##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K/A
  (Amendment 1)
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2008Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    no. 1-33001
  ENOVA SYSTEMS, INC.
 (Exact name of registrant as
    specified in its charter)
  California

95-3056150(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)   1560 West 190th Street, Torrance, California 90501
 (Address of principal executive
    offices, including zip code)
  Registrants telephone number, including area code:
 (310) 527-2800
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

The NYSE Amex   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  None.




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Explanatory
    Note




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##### 





ENOVA
    SYSTEMS, INC.
  2008
    FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
   
 PART IItem 1.


BUSINESS


3Item 1A.


RISK FACTORS


15Item 1B.


UNRESOLVED STAFF COMMENTS


18Item 2.


PROPERTIES


18Item 3.


LEGAL PROCEEDINGS


18Item 4.


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


19PART IIItem 5.


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


19Item 6.


SELECTED FINANCIAL DATA


20Item 7.


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


21Item 7A.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


29Item 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


30Item 9


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


54Item 9A.


CONTROLS AND PROCEDURES


55Item 9B.


OTHER INFORMATION


56PART IIIItem 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


56Item 11.


EXECUTIVE COMPENSATION


60Item 12.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


63Item 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


64Item 14.


PRINCIPAL ACCOUNTING FEES AND SERVICES


65PART IVItem 15.


EXHIBITS, FINANCIAL STATEMENT SCHEDULES


66EX-23.1EX-31.1EX-31.2EX-32   2




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PART I  ITEM 1.
    BUSINESS  General
              www.enovasystems.com
   3




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
    The Company received its certification for ISO 9001:2000 for
    Quality and ISO 14001 for Environmental Management over our
    operational and manufacturing processes in the first quarter of
    2009. In order to receive ISO certifications for quality and
    environmental management systems, an organization must
    demonstrate operating systems and procedures for managing the
    its processes to consistently turn out products and
    services that meet customer and regulatory requirements, as well
    as identify and control the environmental impact of its
    activities, products or services.
    In September 2008, the material weakness in our inventory
    process was remediated and management asserted that internal
    controls over financial reporting were operating effectively as
    of September 30, 2008. Management asserts that our internal
    controls over financial reporting were also operating
    effectively as of December 31, 2008 as referenced in
    Item 9A of Part II herein.
    In January 2009, Enova completed a series of reorganization
    efforts aimed at adapting the Company to revised demand
    forecasts from major customers Tanfield and Think, re-alignment
    of our engineering and program management functions and
    concentration of R&D resources in support of our marketing
    strategy. This included streamlining our management structure,
    and implementing a 48% reduction of our workforce company wide
    when comparing December 31, 2007 employee headcount figures
    to February 28, 2009.    Customer

PercentTanfield Engineering Systems Limited


28
%Hawaii Center for Advanced Transportation Technologies


22
%International Truck and Engine Corporation


13
%Think Technology


10
%   HybridPowertmElectric and Hybrid-Electric Drive Systems
  Environmental
    Initiatives and Legislation
   4




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Strategic
    Alliances, Partnering and Technology Developments
        
    Enova management visited First Auto Works of Chinas
    (FAW) research and development center and FAWs
    affiliate electronics manufacturer in China, to further develop
    the basis for a continued cooperation on hybrid transit buses,
    and potentially on other FAW vehicles. Enova has developed a
    customized, pre-transmission solution for FAW. This system has
    been designed in parallel with FAWs development of a new
    transmission package, which they hope to aggressively market
    across Asia and possibly export abroad. The designed
    in feature of our pre-transmission hybrid system indicates
    that Enova will continue to be heavily engaged with FAW in their
    efforts to market their hybrid solutions. Building on our prior
    success with FAW, 5




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the Company received a second order of 20 systems in December
    2008 for delivery in the first quarter of 2009.  
    Optare Plc (Optare) engaged Enova to develop two
    different prototype transit buses for a new UK bus manufacturer.
    These vehicles were delivered in the third quarter of 2008. The
    plug-in hybrid diesel-electric and full-electric vehicles use
    the latest lithium ion battery technology to provide maximum
    vehicle range and fuel efficiency. Enovas electric and
    hybrid drive system solutions include fully integrated on-board
    or stationary battery charging systems. The Enova drive systems
    and chargers were featured in Optares Solo full-electric
    and Rapta double-deck transit buses in the fourth quarter of
    2008 at the Euro Bus Expo in Birmingham, UK.        Products
   6




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
    30kW and 90kW all-electric drives
    80/25kW hybrid drive
    80/40kW hybrid drive
    90kW hybrid drive
    combinations of these systems based on customer requirements.    
    120kW all-electric drive
    120/60kW hybrid drive
    240/120kW hybrid drive          Hybrid
    and Electric Drive Configurations
   7




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Series Hybrid
    with Diesel Generator
  
  and/or
  Post
    Transmission Parallel Hybrid
  
    Pre
    Transmission Parallel Hybrid
  
   8




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All
    Electric Vehicle Drive System
  
    Definitions:
          Electric
    Drive Motors
      Motor
    Controllers
     9




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Drive
    Systems
    120 60
  120/60kW
  Drive
    System Accessories
      Battery
    Care Unit
  kilowatt-hours.
      kilowatt-hours
 10




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Control
    Unit
    Safety
    Disconnect Unit
    High
    Voltage Disconnect Unit
    Wiring
    Harness Connector Kits
    Distributed
    Power Generation for Industrial/Commercial/Residential
    Applications
    20kW
    bi-directional Fuel Cell Power Conditioning System
      Fuel
    Cell Management Unit
   11




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Manufacturing
    Strategy
               12




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Competitive
    Conditions
                
    Providing a full product line of power management, power
    conversion, and system integration
    Providing products that allow the hardware to be software
    programmable and configurable
    Offering a product line designed for the most advanced new fuel
    systems: electric, hybrid, fuel cell, microturbine powered
    vehicles, and battery, fuel cell, microturbine stationary power
    applications
    Providing fully integrated, drop-in energy
    management and conversion system in one box
    Providing scaleable modules
    Offering systems with reduced footprint and weight, high
    functionality and low cost  characteristics essential
    for all market applications  due to our aerospace
    engineering experience 13




