Balance Sheets as of April 30, 2009 and July 31, 2008
      (Unaudited)
                    
                    
                    4Consolidated
      Statements of Operations for the Nine and Three Months Ended April 30,
      2009 and 2008 (Unaudited)
                    
                    
                    5Consolidated
      Statement of Stockholders Deficiency (Unaudited)
                    
                    
                    6Consolidated
      Statements of Cash Flows for the Nine Months Ended April 30, 2009 and 2008
      (Unaudited)
                    
                    
                    7Notes
      to Unaudited Consolidated Financial Statements
                    
                    
                    8ITEM
      2 - Management's Discussion and Analysis of Financial Condition and
      Results of Operations.
                    
                    
                    21ITEM
      3 – Quantitative and Qualitative Disclosures About Market
    Risk
                    
                    
                    26ITEM
      4T– Controls and Procedures.
                    
                    
                    27PART
      II. OTHER INFORMATIONITEM
      6 - Exhibits
                    
                    
                    27EXHIBIT
      31 - Certification pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002EXHIBIT
      32 - Certification pursuant to Section 906 of the Sarbanes- Oxley Act of
      2002


2


PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements
 
 Certain
information and footnote disclosures required under accounting principles
generally accepted in the United States of America have been condensed or
omitted from the following consolidated financial statements pursuant to the
rules and regulations of the Securities and Exchange Commission. It is suggested
that the following consolidated financial statements be read in conjunction with
the year-end consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year  ended July 31,
2008.
 
 The
results of operations for the nine months ended April 30, 2009 and 2008 are not
necessarily indicative of the results for the entire fiscal year or for any
other period.


3


EV INNOVATIONS, INC.
 A
Development Stage Company
 
 Consolidated
Balance Sheets
 (UNAUDITED)
 
 April 30,
                          
                          
                          July 31,2009
                          
                          
                          2008ASSETSCurrent
      assets:Cash
                          
                          $
                          6,196
                          
                          
                          $
                          101,095Accounts
      receivable, net of allowance for doubtful accounts of $0
                          
                          
                          48,310
                          
                          
                          
                          13,601Inventories
                          
                          
                          299,413
                          
                          
                          
                          287,310Employee
      advances
                          
                          
                          2,114
                          
                          
                          
                          -Other
      current assets
                          
                          
                          9,102
                          
                          
                          
                          69,119Total
      current assets
                          
                          
                          365,135
                          
                          
                          
                          471,125Property
      and equipment, net
                          
                          
                          2,065,316
                          
                          
                          
                          2,014,580Other
      long term assets:Other
      assets
                          
                          
                          1,600
                          
                          
                          
                          51,600Deferred
      patent costs
                          
                          
                          21,042
                          
                          
                          
                          19,903Total
      other long term assets
                          
                          
                          22,642
                          
                          
                          
                          71,503$
                          2,453,093
                          
                          
                          $
                          2,557,208LIABILITIES AND STOCKHOLDERS'
      DEFICIENCYCurrent
      liabilities:Current
      portion of long-term debt
                          
                          $
                          32,538
                          
                          
                          $
                          32,422Accounts
      payable and accrued expenses
                          
                          
                          707,951
                          
                          
                          
                          330,183Customer
      deposits
                          
                          
                          470,892
                          
                          
                          
                          149,160Advances
      from related parties
                          
                          
                          163,948
                          
                          
                          
                          38,000Total
      current liabilities
                          
                          
                          1,375,329
                          
                          
                          
                          549,765Long-term
      debt - less current portion above
                          
                          
                          7,261,292
                          
                          
                          
                          6,135,408Commitments
      and contingencies
                          
                          
                          -
                          
                          
                          
                          -Stockholders'
      deficiency:Preferred
      stock, $.001 par value, 5,000,000 shares authorized, no shares
      issued
                          
                          
                          -
                          
                          
                          
                          -Common
      stock, $.001 par value, 50,000,000 authorized; outstanding 20,468,591 at
      April 30, 2009 and 7,782,419 at July 31, 2008,
respectively
                          
                          
                          20,469
                          
                          
                          
                          7,781Additional
      paid-in-capital
                          
                          
                          50,453,637
                          
                          
                          
                          47,806,075Deficit
      accumulated during the development stage
                          
                          
                          (56,645,095
                          )
                          
                          
                          (51,947,451
                          )Cumulative
      other comprehensive income (loss)
                          
                          
                          (12,539
                          )
                          
                          
                          5,630Total
      stockholders' deficiency
                          
                          
                          (6,183,528
                          )
                          
                          
                          (4,127,965
                          )$
                          2,453,093
                          
                          
                          $
                          2,557,208
 
 SEE
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


4


EV INNOVATIONS, INC.
 A
Development Stage Company
 
 Consolidated
Statements of Operations
 (UNAUDITED)
 
 INCEPTIONNINE
      MONTHS ENDED
                              
                              
                              THREE
      MONTHS ENDED
                              
                              
                              (April
      12, 2000)April
      30,
                              
                              
                              April
      30,
                              
                              
                              THROUGH2009
                              
                              
                              2008
                              
                              
                              2009
                              
                              
                              2008
                              
                              
                              April
      30, 2009Sales
                              
                              $
                              243,141
                              
                              
                              $
                              208,703
                              
                              
                              $
                              22,085
                              
                              
                              $
                              -
                              
                              
                              $
                              2,212,195Costs
      and expenses:Cost
      of sales
                              
                              
                              403,322
                              
                              
                              
                              262,035
                              
                              
                              
                              112,781
                              
                              
                              
                              -
                              
                              
                              
                              2,936,885General
      and administrative
                              
                              
                              3,140,944
                              
                              
                              
                              3,016,426
                              
                              
                              
                              2,835,849
                              
                              
                              
                              1,730,006
                              
                              
                              
                              45,600,605Research
      and development
                              
                              
                              820,667
                              
                              
                              
                              1,058,180
                              
                              
                              
                              657,712
                              
                              
                              
                              657,350
                              
                              
                              
                              8,192,360Loss
      from sale of other assets
                              
                              
                              -
                              
                              
                              
                              1,985
                              
                              
                              
                              -
                              
                              
                              
                              1,918
                              
                              
                              
                              314,3814,364,933
                              
                              
                              
                              4,338,626
                              
                              
                              
                              3,606,342
                              
                              
                              
                              2,389,274
                              
                              
                              
                              57,044,231Loss
      from continuing operations
                              
                              
                              (4,121,792
                              )
                              
                              
                              (4,129,923
                              )
                              
                              
                              (3,584,257
                              )
                              
                              
                              (2,389,274
                              )
                              
                              
                              (54,832,036
                              )Other
      income (expense):Interest
      expense
                              
                              
                              (634,747
                              )
                              
                              
                              (142,349
                              )
                              
                              
                              (213,649
                              )
                              
                              
                              (97,264
                              )
                              
                              
                              (1,607,298
                              )Interest
      income
                              
                              
                              2,293
                              
                              
                              
                              -
                              
                              
                              
                              7,077
                              
                              
                              
                              -
                              
                              
                              
                              2,293Other
      income
                              
                              
                              60,166
                              
                              
                              
                              413
                              
                              
                              
                              36,665
                              
                              
                              
                              (14,408
                              )
                              
                              
                              1,006,554Gain
      from sale of subsidiaries
                              
                              
                              -
                              
                              
                              
                              162,129
                              
                              
                              
                              -
                              
                              
                              
                              162,129
                              
                              
                              
                              -Bad
      debt
                              
                              
                              (3,564
                              )
                              
                              
                              -
                              
                              
                              
                              (3,564
                              )
                              
                              
                              -
                              
                              
                              
                              (3,564
                              )Net
      loss from continuing operations
                              
                              
                              (4,697,644
                              )
                              
                              
                              (4,109,730
                              )
                              
                              
                              (3,757,728
                              )
                              
                              
                              (2,338,817
                              )
                              
                              
                              (55,434,051
                              )Provision
      for income tax
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss from continuing operations
                              
                              
                              (4,697,644
                              )
                              
                              
                              (4,109,730
                              )
                              
                              
                              (3,757,728
                              )
                              
                              
                              (2,338,817
                              )
                              
                              
                              (55,434,051
                              )Discontinued
      operations:Loss
      from discontinued operations
                              
                              
                              -
                              
                              
                              
                              (542,534
                              )
                              
                              
                              -
                              
                              
                              
                              61,144
                              
                              
                              
                              (1,320,313
                              )Gain
      on disposal of discontinued operations
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              90,069Net
      loss on discontinued operations
                              
                              
                              -
                              
                              
                              
                              (542,534
                              )
                              
                              
                              -
                              
                              
                              
                              61,144
                              
                              
                              
                              (1,230,244
                              )Loss
      from continued and discontinued operations
                              
                              
                              (4,697,644
                              )
                              
                              
                              (4,652,264
                              )
                              
                              
                              (3,757,728
                              )
                              
                              
                              (2,277,673
                              )
                              
                              
                              (56,664,295
                              )Minority
      interest share of loss of consolidated subsidiariesfrom
      discontinued operations
                              
                              
                              -
                              
                              
                              
                              2,377
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              19,200Net
      loss
                              
                              
                              (4,697,644
                              )
                              
                              
                              (4,649,887
                              )
                              
                              
                              (3,757,728
                              )
                              
