##### Table of Contents





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

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

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 American Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 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
  10-K




---



##### 





ENOVA
    SYSTEMS, INC.
  2007
    FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
  PART IItem 1.

BUSINESS


2Item 1A.

RISK FACTORS


14Item 1B.

UNRESOLVED STAFF COMMENTS


17Item 2.

PROPERTIES


17Item 3.

LEGAL PROCEEDINGS


17Item 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


17PART IIItem 5.

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


17Item 6.

SELECTED FINANCIAL DATA


19Item 7.

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


20Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


28Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


29Item 9.

CHANGES 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


56Item 12.

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


56Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


57Item 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


57PART IVItem 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES


57EXHIBIT 10.3EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32   1




---



##### Table of Contents



PART I  ITEM 1.
    BUSINESS  General
    back-up
           2




---



##### Table of Contents




    In January 2007, Corinne Bertrand resigned as Chief Financial
    Officer. In her place, Jarett Fenton was appointed as Chief
    Financial Officer.
    In February 2007, John Dexter retired from his position as
    Director of Operations. In his place, Bill Frederiksen was
    appointed as Executive Director of Operations.
    In June 2007, Edwin Riddell retired from his position as Chief
    Executive Officer. In his place, Mike Staran was appointed as
    Chief Executive Officer.        Customer

PercentTanfield Engineering Systems Limited


52
%International Truck and Engine Corporation


15
%   HybridPowertm Electric and Hybrid-Electric Drive Systems
  Environmental
    Initiatives and Legislation
   3




---



##### Table of Contents



Strategic
    Alliances, Partnering and Technology Developments
        
    Enova increased its personnel by nearly 50% during 2007. The
    increase was due to direct strengthening of Enovas Supply
    Chain Management, Quality, Software and Engineering Departments.
    International Truck and Engine (IC Corp), the nations
    largest School Bus manufacturer, has partnered with Enova to
    supply the nations 1st production Hybrid School
    Buses. IC Corp currently maintains 60% of the School Bus market.
    In addition to School Buses, IC Corp is teaming with Enova, as
    early adopters, to supply production hybrid buses to the
    Commercial Bus Market. Enova and IC recently broadened their
    penetration into Canada and Mexico. There are no assurances,
    however that any purchase orders will be realized.
    WrightBus, the largest low-floor and Double Deck bus
    manufacturer in the United Kingdom, has taken delivery of our
    series hybrid diesel genset and integrated them into its medium
    and large bus applications. Six of these systems are now running
    seven days a week 18 hours a day in London. We continue to
    work with WrightBus on projects related to Enovas hybrid
    drive systems. There are no assurances, however that any
    purchase orders will be realized.
    Tanfield, the Worlds largest electric vehicle
    manufacturer, has signed an arrangement with Enova where Enova
    will supply electric drive systems for Tanfields 3.5, 7.5
    and 12 ton vehicles. Enova expects to supply Tanfield units
    during 2008 and throughout 2009. There are no assurances,
    however that any purchase orders will be realized.
    First Auto Works, Chinas largest vehicle manufacturer has
    partnered with Enova whereas Enova will supply its pre
    transmission hybrid system for bus applications. Enova has
    recently been awarded an order for 20 systems. There are no
    assurances, however that any future purchase orders will be
    realized.
    Th!nk and Electric Vehicles OEMs have both utilized Enova as a
    supplier of primary components/systems for their vehicles.
    Verizon has recently taken, in total, receipt of fifteen
    (15) service vans incorporating Enovas technology.
    Verizon is the nations second largest fleet operator with
    58,000 vehicles. In addition to Verizon, Enova has begun
    development work with other large fleet operators in both the
    service van and pick up and delivery sectors. There are no
    assurances, however that any purchase orders will be realized. 4




---



##### Table of Contents




    The Company integrated and delivered two (2) service
    vehicles with Enovas unique Post-Transmission Parallel
    Hybrid Drive System to Cox Communications. The hybrid vehicles
    are a GM 1500 Silverado Pickup and a Ford E250 Cargo Van. This
    development illustrates Enovas strategic focus to further
    penetrate the fleet market.
    In 2008, the Company was chosen to power four (4) Optare
    Solo Buses, integrated by UK-based Traction Technology Plc. The
    Buses will incorporate Enovas 120kW Series Hybrid
    drive system. There are no assurances, however that any future
    purchase orders will be realized.      Products
      
    30kW, 60kW, 90kW all-electric drives
    15/60kW hybrid drive
    25/80kW hybrid drive
    40/80kW hybrid drive
    90kW hybrid drive
    combinations of these systems based on customer requirements. 5




---



##### Table of Contents




    120kW all-electric drive
    120/60kW hybrid drive
    240/60kW hybrid drive
    90kW hybrid drive
    100kW hybrid drive
    100kW hybrid drive          Hybrid
    Drive Configurations
    Series Hybrid
    with Diesel Generator
  
 6




---



##### Table of Contents



and/or
  Post
    Transmission Parallel Hybrid
  
    Pre
    Transmission Parallel Hybrid
  
    Definitions:
         7




---



##### Table of Contents



Hybrid
    Drive Motors
      Hybrid
    Motor Controllers
      Hybrid
    Drive Systems
    120 60
    Drive
    System Accessories
   8




---



##### Table of Contents



Battery
    Care Unit
  kilowatt-hours.
      kilowatt-hours
  Hybrid
    Control Unit
    Safety
    Disconnect Unit
    High
    Voltage Disconnect Unit
    Wiring
    Harness Connector Kits
   9