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
    Meeting changing and sophisticated requirements of emerging
    alternative power markets and applications
    Positioning ourselves as a strategic ally with our global
    customer base, manufacturers and our R&D partners. By
    building a business based on long-standing relationships with
    satisfied clients such as International Truck and Engine, First
    Auto Works, Wright Group, Tanfield, and Hyundai, we
    simultaneously build defenses against competition. Teaming with
    recognized global manufacturers allows Enova to avoid utilizing
    resources for manufacturing infrastructure as well as exploit
    Hyundais years of engineering expertise at relatively low
    costs.  Research
    and Development
      
    Power Control and Drive Systems and related technologies for
    vehicle applications
    Heavy Duty Drive System development for Buses; Trucks,
    Industrial, Military and Marine applications
    Technical and product development under DOE/DOT/DOD contracts
    Customized application of 12kW and 18kW Chargers
    Fuel Cell Generation system power management and process control
    Stationary Power Management and Conversion and related
    technologies
    Systems Integration of these technologies , and
    OEM Technical and Product development    Intellectual
    Property
     14




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Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330.
  ITEM 1A.
    RISK
    FACTORS    This annual report on
    Form 10-K,
    including the documents that we incorporate by reference,
    contains statements indicating expectations about future
    performance and other forward-looking statements that involve
    risks and uncertainties. We usually use words such as
    may, will, should,
    expect, plan, anticipate,
    believe, estimate, predict,
    future, intend, potential,
    or continue or the negative of these terms or
    similar expressions to identify forward-looking statements.
    These statements appear throughout the
    Form 10-K
    and are statements regarding our current intent, belief, or
    expectation, primarily with respect to our operations and
    related industry developments. Examples of these statements
    include, but are not limited to, statements regarding the
    following: our expansion plans, our future operating expenses,
    our future losses, our future expenditures for
 15




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research and development and the sufficiency of our cash
    resources. You should not place undue reliance on these
    forward-looking statements, which apply only as of the date of
    this annual report. Our actual results could differ materially
    from those anticipated in these forward-looking statements for
    many reasons, including the risks faced by us and described in
    this Risk Factors section and elsewhere in this
    annual report.
  We cannot guarantee that any forward-looking statement will
    be realized, although we believe we have been prudent in our
    plans and assumptions. Achievement of future results is subject
    to risks, uncertainties and potentially inaccurate assumptions.
    Should known or unknown risks or uncertainties materialize, or
    should underlying assumptions prove inaccurate, actual results
    could differ materially from past results and those anticipated,
    estimated or projected. You should bear this in mind as you
    consider forward-looking statements.
  We undertake no obligation to publicly update forward-looking
    statements, whether as a result of new information, future
    events or otherwise. You are advised, however, to consult any
    further disclosures we make on related subjects in our
    10-Q and
    8-K reports
    to the SEC. Also note that we provide the following cautionary
    discussion of risks, uncertainties and possibly inaccurate
    assumptions relevant to our businesses. These are factors that,
    individually or in the aggregate, we think could cause our
    actual results to differ materially from expected and historical
    results. We note these factors for investors as permitted by the
    Private Securities Litigation Reform Act of 1995. You should
    understand that it is not possible to predict or identify all
    such factors. Consequently, you should not consider the
    following to be a complete discussion of all potential risks or
    uncertainties.
  Our
    history of operating losses and our expectation of continuing
    losses may hurt our ability to reach profitability or continue
    operations.
    Because
    we depend upon sales to a limited number of customers, our
    revenues will be reduced if we lose a major
    customer
    We
    extend credit to our customers, which exposes us to credit
    risk
    Our
    business is affected by current economic and financial market
    conditions in the markets we serve
   16




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The
    nature of our industry is dependent on technological advancement
    and is highly competitive
  and/or
    Our
    industry is affected by political and legislative
    changes
    We are
    subject to increasing emission regulations in a changing
    legislative climate
    We may
    be unable to effectively compete with other companies who have
    significantly greater resources than we have
   17




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We may
    be exposed to product liability or tort claims if our products
    fail, which could adversely impact our results of
    operations
    We are
    highly dependent on a few key personnel and will need to retain
    and attract such personnel in a labor competitive
    market
    There
    are minimal barriers to entry in our market
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS     18




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  NYSE
    Euronext Acquisition of the American Stock Exchange
      Common StockHigh Price


Low PriceCalendar 2008Fourth Quarter

$
2.20


$
0.35Third Quarter

$
3.87


$
1.85Second Quarter

$
5.58


$
3.80First Quarter

$
4.86


$
3.51Calendar 2007Fourth Quarter

$
4.95


$
3.20Third Quarter

$
7.12


$
3.20Second Quarter

$
8.07


$
4.58First Quarter

$
4.83


$
3.08    19




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Dividend
    Policy
    ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  For and as of the Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share data)Statement of Operations DataNet revenues

$
6,443


$
9,175


$
1,666


$
6,084


$
2,554Cost of revenues


8,224



10,313



2,900



6,001



2,239Gross profit (loss)


(1,781
)


(1,138
)


(1,234
)


83



315Operating expensesResearch and development


2,505



1,947



1,363



804



925Selling, general and administrative


8,692



6,428



4,178



2,870



2,325Total operating expense


11,197



8,375



5,541



3,674



3,250Other income and expenseInterest and financing fees, net


202



343



550



13



(255
)Equity in losses of non-consolidated joint venture


(118
)


(177
)


(3
)


(118
)


(192
)Gain on debt restructuring










1,392



1,569



Total other income, net


84



166



1,939



1,464



(447
)Net loss

$
(12,894
)

$
(9,347
)

$
(4,836
)

$
(2,127
)

$
(3,382
)Per common share:Basic and diluted loss per share

$
(0.66
)

$
(0.59
)

$
(0.33
)

$
(0.18
)