                              
                              (2,277,673
                              )
                              
                              
                              (56,645,095
                              )Other
      comprehensive income (loss):Foreign
      currency translation
                              
                              
                              2,473
                              
                              
                              
                              5,579
                              
                              
                              
                              3,323
                              
                              
                              
                              7,270
                              
                              
                              
                              8,103Net
      comprehensive loss
                              
                              $
                              (4,695,171
                              )
                              
                              $
                              (4,644,308
                              )
                              
                              $
                              (3,754,405
                              )
                              
                              $
                              (2,270,403
                              )
                              
                              $
                              (56,636,992
                              )Net
      loss per share - basic and diluted - continuing operations
                              
                              $
                              (0.43
                              )
                              
                              $
                              (0.79
                              )
                              
                              $
                              (0.22
                              )
                              
                              $
                              (0.45
                              )Weighted
      shares outstanding - basic and diluted - continuing
    operations
                              
                              
                              10,912,562
                              
                              
                              
                              5,222,390
                              
                              
                              
                              17,383,302
                              
                              
                              
                              5,238,069Net
      gain (loss) per share - basic and diluted - discontinued
      operations
                              
                              $
                              -
                              
                              
                              $
                              (0.10
                              )
                              
                              $
                              -
                              
                              
                              $
                              0.01Weighted
      shares outstanding - basic and diluted - discontinued
      operations
                              
                              
                              10,912,562
                              
                              
                              
                              5,222,390
                              
                              
                              
                              17,383,302
                              
                              
                              
                              5,238,069
  SEE
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


5


EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 Consolidated
Statement of Stockholder's Equity (Deficiency)
 (UNAUDITED)
  DeficitDeficitAccumulated
                            
                            
                            
                            
                            
                            CumulativeAdditional
                            
                            
                            During
      the
                            
                            
                            
                            
                            
                            OtherCommon
      stock
                            
                            
                            
                            
                            
                            Paid-in
                            
                            
                            Development
                            
                            
                            Subscription
                            
                            
                            ComprehensiveShares
                            
                            
                            Amount
                            
                            
                            Capital
                            
                            
                            Stage
                            
                            
                            Receivable
                            
                            
                            Income
      (loss)
                            
                            
                            TotalBalance
      April 12, 2000
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Stock
      issuancesIssuance
      of stock for cash
                            
                            
                            36,214
                            
                            
                            
                            362
                            
                            
                            
                            88,933
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            89,295Net
      loss for the period
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (7,773
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (7,773
                            )Balance
      January 31, 2001
                            
                            
                            36,214
                            
                            
                            
                            362
                            
                            
                            
                            88,933
                            
                            
                            
                            (7,773
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            81,522Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (65,618
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (65,618
                            )Balance
      January 31, 2002
                            
                            
                            36,214
                            
                            
                            
                            362
                            
                            
                            
                            88,933
                            
                            
                            
                            (73,391
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            15,904Stock
      issuancesNon-cash
      issuance of common stock
                            
                            
                            171,429
                            
                            
                            
                            (154
                            )
                            
                            
                            400,159
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            400,005Value
      of rent donated by a related party
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            6,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            6,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (825,493
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (825,493
                            )Balance
      January 31, 2003
                            
                            
                            207,643
                            
                            
                            
                            208
                            
                            
                            
                            495,092
                            
                            
                            
                            (898,884
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (403,584
                            )Stock
      issuancesNon-cash
      issuance of stock
                            
                            
                            48,214
                            
                            
                            
                            48
                            
                            
                            
                            (48
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Employee
      stock based compensation
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            4,660,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (4,660,000
                            )
                            
                            
                            -Exercise
      of options, split adjusted
                            
                            
                            33,686
                            
                            
                            
                            34
                            
                            
                            
                            589,466
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            589,500Expenses
      paid with stock
                            
                            
                            107
                            
                            
                            
                            -
                            
                            
                            
                            8,750
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            8,750Amortization
      of deferred stock compensation
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            4,394,000
                            
                            
                            
                            4,394,000Issuance
      of common stock for cash and note
                            
                            
                            2,025
                            
                            
                            
                            2
                            
                            
                            
                            199,998
                            
                            
                            
                            -
                            
                            
                            
                            (50,000
                            )
                            
                            
                            -
                            
                            
                            
                            150,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (5,261,224
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (5,261,224
                            )Balance
      January 31, 2004
                            
                            
                            291,675
                            
                            
                            
                            292
                            
                            
                            
                            5,953,258
                            
                            
                            
                            (6,160,108
                            )
                            
                            
                            (50,000
                            )
                            
                            
                            (266,000
                            )
                            
                            
                            (522,558
                            )Stock
      issuancesReturn
      of non-cash issuance
                            
                            
                            (48,214
                            )
                            
                            
                            (48
                            )
                            
                            
                            48
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Stock
      redemption
                            
                            
                            (42,857
                            )
                            
                            
                            (43
                            )
                            
                            
                            43
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Employee
      stock based compensation
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            7,071,467
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            7,071,467Exercise
      of options
                            
                            
                            51,090
                            
                            
                            
                            51
                            
                            
                            
                            925,244
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            925,295Stock
      re-issuance
                            
                            
                            42,857
                            
                            
                            
                            43
                            
                            
                            
                            (43
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Amortization
      of deferred stock compensation
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            266,000
                            
                            
                            
                            266,000Basis
      of assets acquired less then purchase price
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (54,656
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (54,656
                            )Stock
      dividend
                            
                            
                            29,455
                            
                            
                            
                            29
                            
                            
                            
                            (29
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Collection
      of receivable
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            50,000
                            
                            
                            
                            -
                            
                            
                            
                            50,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (12,586,255
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (12,586,255
                            )Balance
      January 31, 2005
                            
                            
                            324,006
                            
                            
                            
                            324
                            
                            
                            
                            13,895,332
                            
                            
                            
                            (18,746,363
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (4,850,707
                            )Stock
      issuanceExercise
      of options
                            
                            
                            452
                            
                            
                            
                            -
                            
                            
                            
                            60,800
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            60,800Sale
      of stock for cash
                            
                            
                            190
                            
                            
                            
                            -
                            
                            
                            
                            20,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            20,000Stock
      issued for related party advances
                            
                            
                            23,810
                            
                            
                            
                            24
                            
                            
                            
                            3,384,570
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,384,594Stock
      dividend
                            
                            
                            17,423
                            
                            
                            
                            17
                            
                            
                            
                            (17
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Options
      issued for expenses
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            250,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            250,000Net
      loss for the period
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,918,739
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,918,739
                            )Balance
      July 31, 2005
                            
                            
                            365,882
                            
                            
                            
                            365
                            
                            
                            
                            17,610,685
                            
                            
                            
                            (21,665,102
                            )
                            
                            
                            
                            
                            
                            
                            -
                            
                            
                            
                            (4,054,052
                            )Stock
      issuancesValue
      of stock options issued
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            7,577,255
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            7,577,255Exercise
      of options
                            
                            
                            70,024
                            
                            
                            
                            70
                            
                            
                            
                            9,435,930
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            9,436,000Stock
      issued for debt
                            
                            
                            606,310
                            
                            
                            
                            606
                            
                            
                            
                            2,999,393
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,999,999Stock
      dividend
                            
                            
                            190,886
                            
                            
                            
                            191
                            
                            
                            
                            (191
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (13,126,909
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (13,126,909
                            )Balance
      July 31, 2006
                            
                            
                            1,233,101
                            
                            
                            
                            1,232
                            
                            
                            
                            37,623,072
                            
                            
                            
                            (34,792,011
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,832,293Stock
      issuancesValue
      of stock options issued (valued at $1.05 per share)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,103,600
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,103,600Exercise
      of options (valued at $3.55 per share)
                            
                            
                            57,429
                            
                            
                            
                            57
                            
                            
                            
                            4,281,243
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            4,281,300Stock
      issued for debt
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            -
                            
                            
                            
                            -Stock
      dividends
                            
                            
                            442,828
                            
                            
                            
                            443
                            
                            
                            
                            (443
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (10,619,757
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (10,619,757
                            )Foreign
      currency transactions
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (7,860
                            )
                            
                            
                            (7,860
                            )Balance
      July 31, 2007
                            
                            
                            1,880,977
                            
                            
                            
                            1,880
                            
                            
                            
                            46,607,324
                            
                            
                            
                            (45,411,768
                            )
                            
                            
                            -
                            
                            
                            
                            (7,860
                            )
                            
                            
                            1,189,576Stock
      issuancesValue
      of stock options issued (valued at $1.8933 per share)
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            804,652
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            804,652Common
      stock issued as collateral on loan
                            
                            
                            476,190
                            
                            
                            
                            476
                            
                            
                            
                            (476
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Reverse
      stock split adjustment
                            
                            
                            138
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      stock issued as collateral on loan
                            
                            
                            5,357,142
                            
                            
                            
                            5,357
                            
                            
                            
                            (5,357
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Exercise
      of options  (valued at $1.96 per share)
                            
                            
                            67,972
                            
                            
                            
                            68
                            
                            
                            
                            399,932
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            400,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (6,535,683
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (6,535,683
                            )Foreign
      currency transactions
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            13,490
                            
                            
                            
                            13,490Balance
      July 31, 2008
                            
                            
                            7,782,419
                            
                            
                            
                            7,781
                            
                            
                            
                            47,806,075
                            
                            
                            
                            (51,947,451
                            )
                            
                            
                            -
                            
                            
                            
                            5,630
                            
                            
                            
                            (4,127,965
                            )Stock
      issuancesValue
      of stock options issued (valued at $0.90 per share)
                            
                            
                            
                            
                            
                            
                            -
                            
                            
                            
                            1,746,900
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,746,900Exercise
      of options (valued at $0.90 per share)
                            
                            
                            1,167
                            
                            
                            
                            1
                            
                            
                            
                            (1
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Reverse
      stock split adjustment
                            
                            
                            327
                            
                            
                            
                            2
                            
                            
                            
                            (2
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      stock issued as collateral on loan
                            
                            
                            11,666,664
                            
                            
                            
                            11,667
                            
                            
                            
                            (11,667
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Exercise
      of options (valued at $0.90 per share)
                            
                            
                            1,018,014
                            
                            
                            
                            1,018
                            
                            
                            
                            912,332
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            913,350Net
      (loss) for the period
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (4,697,644
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (4,697,644
                            )Foreign
      currency transactions
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (18,169
                            )
                            
                            
                            (18,169
                            )Balance
      April 30, 2009
                            
                            
                            20,468,591
                            
                            
                            $
                            20,469
                            
                            
                            $
                            50,453,637
                            
                            
                            $
                            (56,645,095
                            )
                            
                            $
                            -
                            
                            
                            $
                            (12,539
                            )
                            
                            $
                            (6,183,528
                            )
  SEE
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


6


EV INNOVATIONS, INC.
 A
Development Stage Company
 
 Consolidated
Statements of Cash Flows
 (UNAUDITED)
 
 Inception(April
      12, 2000)NINE
      MONTHS ENDED
                                    
                                    
                                    throughApril
      30,
                                    
                                    
                                    April
      30,2009
                                    
                                    
                                    2008
                                    
                                    
                                    2009Cash
      provided (used in) Operating Activities:Net
      (loss)
                                    
                                    $
                                    (4,697,644
                                    )
                                    
                                    $
                                    (4,649,887
                                    )
                                    
                                    $
                                    (56,645,095
                                    )Adjustments
      to reconcile net (loss) to cashDepreciation
      and amortization
                                    
                                    
                                    69,534
                                    
                                    
                                    
                                    90,674
                                    
                                    
                                    
                                    889,500Bad
      debt expense
                                    
                                    
                                    -
                                    
                                    
                                    
                                    9,678
                                    
                                    
                                    
                                    186,582Gain/loss
      of sale of other assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    315,169Minority
      interest in income
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (2,377
                                    )
                                    
                                    
                                    -Non
      cash stock-based compensation
                                    
                                    
                                    1,746,900
                                    
                                    
                                    
                                    804,652
                                    
                                    
                                    
                                    26,297,193(Increase)
      in accounts receivable
                                    
                                    
                                    (34,709
                                    )
                                    
                                    
                                    (82,699
                                    )
                                    
                                    
                                    (234,892
                                    )(Increase)
      in inventories
                                    
                                    
                                    (12,103
                                    )
                                    
                                    
                                    220,845
                                    
                                    
                                    
                                    (299,413
                                    )(Increase)
      in employee advances
                                    
                                    
                                    (2,114
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (2,114
                                    )(Increase)
      decrease in prepaid expenses and other assets
                                    
                                    
                                    60,017
                                    
                                    
                                    
                                    60,223
                                    
                                    
                                    
                                    (9,102
                                    )Loss
      on sale of property and equipment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (1,918
                                    )
                                    
                                    
                                    -Decrease
      in other assets
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    (5,061
                                    )
                                    
                                    
                                    -Increase
      (decrease) in accounts payable and accrued expenses
                                    
                                    
                                    916,087
                                    
                                    
                                    
                                    (154,630
                                    )
                                    
                                    
                                    1,246,270Increase
      in customer deposits
                                    
                                    
                                    321,732
                                    
                                    
                                    
                                    65,800
                                    
                                    
                                    
                                    470,892(Increase)
      decrease in deferred revenue
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (2,990
                                    )
                                    
                                    
                                    -(Gain)
      on sale of subsidiary
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (162,129
                                    )
                                    
                                    
                                    (90,069
                                    )Loss
      from discontinued operations
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,320,313Cash
      used in operating activities
                                    
                                    
                                    (1,582,300
                                    )
                                    
                                    
                                    (3,809,819
                                    )
                                    
                                    
                                    (26,554,766
                                    )Cash
      provided by (used in) Investing Activities:Increase
      in other assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    41,224
                                    
                                    
                                    
                                    (1,452,353
                                    )Proceeds
      from sale of other assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,136,372Proceeds
      from sale of subsidiary
                                    
                                    
                                    -
                                    
                                    
                                    
                                    215,000
                                    
                                    
                                    
                                    215,000Purchase
      of property and equipment
                                    
                                    
                                    (120,270
                                    )
                                    
                                    
                                    (20,469
                                    )
                                    
                                    
                                    (1,259,102
                                    )Proceeds
      from sale of property and equipment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    29,005
                                    
                                    
                                    
                                    108,318Investment
      in subsidiaries
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (52,871
                                    )
                                    
                                    
                                    (688,220
                                    )Increase
      in deferred patent costs
                                    
                                    
                                    (1,139
                                    )
                                    
                                    
                                    (21,987
                                    )
                                    
                                    
                                    (21,042
                                    )Cash
      (used in) provided by investing activities
                                    
                                    
                                    (121,409
                                    )
                                    
                                    
                                    189,902
                                    
                                    
                                    
                                    (1,961,027
                                    )Cash
      provided (used in) by Financing Activities:Proceeds
      from the exercise of stock options
                                    
                                    
                                    -
                                    
                                    
                                    
                                    400,000
                                    
                                    
                                    
                                    15,692,895Collection
      of stock receivable
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    50,000Proceeds
      from the issuance of debt
                                    
                                    
                                    610,951
                                    
                                    
                                    
                                    4,421,662
                                    
                                    
                                    
                                    9,725,664Advances
      from related parties
                                    
                                    
                                    1,722,304
                                    
                                    
                                    
                                    3,539,995
                                    
                                    
                                    
                                    14,392,111Payments
      of related party advances
                                    
                                    
                                    (683,006
                                    )
                                    
                                    
                                    (3,666,162
                                    )
                                    
                                    
                                    (10,155,289
                                    )Payments
      of debt
                                    
                                    
                                    (23,270
                                    )
                                    
                                    
                                    (1,071,601
                                    )
                                    
                                    
                                    (1,430,153
                                    )Proceeds
      from the issuance of common stock
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    259,300Cash
      provided by financing activities
                                    
                                    
                                    1,626,979
                                    
                                    
                                    
                                    3,623,894
                                    
                                    
                                    
                                    28,534,528Effect
      of exchange rate changes on cash and cash equivalents
                                    
                                    
                                    (18,169
                                    )
                                    
                                    
                                    7,860
                                    
                                    
                                    
                                    (12,539
                                    )Net
      increase (decrease) in cash
                                    
                                    
                                    (94,899
                                    )
                                    
                                    
                                    11,837
                                    
                                    
                                    
                                    6,196Cash
      at beginning of period
                                    
                                    
                                    101,095
                                    
                                    
                                    
                                    3,775
                                    
                                    
                                    
                                    -Cash
      at end of period
                                    
                                    $
                                    6,196
                                    
                                    
                                    $
                                    15,612
                                    
                                    
                                    $
                                    6,196Supplemental
      information:Cash
      paid during the year for:Interest
      paid
                                    
                                    $
                                    54,389
                                    
                                    
                                    $
                                    45,006Income
      taxes paid
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Non
      - cash financing activities:Fixed
      assets acquired by the issuance of debt
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    1,300,000Shares
      issued for related party advances
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    3,000,000Accrued
      expenses charged to long term debt
                                    
                                    $
                                    28,850
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    28,850
 
 SEE
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


7


EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Note
1. Financial statement presentation
 
 The
financial statements have been prepared in accordance with Securities Exchange
Commission requirements for interim financial statements.  Therefore,
they do not include all information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements.  These financial statements should be read in conjunction
with the financial statements and notes thereto contained in the Company's
Annual Report on form 10-K for the year ended July 31, 2008 as filed with the
Securities Exchange Commission.
 
 The
results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for the full
year.  In the opinion of management, the information contained herein
reflects all adjustments necessary to make the results of operations for the
interim period a fair statement of such operations.  All such
adjustments are of a normal recurring nature.
 
 History
and Nature of Business
 EV
Innovations, Inc. (formerly Hybrid Technologies, Inc.) was incorporated under
the laws of the State of Nevada on April 12, 2000. EV Innovations, Inc.'s (the
“Company”) original business was the exploration and development of mineral
interests. The Company abandoned these interests in 2003.
 
 The
Company is currently pursuing the development and marketing of electric powered
vehicles and products based on the advanced lithium battery technology it has
developed. At April 30, 2009 the Company deems itself a development stage
company as planned principal operations are minimal in its primary line of
business.
 
 On April
16, 2008, the Company sold their controlling interest of approximately 69% of
the outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc.,
“SPI”). Prior to April 16, 2008, SPI was a related party who provided
telecommunication services to business and residential customers utilizing VOIP
technology and currently is researching and developing rechargeable lithium ion
batteries.
 