$
(0.38
)Weighted average number of common shares outstanding


19,660



15,796



14,802



11,644



8,832Balance Sheet DataTotal assets

$
19,242


$
21,173


$
15,730


$
21,973


$
5,888Long-term debt

$
1,263


$
1,306


$
1,295


$
2,321


$
3,341Shareholders equity

$
14,143


$
14,177


$
11,964


$
16,604


$
103  20




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
        
    In cooperation with International Truck and Engine (IC
    Corp), we delivered a plug-in hybrid bus to Denali
    National Park for use in transporting visitors. The IC Corp bus
    included our unique post-transmission parallel hybrid drive
    technology. We believe the utilization of our products in
    environments such as National Parks further demonstrates the
    diverse opportunities for our drive system. The delivery of this
    plug-in hybrid bus is part of the continued worldwide sales
    growth of our drive system technology for commercial and transit
    buses. According to results from recent independent third-party
    dynamometer testing, our IC Corporation plug-in hybrid bus is
    cleaner than standard diesel buses as they reduce carbon dioxide
    emissions by as much as 40 percent, nitrogen oxide by up to
    20 percent and particulate matter by as much as
    30 percent.
    The Internal Revenue Service (IRS) granted several
    IC Corp school and commercial buses equipped with Enovas
    Charge Depleting Hybrid Drive System for the Qualified Heavy
    Hybrid Vehicles tax credit. Qualifying Heavy Hybrid vehicles are
    new vehicles with a gross vehicle weight in excess of 8,500
    pounds that meet the definition of a qualifying hybrid vehicle.
    A qualifying hybrid vehicle means a motor vehicle which draws
    propulsion energy from onboard sources of stored energy which
    are both an internal combustion or heat engine using consumable
    fuel, and a rechargeable energy storage system. The 2008 and
    2009 Navistar IC Bus Model PB10500 CE Series Hybrid School
    Buses as well as the 2008 and 2009 Navistar IC Bus Model PB10500
    CE Commercial Buses, both equipped with Enovas Charge
    Depleting Hybrid Drive Systems with gross vehicle weights ranges
    from 14,001  26,000 lbs. and 26,001 
    33,000 lbs. are eligible for $6,000 and $12,000 tax credits,
    respectively.
    Enova management visited First Auto Works of Chinas
    (FAW) research and development center and FAWs
    affiliate electronics manufacturer in China, to further develop
    the basis for a continued cooperation on hybrid transit buses,
    and potentially on other FAW vehicles. In addition, Enova
    completed twenty (20) successful trials of our
    pre-transmission hybrid drive systems. These trials were
    completed on passenger routes within the Olympic sector during
    the Beijing Olympics. As a result of these trials, additional
    orders have been placed for our pre-transmission hybrid-electric
    drive from FAW. The FAW hybrid-electric City 21




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Bus is a vehicle that is built by the Wuxi division of FAW
    Bus & Coach. The factory is now set to begin mass
    production of the new hybrid municipal transit bus which is
    designed for Chinas increasingly popular Bus Rapid Transit
    (BRT) systems and traditional inner city mass transit routes.
    This new model, for which FAW has 10 proprietary patents,
    delivers a fuel economy increase of 38% and an emissions
    reduction of 30%, compared to traditional diesel buses.  
    Optare Plc (Optare) engaged Enova to develop two
    different prototype transit buses for a new UK bus manufacturer.
    These vehicles were delivered in the third quarter of 2008. The
    plug-in hybrid diesel-electric and full-electric vehicles will
    use the latest lithium ion battery technology to provide maximum
    vehicle range and fuel efficiency. Enovas electric and
    hybrid drive system solutions include fully integrated on-board
    or stationary battery charging systems. The Enova drive systems
    and chargers will were featured in two, new Optare transit buses
    which debuted in the fourth quarter of 2008 at the Euro Bus Expo
    in Birmingham, UK.
    In September 2008, the material weakness in our inventory
    process was remediated and management asserted that internal
    controls over financial reporting were operating effectively as
    of September 30, 2008. Management asserts that our internal
    controls over financial reporting were also operating
    effectively as of December 31, 2008 or the date of this
    Form 10-K
    annual report as referenced in Item 9A of Part II
    herein.    on-site on-site back-up
      Critical
    Accounting Policies
   22




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Cash and cash equivalents
  Allowance for doubtful accounts
  Inventory first-in,
  Inventory reserve
  Property and Equipment
    Impairment of Long-Lived Assets
  Equity Method Investment
  Stock-Based Compensation
 23




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Accounting for Stock Issued to Employees
  Revenue recognition
  
    Persuasive evidence of an arrangement exists;
    Delivery has occurred or services have been rendered;
    The fee for the arrangement is fixed or determinable; and
    Collectibility is reasonably assured.  Persuasive Evidence of an Arrangement
  Delivery Has Occurred or Services Have Been
    Rendered
  The Fee for the Arrangement is Fixed or
    Determinable
  Collectibility is Reasonably Assured customer-by-customer
  00-21. 00-21 and/or 00-21 00-21
   24




---



##### Table of Contents



work-in-progress.
        Research and Development
  Recent
    Accounting Pronouncements
      No. 140-3, No. 140-3). No. 140-3
 25




---



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No. 140-3 No. 140-3
    instrument-by-instrument
    No. 07-3, (EITF 07-3) EITF 07-3 EITF 07-3. EITF 07-3
  No. FAS 142-3, (FSP 142-3). No. 142-3 No. 142-3 FSP 142-3 FSP 142-3
 26




---



##### Table of Contents



No. 06-11 No. 06-11), 06-11 No. 06-11
  Results
    of Operations
  Years
    Ended December 31, 2008 and 2007
  Net Revenues.
  Cost of Revenues.
  Gross Margin.
  Research and Development Expenses.
 27




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Selling, General and Administrative
    Expenses.
  Interest and Financing Fees, Net.
  Equity in losses of non-consolidated joint
    venture.
  Liquidity
    and Capital Resources
  and/or
       28




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ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   29




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  ENOVA
    SYSTEMS, INC.
  CONTENTS
 December 31,
    2008 and 2007
   
 PageREPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM


31FINANCIAL STATEMENTSBalance Sheets


32Statements of Operations


33Statements of Stockholders Equity


34Statements of Cash Flows


35Notes to Financial Statements


36   30




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    31




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  BALANCE SHEETS
  December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
5,324,000