 Effective
April 15, 2008, the Company entered into a license agreement with SPI providing
for their license to SPI of their patent applications and technologies for
rechargeable lithium ion batteries for electric vehicles and other applications
(“licensed products”). Under the license agreement, the Company has the right to
purchase their requirements of lithium ion batteries from SPI, and their
requirements of lithium ion batteries shall be supplied by SPI in preference to,
and on a priority basis as compared with, supply and delivery arrangements in
effect for other customers of SPI. The Company’s cost for lithium ion batteries
purchased from SPI shall be SPI’s actual manufacturing costs for such batteries
for the fiscal quarter of SPI in which the Company’s purchase takes
place.
 
 SPI has
agreed to invest a minimum of $1,500,000 in each of the next two years in
development of the technology for the Licensed Products. To date, investments
have been made in the amount of $180,734. If the SPI does not make the required
investments, it will be in default under the license agreement; the Company
would have the right to terminate the license agreement.
  8
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Basis
of presentation
 The
Company’s financial statements for the nine months ended April 30, 2009 have
been prepared on a going concern basis which contemplates the realization of
assets and settlement of liabilities and commitments in the normal course of
business. The Company had $243,141 of revenue for the nine months ending April
30, 2009, and as of April 30, 2009, there was a stockholders’ deficiency of
approximately $6.2 million. Management recognized that the Company’s continued
existence is dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing and revenue to cover expenses as the
Company continues to incur losses.
 
 The
Company’s business is subject to most of the risks inherent in the establishment
of a new business enterprise. The likelihood of the Company’s success must be
considered in light of expenses, difficulties, delays and unanticipated
challenges encountered in connection with the formation of a new business,
raising operating and development capital, and the marketing of new
products.  There is no assurance the Company will ultimately achieve a
profitable level of operations.
 
 The
Company presently does not have sufficient liquid assets to finance its
anticipated funding needs and obligations.  The Company’s continued
existence is dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing and achieve a level of sales adequate to
support its cost structure. Management is actively seeking additional capital to
ensure the continuation of its current activities and complete its proposed
activities. However, there is no assurance that additional capital will be
obtained. These uncertainties raise substantial doubt about the ability of the
Company to continue as a going concern. The accompanying financial statements do
not include any adjustments that might result from the outcome of these
uncertainties should the Company be unable to continue as a going
concern.
 
 SIGNIFICANT
ACCOUNTING POLICIES
 
 Basis
of consolidation
 The
consolidated financial statements included the accounts and records of the
Company and its wholly-owned and majority-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated. The Company does
not have any special purpose entities.
 
 Where the
Company’s ownership is less than 100 percent, the minority ownership interests
are reported in the Consolidated Balance Sheets as a liability.  The
Company record minority interest expense which reflects the portion of the
earnings (loss) of majority owned operations which are applicable to the
minority interest partners. The minority ownership of the Company’s earnings is
classified as “Minority interest share of (earnings) loss of consolidated
subsidiaries” from discontinued operations in the Consolidated Statements of
Operations.
 
 The
following is a listing of the Company's subsidiaries and its ownership
interests:
 
 Global
      Electric, Corp.
                    
                    
                    67.57
                    %R
      Electric Car, Co.
                    
                    
                    67.57
                    %Solium
      Power, Corp.
                    
                    
                    67.57
                    %Hybrid
      Technologies USA Distributing Inc.
                    
                    
                    100.00
                    %Hybrid
      Electric Vehicles India Pvt. Ltd.
                    
                    
                    100.00
                    %
 
 Estimates
 The
preparation of financial statements prepared in accordance with the accounting
standards 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. Actual results could differ from those
estimates.
  9
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Financial
instruments
 The fair
value of accounts receivables, accounts payable and accrued expenses and
advances from related parties approximates fair value based on their short
maturities. The fair value of notes payable approximate fair value based the
value of other notes having the same or similar terms, interest rates and
collateral.
 
 Accounts
receivables
 The
Company provides credit to customers in the normal course of business. An
allowance for accounts receivable is estimated by management based in part on
the aging of receivables and historical transactions. Periodically management
reviews accounts receivable for accounts that appear to be uncollectible and
writes off these uncollectible balances against the allowance
accordingly.
 
 Inventories
 Inventories
are stated at the lower of cost or market. Cost is based on the specific
identification method.
 
 Property
and equipment
 Property
and equipment are recorded at cost less accumulated depreciation. Depreciation
of property and equipment are accounted for by accelerated methods over the
following estimated useful lives:
 
 Lives
                
                MethodsBuilding
      improvements
                
                39
      years
                
                Straight
      lineFurniture
      and fixtures
                
                10
      years
                
                AcceleratedSoftware
                
                3-5
      years
                
                Straight
      lineComputers
                
                5
      years
                
                Straight
      line
 
 Deferred
patent costs
 The
Company capitalizes costs directly incurred in pursuing patent applications as
deferred patent costs. When such applications result in an issued patent, the
related costs are amortized over the remaining legal life of the patents, which
is assumed to be 17 years, using the straight-line method. On a quarterly basis,
the Company reviews the issued patents and pending patent applications and if
the Company determines to abandon a patent application, or an issued patent no
longer has economic value, the unamortized balance in deferred patent costs
relating to that patent is immediately expensed. As of April 30, 2009 there were
only pending patent applications.
 
 Stock
based compensation
 The
Company issues stock options to employees and other certain service providers
under stockholder approved stock option programs that provide the right to
purchase the Company’s stock pursuant to stock purchase programs. The Company
also issued common stock for services performed.  The fair value of
the stock options issued is estimated on the date of grant using the Black
Scholes Option Pricing Model.  The fair value of common stock issued
for services is estimated on the date of issuance based on the value of the
stock issued or the consideration received.
  10
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Revenue
recognition
 The
Company recognizes revenue in accordance with the guidance contained in SEC
Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements"
and other relevant accounting literature.  Revenue is recognized when
the product has been delivered and title and risk of loss have passed to the
customer, collection of the resulting receivable is deemed reasonably assured by
management, persuasive evidence of an arrangement exists and the sale price is
fixed and determinable.
 
 Shipping
and handling
 Shipping
and handling costs related to services and product sales are expensed as
incurred.
 
 Advertising
 Advertising
costs are expensed as incurred and are included in general and administrative
expenses. Total advertising expenditures for the nine months ended April 30,
2009 and 2008 and inception (August 12, 2000) to April 30, 2009 date amounted to
approximately $397,000, $204,200 and $2,354,000, respectively.
 
 Research
and development
 The
Company is currently a research and development (“R&D”) stage company
and therefore the Board of Directors has not set a budget for R&D. However,
all projects and purchases must be approved before being started or
purchased. As of April 30, 2009, there have been expenses put toward
research and development. For the nine months ending April 30, 2009, salaries
amounted to approximately $689,000 in R&D, parts and supplies was
approximately $30,000, shipping charges, battery management systems and other
R&D were approximately $7,000, $12,000 and $2,000,
respectively.
 
 Concentration
of risk
 The
Company maintains cash deposit accounts and certificates of deposits which at
times may exceed federally insured limits. These accounts have not experienced
any losses and the Company believes it is not exposed to any significant credit
risk related to cash.
 
 Income
taxes
 The
Company accounts for income taxes using an asset and liability approach under
which deferred income taxes are recognized by applying enacted tax rates
applicable to future years to the differences between the financial statement
carrying amounts and the tax bases of reported assets and
liabilities.
 
 The
principal item giving rise to deferred taxes is the net operating loss carry
forward.
 
 Effective
August 1, 2007, uncertain tax positions are accounted for in accordance with
FASB Interpretation No. 48 "Accounting for Uncertainty in Income
Taxes."
 
 Long-lived
assets
 The
Company accounts for long-lived assets in accordance with Statement of Financial
Accounting Standard No. 144 (SFAS 144) "Accounting for Long-Lived Assets". The
carrying value of long-lived assets is reviewed on a regular basis for the
existence of facts and circumstances that may suggest impairment. The Company
recognizes impairment when the sum of undiscounted future cash flows is less
than the carrying amount of the asset. The write down of the asset is charged to
the period in which the impairment occurs.
  11
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Foreign
currency translation
 The
functional currency for some foreign operations is the local currency. Assets
and liabilities of foreign operations are translated at balance sheet date rates
of exchange and income, expense and cash flow items are translated at the
average exchange rate for the period. Translation adjustments in future periods
will be recorded in Cumulative Other Comprehensive Income. The translation gains
or losses for the nine months ended April 30, 2009 and year ended July 31, 2008
were approximately $18,000 loss and $13,000 gain, respectively.
 
 Comprehensive
loss
 The
Company reports comprehensive loss in accordance with the requirements of SFAS
No. 130. For the nine months ended April 30, 2009 and 2008, the difference
between net loss and comprehensive loss is foreign currency
translation.
 
 Loss
per Share
 Basic
loss per common share is computed by dividing net loss by the weighted average
number of common shares outstanding during the specified
period.  Diluted loss per common share is computed by dividing net
loss by the weighted average number of common shares and potential common shares
during the specified period. All potentially dilutive securities, which include
options and warrants convertible into 1,028,000 and 1,206,000 common shares at
April 30, 2009 and 2008, respectively, have been excluded from the computations,
as their effect is anti-dilutive.
 
 Discontinued
Operations
 In April
2008, the Company completed the sale of SPI. The operations of SPI were
accounted for as discontinued operations in the consolidated financial
statements for the years presented herein.  The divestiture resulted
in a loss of $0 and $542,534, respectively, for the nine months ended April 30,
2009, and 2008, and $1,320,313 from inception (August 12, 2000) through April
30, 2009.
 
 Summarized
combined statement of loss for discontinued operations is as
follows:
 
 NINE MONTHS ENDEDApril 30,2009
                      
                      
                      2008Net
      sales
                      
                      $
                      -
                      
                      
                      $
                      600,303Loss
      before income tax
                      
                      
                      -
                      
                      
                      
                      (1,142,837
                      )Provision
      for income taxes
                      
                      
                      -
                      
                      
                      
                      -Loss
      from operations - net tax
                      
                      
                      -
                      
                      
                      
                      (542,534
                      )Gain
      on sale of discontinued operations
                      
                      
                      -
                      
                      
                      
                      -Provision
      for income taxes
                      
                      
                      -
                      
                      
                      
                      -Loss
      from discontinued operations - net of tax
                      
                      $
                      -
                      
                      
                      $
                      (542,534
                      )
 
 Reclassification
 Certain
reclassifications have been made to the prior year’s financial statements to
conform to the current year presentation. These reclassifications have had no
impact on the net. The reclassification consisted of other assets being
reclassified as marketable securities. The Company reclassified certain
continuing operations to discontinued operations for the nine months ended April
30, 2008 in the Company’s Consolidated Statements of
Operations.
  12
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Recently
issued accounting pronouncements
 In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling
Interests in Consolidated Financial Statements – an amendment of ARB No. 51”
(“SFAS No. 160”).  SFAS No. 160 amends Accounting Research Bulletin
(“ARB”) No. 51 to establish accounting and reporting standards for the
noncontrolling (minority) interest in a subsidiary and for the deconsolidation
of a subsidiary.  It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the Consolidated Financial Statements.  SFAS No.
160 also requires consolidated net income to be reported at amounts that include
the amounts attributable to both the parent and the noncontrolling interest on
the face of the consolidated statement of income.  Under SFAS No. 160,
the accounting for changes in a parent’s ownership interest in a subsidiary that
do not result in deconsolidation must be accounted for as equity transactions
for the difference between the parent’s carrying value and the cash exchanged in
the transaction.  In addition, SFAS No. 160 also requires that a
parent recognize a gain or loss in net income when a subsidiary is
deconsolidated (except in the case of a spin-off), and requires expanded
disclosure in the Consolidated Financial Statements that clearly identify and
distinguish between the interests of the parent’s ownership interest and the
interests of the noncontrolling owners of a subsidiary.  This
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008.  The Company will
adopt SFAS No. 160 on August 1, 2009, as required, and does not believe they
will have a significant impact on its financial statements.
 
 In
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application
of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS
157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive
accounting pronouncements that address leasing transactions from the
requirements of SFAS No. 157, with the exception of fair value measurements of
assets and liabilities recorded as a result of a lease transaction but measured
pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS
157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). FSP
SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of
SFAS No. 157 on January 1, 2008. The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities. The Company will adopt SFAS No. 157 on
August 1, 2009, as required, and does not believe the adoption will have a
material impact on its financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
161”).  The new standard is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity’s financial position, financial performance and cash flows.  It
is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008.  The Company does not
believe that SFAS No. 161 will have a material impact on its financial
statements.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States.  The Company will adapt SFAS
No. 162 on August 1, 2009 and does not believe the adoption will have a material
impact on its financial statements.
  13
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Note
2. Property and equipment
 
 Property
and equipment consist of:
 
 April 30,
                      
                      
                      July 31,2009
                      
                      
                      2008Building
      and improvements
                      
                      $
                      1,272,352
                      
                      
                      $
                      1,272,352Furniture
      and fixtures
                      
                      
                      26,192
                      
                      
                      
                      19,548Office
      equipment
                      
                      
                      140,539
                      
                      
                      
                      137,030Machinery
      and equipment
                      
                      
                      113,771
                      
                      
                      
                      19,026Vehicles
                      
                      
                      60,979
                      
                      
                      
                      60,979Software
      costs
                      
                      
                      27,038
                      
                      
                      
                      11,874Land
                      
                      
                      700,000
                      
                      
                      
                      700,0002,340,871
                      
                      
                      
                      2,220,809Less
      accumulated depreciation
                      
                      
                      (275,555
                      )
                      
                      
                      (206,229
                      )$
                      2,065,316
                      
                      
                      $
                      2,014,580
 
 Depreciation
expense for the nine months ended April 30, 2009 and 2008 was $69,534 and
$90,674, respectively.
 
 Note
3. Inventories
 
 Inventories
consist of the following:
 
 April
      30,
                    
                    
                    July
      31,2009
                    
                    
                    2008Raw
      materials
                    
                    $
                    17,288
                    
                    
                    $
                    134,456Work
      in progress
                    
                    
                    214,218
                    
                    
                    
                    117,124Finished
      goods
                    
                    
                    67,907
                    
                    
                    
                    35,730$
                    299,413
                    
                    
                    $
                    287,310
 
 Raw
materials, work in progress and finished goods as of April 30, 2009, and July
31, 2008, is related to the Company’s planned sales of electric powered
vehicles.
 
 Note
4. Other Assets
 
 On June
28, 2006, the Company executed two $50,000 notes, one bearing interest at 6% and
the other non-interest bearing note, to a contractor, as compensation for monies
paid by the Company to the contractor for the contractor to file for a patent,
and $50,000 for inventory that was either missing or damaged. The patent that
the contractor received with the money of EVI was assigned to EVI as collateral
until both notes and interest were paid in full. On August 19, 2008, the
non-interest bearing note in the amount of $50,000 was repaid. On February 19,
2009, the interest bearing note in the amount of $50,000, plus interest of
$8,319, was repaid and the patent that was being held as collateral was
returned. The interest bearing note is included in other current assets on the
Company's balance sheet at April 30, 2009 and July 31, 2008.
  14
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Note
5. Advances from related parties and related party transactions
 
 During
the nine months ended April 30, 2009 and 2008, the Company received and repaid
additional advances from Del Mar Ventures Corp, a company owned by Aarif Jamani
(a Company stockholder) of $0 in 2009, and $9,940 and $10,000, respectively as
of July 31, 2008. As of April 30, 2009 and July 31, 2008, the balance was
$0.
 
 The
Company received and repaid additional advances from SSRI (owned by a Company
stockholder) for the nine months ended April 30, 2009 and year ended July 31,
2008 in amounts of $1,722,304 and $1,600,234, respectively for 2009 and
$3,732,000 and $3,592,000, respectively for 2008. As of April 30, 2009 and July
31, 2008, the amount due to SSRI was $109,070 and $38,000,
respectively.
 
 The
Company received and repaid additional advances from A & S Holding (owned by
a previous Company president) for the nine months ended April 30, 2009 and year
end July 31, 2008 in amount of $0 for 2009 and $11,000 and $0, respectively for
2008.  As of April 30, 2009 and July 31, 2008, the amount due to the
Company was $0.
 
 The
Company received and repaid additional advances from Greg Navone (Director of
the Company) for the nine months ended April 30, 2009 and year ended July 31,
2008 in amount of $51,000 and $0, respectively for 2009 and $150,000 and $0,
respectively for 2008. As of April 30, 2009 and July 31, 2008, the amount due to
the Company was $51,000 and $0, respectively.
 
 Due from
related parties and advances from related parties are reported as current assets
or liabilities. These advances are not subject to written agreements and have no
specific repayment terms but are deemed due on demand and are not interest
bearing notes except for the Greg Navone note.
 
 Note
6. Long-term debt
 
 Long-term
debt consists of:
  15
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 April 30,
                          
                          
                          July 31,2009
                          
                          
                          200810.875%
      note payable to Bayview Loan Servicing, LLC, payable in monthly
      installments of approximately $11,388 including interest, collateralized
      by real property due in full on or before December 2022
(1)
                          
                          
                          962,410
                          
                          
                          
                          984,20410%
      note payable to Wyndom Capital Investments, Inc., payable in October 2010
      collateralized by 10,000,000 shares of the Company's common stock
      (2)
                          
                          
                          4,000,000
                          
                          
                          
                          3,971,15010%
      note payable to Crystal Capital Ventures, payable in May 2011
      collateralized by 7,500,000 shares of the Company's common stock
      (3)
                          
                          
                          2,331,420
                          
                          
                          
                          1,211,00015.8%
      note payable to Allegiance Direct Bank, payable in monthly installments of
      approximately $525, due in full on October 2008 (4)
                          
                          
                          -
                          
                          
                          
                          1,4767,293,830
                          
                          
                          
                          6,167,830Less
      current portion
                          
                          
                          (32,538
                          )
                          
                          
                          (32,422
                          )$
                          7,261,292
                          
                          
                          $
                          6,135,408
 
 Principal
maturities on continuing operations are as follows for the years ended July
31:
 