$
10,485,000Short term investments


2,000,000



Accounts receivable, net


808,000



4,256,000Inventories and supplies, net


7,649,000



3,565,000Prepaid expenses and other current assets


215,000



457,000Total current assets


15,996,000



18,763,000Property and equipment, net


1,829,000



870,000Investment in non-consolidated joint venture


1,352,000



1,470,000Intangible assets, net


65,000



70,000Total assets

$
19,242,000


$
21,173,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
592,000


$
1,877,000Deferred revenues






101,000Accrued payroll and related expenses


295,000



680,000Other accrued expenses


1,859,000



2,063,000Current portion of notes payable


98,000



95,000Total current liabilities


2,844,000



4,816,000Accrued interest payable


992,000



874,000Notes payable, net of current portion


1,263,000



1,306,000Total liabilities


5,099,000



6,996,000Commitments and contingencies (Note 10)Stockholders equity:Series A convertible preferred stock  no par
    value, 30,000,000 shares authorized; 2,652,000 shares
    issued and outstanding; liquidating preference at $0.60 per
    share as of December 31, 2008 and 2007


530,000



530,000Series B convertible preferred stock  no par
    value, 5,000,000 shares authorized; 546,000 shares
    issued and outstanding; liquidating preference at $2 per share
    as of December 31, 2008 and 2007


1,094,000



1,094,000Common stock  no par value, 750,000,000 shares
    authorized; 20,817,000 and 17,182,000 shares issued and
    outstanding as of December 31, 2008 and 2007, respectively


134,233,000



122,000,000Stock notes receivable for the sale of preferred stock






Additional paid-in capital


7,949,000



7,322,000Accumulated deficit


(129,663,000
)


(116,769,000
)Total stockholders equity


14,143,000



14,177,000Total liabilities and stockholders equity

$
19,242,000


$
21,173,000    32




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  STATEMENTS OF OPERATIONS
  For the Years EndedDecember 31,2008


2007Revenues

$
6,443,000


$
9,175,000Cost of revenues


8,224,000



10,313,000Gross loss


(1,781,000
)


(1,138,000
)Operating expensesResearch and development


2,505,000



1,947,000Selling, general & administrative


8,692,000



6,428,000Total operating expenses


11,197,000



8,375,000Operating loss


(12,978,000
)


(9,513,000
)Other income and (expense)Interest and financing fees, net


202,000



343,000Equity in losses of non-consolidated joint venture


(118,000
)


(177,000
)Total other income, net


84,000



166,000Net loss

$
(12,894,000
)

$
(9,347,000
)Basic and diluted loss per share

$
(0.66
)

$
(0.59
)Weighted average number of common shares outstanding


19,660,000



15,796,000    33




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  STATEMENTS OF STOCKHOLDERS
    EQUITY
  NotesReceivablefor theConvertible Preferred Stock








Sale of


AdditionalSeries A


Series B


Common Stock


Preferred


Paid-in


AccumulatedShares


Amount


Shares


Amount


Shares


Amount


Stock


Capital


Deficit


TotalBalance, December 31, 2006


2,652,000


$
530,000



1,185,000


$
2,432,000



14,848,000


$
109,496,000


$
(27,000
)

$
6,955,000


$
(107,422,000
)

$
11,964,000Conversion of series B preferred stock










(639,000
)


(1,338,000
)


28,000



1,338,000















Exercise of stock options


















44,000



193,000















193,000Issuance of common stock for cash


















2,218,000



10,767,000















10,767,000Issuance of common stock for director services


















28,000



138,000















138,000Issuance of common stock for employee services


















16,000



68,000















68,000Stock option expense






























367,000







367,000Cash received for stock note receivable


























27,000











27,000Net loss


































(9,347,000
)


(9,347,000
)Balance, December 31, 2007


2,652,000


$
530,000



546,000


$
1,094,000



17,182,000


$
122,000,000


$



$
7,322,000


$
(116,769,000
)

$
14,177,000Issuance of common stock for cash


















3,430,000



12,008,000















12,008,000Issuance of common stock for director services


















153,000



174,000















174,000Issuance of common stock for employee services


















52,000



51,000















51,000Stock option expense






























627,000







627,000Net loss


































(12,894,000
)


(12,894,000
)Balance, December 31, 2008


2,652,000


$
530,000



546,000


$
1,094,000



20,817,000


$
134,233,000


$



$
7,949,000


$
(129,663,000
)

$
14,143,000    34




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  STATEMENTS OF CASH FLOWS
  For the Years EndedDecember 31,2008


2007Cash flows from operating activitiesNet loss

$
(12,894,000
)

$
(9,347,000
)Adjustments to reconcile net loss to net cash used in operating
    activitiesDepreciation and amortization


593,000



300,000Loss on asset disposal






52,000Inventory reserve


803,000



100,000Reserve for doubtful accounts


575,000



Equity in losses of non-consolidated joint venture


118,000



177,000Issuance of common stock for director services


174,000



138,000Issuance of common stock for employee services


51,000



68,000Stock option expense


627,000



367,000(Increase) decrease in:Accounts receivable


2,873,000



(3,898,000
)Inventories and supplies


(4,887,000
)


(1,961,000
)Prepaid expenses and other current assets


242,000



251,000Increase (decrease) in:Accounts payable


(1,285,000
)


1,495,000Accrued payroll and related expenses


(385,000
)


460,000Accrued expenses


(204,000
)


1,396,000Deferred revenues


(101,000
)


(298,000
)Accrued interest payable


118,000



139,000Net cash used in operating activities


(13,582,000
)


(10,561,000
)Cash flows from investing activitiesPurchases of short-term investments


(2,000,000
)


Maturities of short-term investments






5,000,000Purchases of property and equipment


(1,524,000
)


(515,000
)Net cash provided by (used in) investing activities


(3,524,000
)


4,485,000Cash flows from financing activitiesPayments on notes payable


(63,000
)


(38,000
)Net proceeds from sales of common stock


12,008,000



10,767,000Proceeds from the execution of stock options






193,000Proceeds from repayment of stock note receivable






27,000Net cash provided by financing activities


11,945,000



10,949,000Net increase (decrease) in cash and cash equivalents


(5,161,000
)


4,873,000Cash and cash equivalents, beginning of period


10,485,000



5,612,000Cash and cash equivalents, end of period

$
5,324,000


$
10,485,000Supplemental disclosure of cash flow informationInterest paid

$
9,000


$
7,000Assets acquired through financing arrangements

$
23,000


$
74,000    35




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS
  1.
    Description
    of Business  General
    Liquidity
    Hyundai-Enova
    Innovative Technology Center
          2.
    Summary
    of Significant Accounting Policies  Revenue
    Recognition
   36




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    
    Persuasive evidence of an arrangement exists;
    Delivery has occurred or services have been rendered;
    The fee for the arrangement is fixed or determinable; and
    Collectibility is reasonably assured.  Persuasive Evidence of an Arrangement
  Delivery Has Occurred or Services Have Been
    Rendered
  The Fee for the Arrangement is Fixed or
    Determinable
  Collectibility is Reasonably Assured customer-by-customer
  00-21. and/or 00-21 00-21
  work-in-progress.
 37




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Deferred
    Revenue
    Comprehensive
    Income
    Cash
    and Cash Equivalents
    Short-Term
    Investments
    Accounts
    Receivable and Allowance for Doubtful Accounts
    Inventory
  work-in-progress, first-in,
 38




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Inventory
    reserve
    Property
    and Equipment
      Impairment
    of Long-Lived Assets
      Equity
    Method Investment
    Patents
    Impairment
    of Intangible Assets
   39




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
  instrument-by-instrument
    Stock-Based
    Compensation
      Advertising
    Expense
   40




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Research
    and Development
    Income
    Taxes
      Loss
    Per Share
      Fiscal Years EndedDecember 31,2008


2007Options to purchase common stock


623,000



329,000Series A and B preferred shares conversion


84,000



84,000Potential equivalent shares excluded


707,000



413,000   Commitments
    and Contingencies
   41




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Estimates
    Concentration
    of Credit Risk
    Major
    Customers
    Recent
    Accounting Pronouncements
     42




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    No. 140-3, No. 140-3). No. 140-3 No. 140-3 No. 140-3
    instrument-by-instrument
    No. 07-3, (EITF 07-3) EITF 07-3 EITF 07-3. EITF 07-3
 43




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  No. FAS 142-3, (FSP 142-3). No. 142-3 No. 142-3 FSP 142-3 FSP 142-3
    No. 06-11 No. 06-11), 06-11 No. 06-11
  3.
    Inventory  (first-in,
  2008


2007Raw materials

$
7,114,000


$
3,037,000Work-in-process


391,000



489,000Finished Goods


1,047,000



139,000Reserve for obsolescence


(903,000
)


(100,000
)$
7,649,000


$
3,565,000    44




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   4.
    Property
    and Equipment    2008


2007Computers and software

$
598,000


$
593,000Machinery and equipment


1,470,000



1,485,000Furniture and office equipment


107,000



269,000Demonstration vehicles and buses


346,000



397,000Leasehold improvements


1,348,000



70,000Construction in progress






60,0003,869,000



2,874,000Less accumulated depreciation and amortization


(2,040,000
)


(2,004,000
)Total

$
1,829,000


$
870,000     5.
    Investment
    in Non-Consolidated Joint Venture  ITC      December 31,


December 31,2008


2007Financial positionCurrent assets

$
3,344,000


$
3,635,000Property and equipment, net


35,000



42,000Liabilities






(2,000
)Equity

$
3,379,000


$
3,675,000OperationsNet revenue

$
150,000


$
202,000Expenses


(579,000
)


(872,000
)Interest income


133,000



233,000Net loss

$
(296,000
)

$
(437,000
)Companys proportionate share of net loss

$
(118,000
)

$
(177,000
)    45




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   6.
    Intangible
    Assets      2008


2007Patents

$
93,000


$
93,000Less accumulated amortization


(28,000
)


(23,000
)Total

$
65,000


$
70,000     7.
    Notes
    Payable    2008


2007Secured note payable to Credit Managers Association of
    California, bearing interest at prime plus 3% (8.25% as of
    December 31, 2008), and is adjusted annually in April
    through maturity. Principal and unpaid interest due in April
    2016. A sinking fund escrow may be funded with 10% of future
    equity financing, as defined in the Agreement

$
1,238,000


$
1,238,000Secured note payable to a financial institution in the original
    amount of $95,000, bearing interest at 6.21%, payable in 36
    equal monthly installments of principal and interest through
    October 1, 2009


27,000



59,000Secured note payable to a financial institution in the original
    amount of $35,000, bearing interest at 10.45%, payable in 30
    equal monthly installments of principal and interest through
    November 1, 2009


14,000



27,000Secured note payable to a financial institution in the original
    amount of $23,000, bearing interest at 11.70%, payable in 36
    equal monthly installments of principal and interest through
    October 1, 2010


15,000



Secured note payable to a Coca Cola Enterprises in the original
    amount of $40,000, bearing interest at 10% per annum. Principal
    and unpaid interest due on demand


40,000



40,000Secured note payable to a financial institution in the original
    amount of $39,000, bearing interest at 4.99% per annum, payable
    in 48 equal monthly installments of principal and interest
    through September 1, 2011


27,000



37,0001,361,000



1,401,000Less current portion


(98,000
)


(95,000
)Long-term portion

$
1,263,000


$
1,306,000    46




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    December 31,20082009

$
98,0002010


17,0002011


8,0002012


2013


Thereafter


1,238,000Total

$
1,361,000   8.
    Revolving
    Credit Agreement    9.
    Deferred
    Revenues  08-01
  10.
    Commitments
    and Contingencies  Leases
     47




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Year Ending

OperatingDecember 31

Leases2009

$
439,0002010


439,0002011


439,0002012


439,0002013 and thereafter


Total

$
1,756,000   11.
    Stockholders
    Equity  Common
    Stock
      Series A
    Preferred Stock
    Series B
    Preferred Stock
   48




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    12.
    Stock
    Options  Stock
    Option Program Description
             49




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    WeightedWeighted


AverageAverage


Remaining


AggregateNumber of Share


Exercise


Contractual


IntrinsicOptions


Price


Term


ValueOutstanding at December 31, 2006


162,000


$
4.43



7.96


$
Granted


215,000


$
4.10



5.00


$
Exercised


(44,000
)

$
4.36






$
Forfeited or Cancelled


(4,000
)

$
4.35






$
Outstanding at December 31, 2007


329,000


$
4.23



5.85


$
Granted


420,000


$
3.82



9.74


$
Exercised





$







$
Forfeited or Cancelled


(126,000
)

$
3.91






$
Outstanding at December 31, 2008


623,000


$
4.02



7.09


$
Exercisable at December 31, 2008


387,000


$
4.14



5.77


$
       Fiscal Year EndedDecember 31,2008


2007Total intrinsic value of stock options exercised

$



$
29,000Cash received from stock option exercises

$



$
193,000Gross income tax benefit from the exercise of stock options

$



$
  50




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Valuation
    and Expense Information under SFAS 123(R)
    Fiscal Year EndedDecember 31,2008