 2009
                    
                    $
                    7,7792010
                    
                    
                    4,033,8222011
                    
                    
                    2,370,2272012
                    
                    
                    43,2452013
                    
                    
                    48,189Thereafter
                    
                    
                    790,568$
                    7,293,830
 
 (1) In
November 2007, the Company refinanced a loan on a building. The Company paid the
remainder of the loan to Richard Howard, with $50,000 in cash and $1,000,000
from the new loan proceeds. The new loan with Bayview Loan Servicing, LLC is
$1,000,000. The loan has an initial interest rate at 10.875% per annum with a
monthly payment of $11,388, including interest. The loan is due on December 1,
2022. After the first 24 months, the interest rate adjusts to Prime plus 4.875%.
Interest rate changes are limited to 2% increase or decrease in any annual
adjustments. Interest expense for the nine months ended April 30, 2009 and 2008
for Bayview Loan Servicing, LLC is approximately $80,700 and $46,900,
respectively, and $144,600 from inception (August 12, 2000) through April 30,
2009.
  16
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 (2) In
October 2007, the Company entered into a loan agreement with Wyndom Capital
Investments, Inc. (“Wyndom”). The Company issued 10,000,000 pre-reverse stock
split shares (computes to 1,428,573 post-reverse stock split shares) of
outstanding stock as collateral for the above note and 8,571,427 post reverse
stock split shares of outstanding stock as collateral to total 10,000,000 post
reverse stock split shares. The agreement provides loans of up to $4,000,000
with interest payable monthly at a rate of 10% per annum and due in full in
October of 2010. Loans under the agreement are secured by the Company’s shares
of common stock at a rate of two and one half shares to each dollar of
principal. As of April 30, 2009, the Company has borrowed $4,000,000 under the
loan agreement. Interest expense for the nine months ended April 30, 2009 and
2008 for Wyndom is approximately $386,000 and $95,000, and $570,000 from
inception (August 12, 2000) through April 30, 2009. If Wyndom were to declare
default and take possession of the collateral, the number of shares is
sufficient to make Wyndom the controlling shareholder.
 
 (3) On
May 5, 2008, the Company entered into a loan agreement with Crystal Capital
Ventures Inc. (“Crystal Capital”). The loan agreement provides for loans to the
Company of up to $3,000,000, with a minimum initial loan of $500,000 taking
place on May 19, 2008. The notes bear interest payable monthly in arrears at the
rate of 10% per annum; and mature and are due and payable May 4, 2011. The loans
under the loan agreement are secured by shares of the Company’s common stock
held by Crystal Capital. The Company is required to issue shares as collateral
at the rate of two and one half shares of the Company’s common stock for each
dollar principal amount of the loan advanced to the
Company.  Following disbursement of the first $1,000,000 of funds
pursuant to the loan agreement, on May 27, 2008, the Company issued 7,500,000
shares of common stock as collateral to Crystal Capital.
 
 As of
April 30, 2009, the Company has borrowed $2,331,420 under the loan agreement.
Interest expense for the nine months ended April 30, 2009 and 2008 for Crystal
Capital is approximately $139,000 and $0, respectively, and $150,000 from
inception (August 12, 2000) through April 30, 2009.
 
 (4) On
January 31, 2009 the Company financed a workman’s compensation policy with
Allegiance Direct Bank for the period January 31, 2009 to January 31, 2010 for
$6,396.  The Company was required to make a down payment of
approximately $1,966 in January 2009 and monthly payments including interest of
15.8%. Interest expense for the nine months ended April 30, 2009 and 2008
Allegiance Direct Bank is approximately $0 and $0 from inception (August 12,
2000) through April 30, 2009.
 
 Note
7. Stockholders’ equity
 
 In
January 2008, the Company’s shareholders approved a 1:7 reverse stock
split.  Except for the presentation of common shares authorized and
issued on the consolidated balance sheet and shares presented in the
consolidated statement of stockholders’ equity (deficit), all shares and par
share information has been revised to give retroactive effect to the reverse
stock split.  Authorized shares were 50,000,000 and were increased to
250,000,000 on December 24, 2007. Wyndom Capital Investments, Inc. hold
10,000,000 post-reverse stock split shares as collateral for a loan of up to
$4,000,000 and Crystal Capital Ventures Inc. holds 7,500,000 post reverse stock
split shares as collateral for a loan up to $3,000,000 as discussed in Note
5.
  17
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 On
January 15, 2009, the Company’s shareholders approved a 1:3 reverse stock split
for the outstanding shares but it did not take effect until February 19, 2009.
Common stock, authorized shares was 35,714,285 and was increased to 50,000,000
on February 19, 2009. On February 20, 2009, the Company issued Wyndom Capital
Investments, Inc. an additional 6,666,665 shares so they again hold 10,000,000
post reverse stock split shares as collateral for a loan of up to $4,000,000 as
discussed in Note 6. Crystal Capital Ventures Inc. was issued 4,999,999 shares
so they again hold 7,500,000 post reverse stock split shares as of February 20,
2009, as collateral for a loan of up to $3,000,000 as discussed in Note
6.
 
 February
24, 2009, under the 2006 stock option plan the remainder of the shares were
granted and exercised, this closed that plan. The Company has registered the
2009 stock option plan with the SEC for 3,000,000 shares, and of those 2,042,857
shares have been granted at par value $0.001 per share and a purchase share
price of $0.90 per share.
 
 Note
8. Segment information
 
 FASB
Statement No. 131,Disclosures about Segments of an Enterprise and Related Information,
establishes standards for reporting information about operating segments.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by
management. The Company is organized by line of business and geographical area.
The Company has two businesses, telecommunication services and the development
and sale of electric powered vehicles.
 
 The
following is financial information relating to the Company’s business
segments:
 
 NINE MONTHS ENDEDApril 30,2009
                    
                    
                    2008Revenues
      from external customers:United
      States
                    
                    $
                    243,141
                    
                    
                    $
                    208,703Hong
      Kong
                    
                    
                    -
                    
                    
                    
                    -India
                    
                    
                    -
                    
                    
                    
                    -Total
      revenues from continuing operations
                    
                    $
                    243,141
                    
                    
                    $
                    208,703Loss
      from continuing operations:United
      States
                    
                    
                    (4,636,954
                    )
                    
                    
                    (4,129,673
                    )Hong
      Kong
                    
                    
                    (1
                    )
                    
                    
                    (250
                    )India
                    
                    
                    (60,689
                    )
                    
                    
                    -Total
      loss from continuing operations
                    
                    $
                    (4,697,644
                    )
                    
                    $
                    (4,129,923
                    )
 
 Note
9. Going concern
 
 The
Company's financial statements are prepared based on the going concern
principle. That principle anticipates the realization of assets and payments of
liabilities through the ordinary course of business.  No adjustments
have been made to reduce the value of any assets or record additional
liabilities, if any, if the Company were to cease to exist. The Company has
incurred significant operating losses since inception. These operating losses
have been funded by the issuance of capital, loans and advances. There are no
guarantees that the Company will continue to be able to raise the funds
necessary. Additionally, the lack of capital may limit the Company's ability to
establish a viable business.
  18
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 
 Note
10. Commitments and contingencies
 
 Surety
bond
 EVI
applied to NC DMV for a manufacturing license. This application required a
surety bond of $50,000 for three years which the Company acquired from Kaercher
Campbell & Associates. EVI was licensed as a motor vehicle dealer to engage
in the business of selling motor vehicles on March 9, 2009, until March 31,
2010, by the State of North Carolina DMV.
 
 Note
11. Share based compensation
 
 The
Company records compensation expense in its consolidated statement of operations
related to employee stock-based options and awards in accordance with SFAS No.
123(R) “Share-Based Payment.”
 
 The
Company recognizes the cost of all employee stock options on a straight-line
attribution basis over their respective contractual terms, net of estimated
forfeitures. The Company has selected the modified prospective method of
transition.
 
 The
Company also issues shares of common stock to non-employees as stock-based
compensation. The company accounts for the services using the fair market value
of the services rendered. For the nine months ended April 30, 2009 and 2008, the
Company issued 2,042,857 and 200,000 shares, respectively, and recorded
compensation expense of $1,746,900 and $804,652, respectively, in conjunction
with the issuance of these shares.
 
 Stock
Option Plan
 
 As of
April 30, 2009, 957,143 shares of common stock remain available for issuance
under the stock option plan.
 
 A summary
of the option activity under the Company’s stock option plan as of July 31, 2008
and changes during the nine months ended April 30, 2009, is presented
below.
 
 Options
                        
                        Shares
                        
                        
                        Weighted
                          Average
                          Exercise Share
                          Price
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                        
                        Aggregate
                          Intrinsic
                          ValueOutstanding
      at August 1, 2008
                        
                        
                        114,833
                        
                        
                        $
                        2.00Options
      granted
                        
                        
                        2,042,857
                        
                        
                        $
                        0.90Options
      exercised
                        
                        
                        (1,014,833
                        )
                        
                        $
                        0.90Options
      cancelled/expired
                        
                        
                        -Outstanding
      at April 30, 2009
                        
                        
                        1,142,857
                        
                        
                        $
                        0.90
                        
                        4.89
      years
                        
                        $
                        1
      ,222,857Exercisable
      at April 30, 2009
                        
                        
                        1,142,857
                        
                        
                        $
                        0.90
  19
  EV
INNOVATIONS, INC.
 A
Development Stage Company
 
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 Stock
compensation expense applicable to stock options for the nine months ended April
30, 2009 was approximately $1.7 million. The aggregate intrinsic value of
options outstanding as of April 30, 2009 was $1,222,857.
 