2007Expected life (in years)

4

3 - 5Average risk-free interest rate

3%

3 - 4%Expected volatility

111 - 113%

75 - 104%Expected dividend yield

0%

0%Forfeiture rate

3%

3%     13.
    Income
    Taxes      2008


2007Deferred tax assetsNet operating loss carry-forwards

$
34,163,000


$
37,725,000Stock based compensation


357,000



167,000Other, net


(6,000
)


(222,000
)34,514,000



37,670,000Less valuation allowance


(34,514,000
)


(37,670,000
)Net deferred tax assets

$



$
      51




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      December 31,


December 31,2008


2007Tax benefit computed at 34%

$
4,384,000


$
3,178,000Change in valuation allowance


3,156,000



24,000State tax (net of Federal benefit)


748,000



543,000Change in carryovers and tax attributes


(8,288,000
)


(3,745,000
)Net tax benefit

$



$
   14.
    Related
    Party Transactions      15.
    Employee
    Benefit Plan    16.
    Geographic
    Area Data    2008


2007United States

$
2,726,000


$
3,080,000Mexico






59,000Italy


274,000



Korea


256,000



359,000Japan


259,000



87,000China


249,000



United Kingdom


2,033,000



5,138,000Norway


646,000



452,000Total

$
6,443,000


$
9,175,000  52




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##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   17.
    Subsequent
    Events  Dissolution
    of Joint Venture  Hyundai-Enova Innovative Technology
    Center
     53




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##### Table of Contents



ITEM 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Form 10-Q Form 10-Q),
  Regulation S-K.
  Regulation S-K
  Form 8-K Form 10-Q Form 8-K Form 10-Q Form 10-Q/A).
  Form 10-Q/A.
  Form 10-Q/As
    Regulation S-K:
  Form 10-Q/A, Form 10-Q
  Form 10-Q/A,
 54




---



##### Table of Contents



ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(b) Rule 13a-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
        Changes
    in Internal Control over Financial Reporting
   55




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##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION  None
 PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Name

Age

PositionBjorn Ahlstrom(2)


75


DirectorDr. Malcolm Currie(3)


82


DirectorRichard Davies(4)(5)


40


DirectorJarett Fenton


32


Chief Financial OfficerJohn Micek(1)


56


DirectorEdwin O. Riddell(5)


67


DirectorRoy Roberts(2)(5)


70


DirectorMichael Staran


48


Chief Executive Officer and DirectorJohn Wallace(4)(5)


60


Director     (1)
    
    Audit Committee Chairman(2)
    
    Audit Committee Member(3)
    
    Compensation Committee Chairman(4)
    
    Compensation Committee Member(5)
    
    Nominating and Governance Committee  Bjorn Ahlstrom.
  Malcolm R. Currie, Ph.D.
 56




---



##### Table of Contents



Richard Davies.
  Jarett Fenton, Chief Financial Officer.
  John J. Micek.
  Edwin O. Riddell.
  Roy S. Roberts.
 57




---



##### Table of Contents



Michael Staran.
  John R. Wallace.
    Board of
    Directors and its Committees
      Audit Committee.
 58




---



##### Table of Contents



www.enovasystems.com
  Compensation Committee.
  (www.enovasystems.com).
  Nominating and Governance Committee. th www.enovasystems.com
  Code of
    Ethics
  www.enovasystems.com
  16(a)
    Beneficial Ownership Reporting Compliance
   59




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    Michael Staran.
  Jarett Fenton.
  William Frederiksen.
    Stock


Options


All otherFiscal


Salary


Bonus


Awards


Awards


CompensationName and Principal Position

Year


($)


($)


($)(B)


($)(C)


($)(D)


Total ($)Michael Staran


2008


$
249,653






$
107,000






$
51,911


$
408,564Chief Executive Officer


2007


$
206,916


$
83,000


$
81,780


$
12,495


$
63,351


$
447,542Edwin Riddell(A)


2008























former Chief Executive Officer


2007


$
245,286


$
83,000






$
41,166


$
119,805


$
489,257Jarett Fenton


2008


$
183,007














$
14,379


$
197,306Chief Financial Officer


2007


$
148,185


$
72,000


$
22,650






$
4,816


$
247,651William Frederiksen


2008


$
176,678






$
6,000






$
58,364


$
241,042former Chief Operating Officer


2007























     (A)
    
    Mr. Riddell retired as Chief Executive Officer effective
    August 28, 2007.(B)
    
    Stock awards issued to employees as compensastion for services
    are valued at issuance in accordance with FAS 123R.(C)
    
    Although no options were awarded in 2006 or 2007, the amounts
    shown are calculated in accordance with SEC rules to reflect
    previously issued options that vested in 2006 and 2007 as
    computed in accordance with FAS 123R consistent with the
    assumptions set forth in Note 12 to the financial
    statements in this Annual Report on
    Form 10-K.(D)
    
    For Mr. Staran, the amount shown attributable to 2008
    consists of (i) $35,475 for lease of apartment and related
    insurance; (ii) $1,490 for apartment utilities;
    (iii) $729 for auto insurance; (iv) $2,218 value of
    life insurance premiums paid; and (v) $11,998 in medical
    insurance premiums. For Mr. Riddell, the amount shown
    attributable to 2007 consists of (i) $33,885 for lease of
    apartment and related insurance; (ii) $4,000 for automobile
    allowance; (iii) $37,266 value of company automobile
    transferred upon retirement; (iv) $3,978 value of company
    computer transferred upon retirement; (v) $4,835 relocation
    expenses from California; (vi) $30,000 accrued vacation pay
    upon retirement; (vii) $2,217 value of life insurance
    premiums paid; and (viii) $3,624 in medical insurance
    premiums paid. For Mr. Fenton, the amount shown
    attributable to 2008 consists of (i) $2,218 value of life
    insurance premiums paid; (ii) $4,020 in medical insurance
    premiums paid; iii) $6,599 in car allowance and (iv) $1,543
    in phone charges. For Mr. Frederiksen, the amount
    attributable to 2008 consists of: (i) $24,000 for lease of
    apartment; (ii) $17,885 in medical insurance premiums;
    (iii) $15,833 in severance benefits and (iv) $646 in
    phone and utilities charges. 60




---



##### Table of Contents



Employment
    Agreement
  Michael
    Staran
        Outstanding
    Equity Awards at Fiscal Year-End
  Option Awards


Stock AwardsNumber of Securities


Number of Securities








Number of Shares or


Market Value ofUnderlying


Underlying








Units of Stock That


Shares or Units of StockUnexercised Options


Unexercised Options


Option


Option


Have Not Vested


That Have Not VestedName

(#) Exercisable


(#) Unexercisable


Exercise Price


Expiration Date


(#)


($)Michael Staran


23,000






$
4.35



9/21/2015



50,000


$
20,000.0033,333



66,667


$
3.81



3/23/2018Jarett Fenton


23,333



46,667


$
3.81



3/23/2018







   Current
    Equity Incentive Plans
    Change
    of Control and Retirement Arrangements
     61




---



##### Table of Contents



Director
    Compensation
    NonequityFees








Incentive


NonqualifiedEarned or


Stock





Plan


Deferred


All OtherNon-Executive

Paid in


Awards


Option


Compensation


Compensation


Compensation


TotalDirector Name

Cash ($)


($)(C)


Awards ($)


($)


Earnings ($)


($)


($)Bjorn Ahlstrom

$
23,000


$
27,000


















$
50,000Malcolm Currie

$
18,000


$
27,000


















$
45,000Donald Dreyer

$
4,000


$
6,000


















$
10,000Richard Davies(A)


























John Micek

$
18,000


$
27,000


















$
45,000Anthony Rawlinson(B)

$
4,000


$
6,000


















$
10,000Edwin Riddell

$
22,000


$
27,000


















$
45,000Roy Roberts

$
14,000


$
15,000


















$
29,000John Wallace

$
18,000


$
27,000


















$
45,000     (A)
    
    Mr. Davies elected not to receive compensation for his
    services in the year ended December 31, 2008.(B)
    
    Mr. Rawlison resigned his position as Chairman of the Board
    effective April 23, 2008.(C)
    
    Stock awards issued to directors as compensastion for services
    are valued at issuance in accordance with FAS 123R.   62




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##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Regulation 13D-G.
  Percent of Common Stock,Series A and Series B PreferredNumber of Shares of


Percent of


Stock, and Common StockOwner

Common Stock


Common Stock


Voting TogetherJagen, Pty., Ltd.(1)


3,222,222



15.6
%


15.5
%9 Oxford Street, South Ybarra 3141 Melbourne, Victoria AustraliaShell Asset Management BV(2)


2,152,728



10.4
%


10.4
%Sir Winston Churchillaan 366H,
    2285 SJ Rijswijk ZH, The NetherlandsJ O Hambro Capital Management Group Limited(3)


1,520,000



7.3
%


7.3
%Ground Floor, Ryder Court
    14 Ryder Street
    London, United Kingdom SW1Y 6QBGAM Holdings AG(4)


1,514,275



7.3
%


7.3
%Klaustrasse 10
    8008 Zurich, SwitzerlandJarett Fenton(6)


28,333



0.1
%


0.0
%Michael Staran(7)


101,833



0.5
%


0.2
%Bjorn Ahlstrom


43,675



0.2
%


0.2
%Malcolm R. Currie


56,343



0.3
%


0.3
%Richard Davies(1)(5)


3,222,222



15.6
%


0.0
%John J. Micek


34,237



0.2
%


0.2
%Roy S. Roberts


23,574



0.1
%


0.1
%John R. Wallace


44,267



0.2
%


0.2
%Edwin O. Riddell(8)


80,825



0.4
%


0.1
%All Officers and Directors as a group


3,635,309



17.4
%


1.4
%     (1)
    
    Jagen Pty. Ltd. (Jagen) shares beneficial ownership with
    Jagens controlling shareholder, the B. Liberman Family
    Trust and its trustee, Jagen Nominees, Pty. Ltd. Mr. Davies
    is Managing Director for Jagen. Boris and Helen Liberman possess
    ultimate voting and discretionary authority over the shares.(2)
    
    Based upon a Schedule 13G filed July 31, 2008, Shell
    Asset Management Company BV manages assets of The Shell Group
    and its subsidiaries and affiliates, including certain pension
    plans organized for the benefit of employees of The Shell Group.
    As such, The Shell Group and such subsidiaries and affiliates,
    including such pension plans, have the right to the receipt of
    dividends from, and the proceeds from the sale of, the shares of
    common stock. 63




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##### Table of Contents



(3)
    
    Based upon a Holding(s) in Company filed on August 19, 2008
    via the Regulatory News Service (RNS) on the London
    Stock Exchange.(4)
    
    Based upon a Schedule 13G/A filed February 11, 2009,
    GAM Holding AG holds shared voting and investment power with its
    wholly-owned subsidiaries, GAM International Management Limited
    (GIML) and GAM London Limited (GAM London) of which GIML is the
    investment adviser of GAM Global Diversified and GAM London is
    the investment adviser of SJP GAM Managed-Life, SJP GAM
    Managed  Pension, SJPI GAM Sterling Managed Fund and
    SJPI GAM US Dollar Managed Fund.(5)
    
    Mr. Davies has elected not to receive quarterly
    compensation for his services as director.(6)
    
    Includes 23,333 shares of common stock underlying stock options
    that are exercisable within 60 days.(7)
    
    Includes 53,333 shares of common stock underlying stock options
    that are exercisable within 60 days.(8)
    
    Includes 52,222 shares of common stock underlying stock options
    that are exercisable within 60 days.  Equity
    Compensation Plan Information
    Number of SecuritiesNumber of





Remaining Available forSecurities to be





Future Issuance UnderIssued upon


Weighted-Average


Equity CompensationExercise of


Exercise Price of


Plans (ExcludingOutstanding Options,


Outstanding Options,


Securities Reflected inWarrants and Rights


Warrants and Rights


Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders


623,000


$
4.02



2,491,000Equity compensation plans not approved by security holders










Total


623,000


$
4.02



2,491,000   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    daughter-in-law
   64




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##### Table of Contents



Independence
    of Board of Directors and its Committees
      Audit Committee.
  Compensation Committee.
  Nominating and Governance Committee.
  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Pre-Approval
    of Audit and Permissible Non-Audit Services
  case-by-case
  Audit
    Fees
    2008