 1,142,857
of the Company’s outstanding options were exercisable as of April 30,
2009.




20





Item
      2.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.





FORWARD
LOOKING STATEMENTS





This
quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this section.





RESULTS
OF OPERATION





During
the period since inception on April 12, 2000 to April 30, 2009, we have incurred
net losses aggregating $56,645,095. At April 30, 2009, we had liabilities of
$8,636,821 and a working capital deficiency of $1,010,094. As of
April 30, 2009, we had $6,196 cash on hand.





NINE
MONTHS ENDED APRIL, 2009 and 2008





We had
sales of $243,141 and incurred a net loss of $4,697,644 for the nine months
ended April 30, 2009, which included general and administrative costs of
$3,140,944 and research and development expense of $820,667.





Our net
loss for the nine-month period ended April 30, 2009 increased slightly as
compared with that in the comparative period in fiscal 2008 (a net loss or
$4,649,887 in 2008 compared to $4,697,644 in 2009). This was primarily due to an
increase in general and administrative expense from $3,016,426 in the nine-month
period ended April 30, 2008, to $3,140,944 for the comparable period in 2009, a
decrease in research and development expense from $1,058,180 in 2008 to $820,667
in 2009; and an increase in sales from $208,703 in the nine-month period ended
April 30, 2008, to $243,141 in 2009. In 2009, we also incurred interest expense
of $634,717 related to loans payable, as compared with $142,349 for the
comparable period in 2008, and received interest income of $2,293.





In the
nine months ended April 30, 2009, we had other income of $60,166, representing
accrued bookkeeping and rental income from Superlattice Power, Inc. (formerly
our Zingo, Inc. subsidiary) , as
compared with other income of $413 in 2008. In 2008, we had a gain from the sale
of our Zingo, Inc. subsidiary of $162,129; we had no comparable gain in
2009.





THREE
MONTHS ENDED APRIL 30, 2009 and 2008





We had
sales of $22,085 and incurred a net loss of $3,757,728 for the three months
ended April 30, 2009, which included general and administrative costs of
$2,835,849 and research and development expense of $657,712.





Our net
loss for the three-month period ended April 30, 2009 increased from the
comparative period in fiscal 2008 (from $2,277,673 in 2008 to $3,757,728 in
2009). This was primarily due to an increase in general and administrative
expense from $1,730,006 in the three-month period ended April 30, 2008, to
$2,835,849 for the comparable period in 2009, a comparable research and
development expense of $657,350 in 2008 compared to $657,712 in 2009; and an
increase in sales from $-0- in the three-month period ended April 30, 2008, to
$22,085 in 2009. In 2009, we also incurred interest expense of $213,649 related
to loans payable, as compared with $97,264 for the comparable period in
2008.


21





In 2008,
we had a gain from the sale of our Zingo, Inc. subsidiary of $162,129; we had no
comparable gain in 2009.




The
principal components of general and administrative costs in the nine month
period ended April 30, 2009 were advertising and promotion for media marketing
of approximately $321,000, legal and accounting fees of approximately $181,000,
advertising expense for trade shows of approximately $46,000, and depreciation
expense of approximately $69,000. General and administrative costs also included
salaries and employee expenses of approximately $257,000, finders and consulting
fees of approximately $279,000, automobile expense of approximately $112,000 and
rent and office expenses of approximately $210,000. We incurred $820,667 in
research and development costs in the nine months ended April 30, 2009, as
compared with $1,058,180 in the prior period, due to our vehicle technology
being in a more developed phase. The principal components of research and
development costs in the nine month period ended April 30, 2009 were salaries
and wages and including payroll taxes and expenses, of approximately $716,000,
and approximately $93,000 of costs related to project development and parts and
supplies.





Electric
Vehicle Operations





We
convert and manufacture vehicles
in our developmental facility in Mooresville, North Carolina. Our team of highly
qualified engineers oversee groups of electrical and mechanical staff. This
40,000 square foot facility has room for conversions and
manufacturing, as
well as storage
with the potential for future growth, enabling us to work on many projects and
vehicles concurrently.





With the
license of our lithium battery technology described below, we are concentrating
on sales of our vehicles. We have initiated several nationwide newspaper
advertising campaigns which have generated orders for our vehicles, and we are
also seeing as a result a significant increase in inquiries about our electric
vehicle products.





Effective
April 15, 2008, we entered into a License Agreement (the “License Agreement”)
with Superlattice Power, Inc. (formerly our subsidiary, Zingo, Inc., “SPI”)
providing for our license to SPI of our patent applications and technologies for
rechargeable lithium ion batteries for hybrid vehicles and other applications
(“Licensed Products”). Under the License Agreement, we have the right to
purchase our requirements of lithium ion batteries from SPI, and our
requirements of lithium ion batteries shall be supplied by SPI in preference to,
and on a priority basis as compared with, supply and delivery arrangements in
effect for other customers of SPI. Our cost for lithium ion batteries purchased
from SPI shall be SPI’s actual manufacturing costs for such batteries for the
fiscal quarter of SPI in which our purchase takes place.





SPI has
agreed to invest a minimum of $1,500,000 in each of the next two years in
development of the technology for the Licensed Products.




Effective
April 16, 2008, SPI agreed to lease approximately 5,000 square feet of space
(“Leased Space”) in our North Carolina facility, such Leased Space to be
suitable for, and utilized by SPI for, SPI’s developmental and manufacturing
operations for Licensed Products pursuant to the License Agreement. The Leased
Space is leased on a month-to-month basis at a monthly rental of $2,500, the
monthly rental to be escalated five (5%) percent annually. Effective April 16,
2008, we also sold to SPI for the purchase price of $29,005, specified equipment
and supplies related to the Licensed Field.





On March
9, 2009 the State of North Carolina issued a manufacturing license to the
Company, and we now are manufacturing our own original design vehicles with
VIN’s, while we continue to convert other vehicles.





22




Commercial
Initiatives





Since
February 2004, EV Innovation introduced LiVTM series
electric vehicles to the government agencies. The testing of the LiVTM series
vehicles by NASA, Arcadis, a contractor to the U.S. Environmental Protection
Administration, NYC Taxi Commission, US Paratransit is completed. LiVTM WISE is
listed in the catalogue of Unites States General Services Administration and are
available for purchase to the government agencies. The target market for
LiVTM WISE is
federal government offices, utility companies, defense organizations and fleet
operators. EV Innovations is working with Zero Truck- USA for commercialization
of lithium ion powered heavy duty truck. EV Innovations now offers its
own, the “WAVE” three and four wheel electric vehicles and the “INIZIO” super
cars to the US market. The WAVE electric vehicle is aimed at the commuter
environment. The “INIZIO” super sport car serves the high speed car market.
INIZIO is also featured in the marked through the Sam’s Club “Once in a life
time” offer. The most advanced lithium ion battery powered INIZIO got an
outstanding response from the Sam’s club members. The INIZION and WAVE will be
the front line vehicles for us. A manufacturing and assembly plant
ha s been proposed
to the DOE under the Advanced Technology Vehicle Manufacturing loan program in
order to achieve scaled up
production. This
 particular plant
design is
estimated to produce around 100,000 cars in the first few years, once it is
operational.


5.2
Liquidity and Capital Resources





Since our
incorporation, we have financed our operations almost exclusively through
the sale of our common shares to investors and borrowings. We expect to finance
operations through the sale of equity in the foreseeable future as we receive
minimal revenue from our current business operations. There is no guarantee that
we will be successful in arranging financing on acceptable terms.





At April
30, 2009, we had liabilities of $8,636,821, as compared with $6,685,173 at July
31, 2008; and a working capital deficiency of $1,010,094 and a stockholders
deficiency of $6,183,528. As of April 30, 2009, we had $6,196 cash on
hand.





Our
property, plant and equipment increased to $2,065,316 at April 30, 2009, as
compared with $2,014,580 at July 31, 2008.





We used
net cash in operating activities of $1,582,300 in the nine months ended April
30, 2009, as compared with $3,809,189 in the comparable period in 2008, due to a
lesser amount of cash provided by financing activities, and cash flows provided
by investing activities were $121,409 in 2009, as compared with ($189,902) in
2008.





During
the nine months ended April 30, 2009, we received net proceeds of $587,681 from
the issuance of promissory notes for debt, and net proceeds of advances from
related parties of $1,039,298. Total cash provided by financing activities in
the nine months ended April 30, 2009 was $1,626,979, as compared with $3,623,894
in 2008.