2007Audit Fees

$
212,000


$
236,000Audit-Related Fees






Tax Fees

$
10,000


$
9,800All Other Fees






Total

$
232,000


$
250,000    65




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  (a)
    1.  Financial Statements    (a)
    2.  Financial Statement Schedule    (a)
    3.  Exhibits  Exhibit #

Description3
.1

Our Amended and Restated Articles of Incorporation (incorporated
    by reference to Exhibit 3.1 of our Annual Report on Form 10-K
    for the fiscal year ending December 31, 2006, as filed on April
    2, 2007)3
.2

Our Amended and Restated Bylaws (incorporated by reference to
    Exhibit 3.2 of our Quarterly Report on Form 10-Q for the three
    month period ending June 30, 2008, as filed on August 14, 2008)10
.1

Form of Indemnification Agreement (incorporated by reference to
    Exhibit 10.26 of our Quarterly Report on Form 10-Q for the
    period ended June 30, 2005, as filed on August 15, 2005)10
.2

Form of Security Agreement entered into May 31, 1995 between us
    and Credit Managers Association of California, Trustee
    (incorporated by reference to Exhibit 10.65 of our Quarterly
    Report on Form 10-Q for the period ended April 30, 1996, as
    filed on June 14, 1996)10
.3

Commercial Promissory Note dated October 10, 2007 between us and
    Union Bank of California (incorporated by reference to
    Exhibit 10.3 of our Annual Report Form 10-K for the
    period ended December 31 2007, as filed on March 26,
    2008)10
.4

Placing Agreement in connection with an application to join AIM
    dated July 19, 2005 between us and Investec Bank (UK) Limited
    (incorporated by reference to Exhibit 10.28 of our amended
    Quarterly Report on Form 10-Q for the period ended September 30,
    2005, as filed November 21, 2005)10
.5

Agreement relating to the appointment of a Nominated Adviser and
    Broker dated July 19, 2005 between us and Investec Bank (UK)
    Limited (incorporated by reference to Exhibit 10.29 of our
    amended Quarterly Report on Form 10-Q for the period ended
    September 30, 2005, as filed November 21, 2005)10
.6

Placing Agreement dated July 25, 2007 between us and Investec
    Bank (UK) Limited (incorporated by reference to Exhibit 10 of
    our Current Report on Form 8-K as amended filed August 7, 2007)10
.7

Facility Lease Agreement entered into October 17, 2007 between
    us and Sunshine Distribution L.P., (incorporated by reference to
    Exhibit 10.1 of our Current Report on Form 8-K filed October 23,
    2007)10
.8

Employment Contract entered into May 1, 2005 between us and
    Edwin Riddell, formerly our President and Chief Executive
    Officer (incorporated by reference to Exhibit 10.22 of our
    Quarterly Report on Form 10-Q for the period ended March 31,
    2005, as filed May 16, 2005)+10
.9

Retirement Agreement and Limited Release entered into July 12,
    2007 between us and Edwin Riddell, formerly our Chief Executive
    Officer and President (incorporated by reference to Exhibit 10
    of our Current Report on Form 8-K as amended filed July 16,
    2007)+10
.10

Letter Agreement entered into March 13, 2006 between us and
    Corinne Bertrand, formerly our Chief Financial Officer
    (incorporated by reference to Exhibit 10.1 of our Quarterly
    Report on Form 10-Q for the period ended June 30, 2006, as filed
    August 11, 2006)+10
.11

Employment Agreement entered into February 11, 2008 between us
    and Michael Staran, our President and Chief Executive Officer
    (incorporated by reference to Exhibit 10.1 of our Current Report
    on Form 8-K filed February 15, 2008)+10
.12

Letter Agreement entered into March 27, 2007 between us and
    Michael Staran, Executive Vice President and currently our
    President and Chief Executive Officer (incorporated by reference
    to Exhibit 10.1 of our Current Report on Form 8-K filed April 4,
    2007)+10
.13

Placing Agreement entered into March 26, 2008 (incorporated by
    reference to Exhibit 10 of our Current Report on Form 8-K/A
    filed April 4, 2008) 66




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##### Table of Contents



Exhibit #

Description10
.14

Securities Purchase Agreement entered into April 23, 2008
    (incorporated by reference to Exhibit 10.1 of our Current Report
    on Form 8-K filed April 24, 2008)10
.15

Registration Rights Agreement entered into April 23, 2008
    (incorporated by reference to Exhibit 10.2 of our Current Report
    on Form 8-K filed April 24, 2008)10
.16

Supply Agreement with Navistar , Inc. entered into May 16, 2008
    (incorporated by reference to Exhibit 10.4 of our Quarterly
    Report on Form 10-Q for the three month period ending July 30,
    2008, as filed on August 14, 2008) #23
.1

Consent of PMB Helin Donovan*31
.1

Certification of Chief Executive Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002*31
.2

Certification of Chief Financial Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002*32


Certification Pursuant to 18 U.S.C. Section 1350*     *
    
    Filed herewith.+
    
    Management contract or compensatory plan or arrangement.#
    
    Portions of the exhibit have been omitted pursuant to a request
    for confidential treatment submitted to the Securities and
    Exchange Commission.  SIGNATURES
    ENOVA SYSTEMS, INC.
  By:
    /s/  Michael
    Staran      67




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##### Table of Contents



POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Michael
    StaranMichael
    Staran

Chief Executive Officer, President, and Director (Principal
    Executive Officer)

March 31, 2009/s/  Jarett
    FentonJarett
    Fenton

Chief Financial Officer (Principal Financial Officer and
    Principal Accounting Officer)

March 31, 2009/s/  John
    R. WallaceJohn
    R. Wallace

Director, Chairman of the Board

March 31, 2009/s/  Bjorn
    AhlstromBjorn
    Ahlstrom

Director

March 31, 2009/s/  Malcolm
    CurrieMalcolm
    Currie

Director

March 31, 2009/s/  Richard
    DaviesRichard
    Davies

Director

March 31, 2009/s/  John
    MicekJohn
    Micek

Director

March 31, 2009/s/  Roy
    RobertsRoy
    Roberts

Director

March 31, 2009/s/  Edwin
    RiddellEdwin
    Riddell

Director

March 31, 2009  68