23




Wyndom
Capital Loan Agreement


On
October 29, 2007, we entered into a Loan Agreement with Wyndom Capital
Investments, Inc. (referred to in this paragraph as the “Lender”). The Loan
Agreement provides for loans to the Company of up to $4,000,000, with a minimum
initial loan of $500,000 the disbursement of which to us took place in late
October, 2007. The notes evidencing the installments of the loans bear interest
payable monthly in arrears at the rate of 10% per annum, and mature and are due
and payable three years from the date of issuance. The loans under the Loan
Agreement are secured by shares of our common stock held by the Lender. We are
required to issue shares as collateral at the rate of two and one half shares of
our common stock for each dollar principal amount of the loan advanced to us. If
there is a trading halt in our common stock or we file for bankruptcy or
reorganization, the Lender has full recourse against the Company to collect the
unpaid amounts owing under the Loan Agreement and notes issued pursuant thereto,
including a first priority lien on all of our assets. In the event of the
occurrence of another type of default, which we do not cure in a timely fashion,
the Lender, as its sole recourse, is entitled to take possession for its sole
benefit of the shares of common stock designated as collateral for the principal
amount of the Loan that is in default. After the Lender has disbursed the first
$1,000,000 principal amount of the Loan to us, the Lender is entitled to receive
a certificate for the balance of the 7,500,000 shares of common stock
representing the collateral for the $3,000,000 balance of the funds that may be
disbursed under the Loan Agreement. To the extent the $3,000,000 balance of
funds are not delivered, we are entitled to cancel such certificate, with the
Lender retaining the appropriate number of shares as collateral for advances in
excess of $1,000,000. Following disbursement of the first $1,000,000 of funds
pursuant to the Loan Agreement, on November 19, 2007, we issued 10,000,000
shares of common stock as collateral to the Lender. Following the one-for-seven
reverse split effective in January 2008, we issued 8,571,427 shares of common
stock to Wyndom to bring the number of their collateral shares back up to
10,000,000, as required by the Wyndom Loan Agreement. Following the
0ne-for-three stock split effective February 19, 2009, 6,666,665 shares of
common stock were issued to Wyndom to bring their collateral shares back up to
10,000,000 as required by the Wyndom Loan Agreement.





As of
April 30, 2009, the Company had borrowed approximately $4,000,000 under the
Wyndom Capital Loan Agreement.





Crystal
Capital Ventures Loan Agreement





On May 5,
2008, we entered into a Loan Agreement with Crystal Capital Ventures Inc.
(referred to in this paragraph as the “Lender”). The Loan Agreement provides for
loans to the Company of up to $3,000,000, with a minimum initial loan of
$500,000 the disbursement of which to us took place on May 19, 2008. The notes
evidencing the installments of the loans bear interest payable monthly in
arrears at the rate of 10% per annum, and mature and are due and payable three
years from the date of issuance. The loans under the Loan Agreement are secured
by shares of our common stock held by the Lender. We are required to issue
shares as collateral at the rate of two and one half shares of our common stock
for each dollar principal amount of the loan advanced to us. If there is a
trading halt in our common stock or we file for bankruptcy or reorganization,
the Lender has full recourse against the Company to collect the unpaid amounts
owing under the Loan Agreement and notes issued pursuant thereto, including a
priority lien on all of our assets. In the event of the occurrence of another
type of default, which we do not cure in a timely fashion, the Lender, as its
sole recourse, is entitled to take possession for its sole benefit of the shares
of common stock designated as collateral for the principal amount of the Loan
that is in default. After the Lender has disbursed the first $1,000,000
principal amount of the Loan to us, the Lender is entitled to receive a
certificate for the balance of the 5,000,000 shares of common stock representing
the collateral for the $2,000,000 balance of the funds that may be disbursed
under the Loan Agreement. To the extent the $2,000,000 balance of funds are not
delivered, we are entitled to cancel such certificate, with the Lender retaining
the appropriate number of shares as collateral for advances in excess of
$1,000,000. Following disbursement of the first $1,000,000 of funds pursuant to
the Loan Agreement, on May 27, 2008, we issued 7,500,000 shares of common stock
as collateral to the Lender. Following the one-for-three reverse stock split
effective February 19, 2009, 4,999,999 shares of common stock were issued to
Crystal to bring their collateral shares back up to 7,500,000 as required by the
Crystal Capital Loan Agreement.





As of
April 30, 2009, the Company had borrowed $2,331,420 under the Crystal Capital
Loan Agreement.


24


Our
current operating funds are less than necessary for commercialization of our
planned products, and therefore we will need to obtain additional financing in
order to complete our business plan. We anticipate that up to $5,000,000 of
additional working capital will be required over the next 12 months for market
introduction of these products through joint venture partners or otherwise. We
do not have sufficient cash on hand to meet these anticipated
obligations.





Apart
from the Wyndom Capital and Crystal Capital Loan Agreements, which may not
furnish us with all of the capital that we will require, we do not currently
have any other arrangements for financing, and we may not be able to find such
financing if required. Obtaining additional financing would be subject to a
number of factors, including investor sentiment. Market factors may make the
timing, amount, terms or conditions of additional financing unavailable to
us.





Our
auditors are of the opinion that our continuation as a going concern
is in doubt. Our continuation as a going concern is dependent upon continued
financial support from our shareholders and other related parties.





CRITICAL
ACCOUNTING ISSUES





The
Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of the financial statements requires
the Company to make estimates and judgments that affect the reported amount of
assets, liabilities, and expenses, and related disclosures of contingent assets
and liabilities. On an on-going basis, the Company evaluates its estimates,
including those related to intangible assets, income taxes and contingencies and
litigation. The Company bases its estimates on historical experience and on
various assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.





Other
Matters





New
Financial Accounting Standards





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling
Interests in Consolidated Financial Statements – an amendment of ARB No. 51”
(“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No.
51 to establish accounting and reporting standards for the noncontrolling
(minority) interest in a subsidiary and for the deconsolidation of a subsidiary.
It clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the
Consolidated Financial Statements. SFAS No. 160 also requires consolidated net
income to be reported at amounts that include the amounts attributable to both
the parent and the noncontrolling interest on the face of the consolidated
statement of income. Under SFAS No. 160, the accounting for changes in a
parent’s ownership interest in a subsidiary that do not result in
deconsolidation must be accounted for as equity transactions for the difference
between the parent’s carrying value and the cash exchanged in the transaction.
In addition, SFAS No. 160 also requires that a parent recognize a gain or loss
in net income when a subsidiary is deconsolidated (except in the case of a
spin-off), and requires expanded disclosure in the Consolidated Financial
Statements that clearly identify and distinguish between the interests of the
parent’s ownership interest and the interests of the noncontrolling owners of a
subsidiary. This Statement is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. The Company
will adopt SFAS No. 160 on August 1, 2009, as required, and is currently
evaluating the impact of such adoption on its financial
statements.


25





In
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application of
SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS 157-2”).
FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive accounting
pronouncements that address leasing transactions from the requirements of SFAS
No. 157, with the exception of fair value measurements of assets and liabilities
recorded as a result of a lease transaction but measured pursuant to other
pronouncements within the scope of SFAS No. 157. FSP SFAS 157-2 delays the
effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually). FSP SFAS 157-1
and FSP SFAS 157-2 became effective for the Company upon adoption of SFAS No.
157 on January 1, 2008. The Company will provide the additional disclosures
required relating to the fair value measurement of nonfinancial assets and
nonfinancial liabilities when it fully implements SFAS No. 157 on August 1,
2009, as required, and does not believe they will have a significant impact on
its financial statements.





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
161”). The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity’s financial
position, financial performance and cash flows. It is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The Company does not believe that SFAS No. 161 will have a material
impact on its financial statements.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States. This Statement is effective sixty days following the SEC’s
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles.” The Company will adopt SFAS No. 16i2 on August
1, 2009, and does not believe the adoption will have a material impact on its
financial statements.





Item 3.
Quantitative and Qualitative Disclosures About Market Risk





Interest
Rate Risk - Interest rate risk refers to fluctuations in the value of a security
resulting from changes in the general level of interest rates. Investments that
are classified as cash and cash equivalents have original maturities of three
months or less. Our interest income is sensitive to changes in the general level
of U.S. interest rates. We do not have significant short-term investments, and
due to the short-term nature of our investments, we believe that there is not a
material risk exposure. Our debt is at fixed interest rates.





Credit Risk - Our accounts receivables are subject, in the normal
course of business, to collection risks. We regularly assess these risks and
have established policies and business practices to protect against the adverse
effects of collection risks. As a result we do not anticipate any material
losses in this area.





26




Item
4(T). Controls and Procedures.


As of the
end of the fiscal quarter covered by this Form 10-Q, the Company carried out an
evaluation, under the supervision and with the participation of the Company’s
management, including the Company’s Chief Executive Officer and Principal
Financial and Accounting Officer, of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures as defined in Rule
13a-14 of the Securities Exchange Act of 1934. Based upon that evaluation, the
Chief Executive Officer and Principal Financial and Accounting Officer concluded
that the Company’s disclosure controls and procedures are effective in timely
alerting her to material information relating to the Company (including its
consolidated subsidiaries) required to be included in this Quarterly Report on
Form 10-Q. There have been no changes in the Company’s internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.





PART II-
OTHER INFORMATION





Item 6.
Exhibits





Ex
      31
            Certification
      of Chief Executive Officer and Principal Financial Officer Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002, filed
    herewith.





Ex
      32
            Certification
      of Chief Executive Officer and Principal Financial Officer Pursuant to 18
      U.S.C. Section 1350, as
       Adopted   Pursuant   to  Section   906  of
      the Sarbanes-Oxley Act of 2002,filed
herewith.





SIGNATURES





In
accordance with the  requirements of the Exchange Act, the
registrant  caused this  report to be  signed on
its  behalf  by
the  undersigned,  thereunto duly authorized.





EV
      Innovations, Inc./s/Stacey FlingStacey
      FlingChief
      Executive Officer and Director(Chief
      Executive Officer andPrincipal
      Financial Officer)Dated:
      June 18, 2009


27