---



##### Table of Contents



Distributed
    Power Generation for Industrial/Commercial/Residential
    Applications
    20kW
    bi-directional Fuel Cell Power Conditioning System
        Fuel
    Cell Management Unit
    Research
    and Development Strategy
    Manufacturing
    Strategy
     10




---



##### Table of Contents



Competitive
    Conditions
         11




---



##### Table of Contents




    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
    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;
    Stationary Power Management and Conversion and related
    technologies;
    Heavy Duty Drive System development for Buses; Trucks,
    Industrial, Military and Marine applications;
    Fuel Cell Generation system power management and process control;
    Systems Integration of these technologies;
    Technical and product development under DOE/DOT/DOD and Hyundai
    Group Contracts; and 12




---



##### Table of Contents




    OEM Technical and Product development.    Intellectual
    Property
          Employees
   13




---



##### Table of Contents



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 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.
   14




---



##### Table of Contents



The
    nature of our industry is dependent on technological advancement
    and highly competitive
  and/or 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
   15




---



##### Table of Contents



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
    We
    extend credit to our customers, which exposes us to credit
    risk
    We are
    exposed to risks relating to evaluations of our internal
    controls
     16




---



##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES      ITEM 3.
    LEGAL
    PROCEEDINGS    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    Common StockHigh Price


Low PriceCalendar 2007Fourth Quarter

$
4.95


$
3.20Third Quarter

$
3.20


$
7.12Second Quarter

$
4.58


$
8.07First Quarter

$
4.08


$
4.83Calendar 2006Fourth Quarter

$
5.10


$
2.95Second Quarter

$
5.85


$
3.40Third Quarter

$
4.85


$
3.65First Quarter

$
5.35


$
3.31  17




---



##### Table of Contents



Stock
    Issuances
      Dividend
    Policy
   18




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  As of and for the Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Statement of Operations DataNet revenues

$
9,175


$
1,666


$
6,084


$
2,554


$
4,310Cost of revenues


9,763



2,900



6,001



2,239



3,304Gross margin


(588
)


(1,234
)


83



315



1,006Operating expensesResearch and Development


1,159



1,363



804



925



799Asset Impairment


















200Selling, general and administrative


7,766



4,178



2,870



2,325



2,919Total Operating Expense


8,925



5,541



3,674



3,250



3,918Other Income and ExpenseInterest and Financing Fees, net


343



550



13



(255
)


(234
)Equity in losses


(177
)


(3
)


(118
)


(192
)


(40
)Gain on Debt Restructuring






1,392



1,569







Total Other Income and (Expense)


166



1,939



1,464



(447
)


(274
)Net loss

$
(9,347
)

$
(4,836
)

$
(2,127
)

$
(3,382
)

$
(3,186
)Per common share:Net loss per common share

$
(0.59
)

$
(0.33
)

$
(0.18
)

$
(0.38
)

$
(0.43
)Weighted average number common shares outstanding


15,796,000



14,802,000



11,644,000



8,832,000



7,441,000Balance Sheet DataTotal assets

$
21,173


$
15,730


$
21,973


$
5,888


$
4,870Long-term debt

$
1,306


$
1,295


$
2,321


$
3,341


$
3,347Shareholders equity (deficit)

$
14,177


$
11,964


$
16,604


$
103


$
(864
)  19




---



##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
    60-65%
         20




---



##### Table of Contents




    Enova increased its personnel by nearly 50% during 2007. The
    increase was due to direct strengthening of Enovas Supply
    Chain Management, Quality, Software and Engineering Departments.
    International Truck and Engine (IC Corp), the nations
    largest School Bus manufacturer, has partnered with Enova to
    supply the nations 1st production Hybrid School
    Buses. IC Corp currently maintains 60% of the School Bus market.
    In addition to School Buses, IC Corp is teaming with Enova, as
    early adopters, to supply production hybrid buses to the
    Commercial Bus Market. Enova and IC recently broadened their
    penetration into Canada and Mexico. There are no assurances,
    however that any purchase orders will be realized.
    WrightBus, the largest low-floor and Double Deck bus
    manufacturer in the United Kingdom, has taken delivery of our
    series hybrid diesel genset and integrated them into its medium
    and large bus applications. Six of these systems are now running
    seven days a week 18 hours a day in London. We continue to
    work with WrightBus on projects related to Enovas hybrid
    drive systems. There are no assurances, however that any
    purchase orders will be realized.
    Tanfield, the Worlds largest electric vehicle
    manufacturer, has signed an arrangement with Enova where Enova
    will supply electric drive systems for Tanfields 3.5, 7.5
    and 12 ton vehicles. Enova expects to supply Tanfield units
    during 2008 and throughout 2009. There are no assurances,
    however that any purchase orders will be realized.
    First Auto Works, Chinas largest vehicle manufacturer has
    partnered with Enova whereas Enova will supply its pre
    transmission hybrid system for bus applications. Enova has
    recently been awarded an order for 20 systems. There are no
    assurances, however that any future purchase orders will be
    realized.
    Th!nk and Electric Vehicles OEMs have both utilized Enova as a
    supplier of primary components/systems for their vehicles.
    Verizon has taken, in total, receipt of fifteen
    (15) service vans incorporating Enovas technology.
    Verizon is the nations second largest fleet operator with
    58,000 vehicles. In addition to Verizon, Enova has begun
    development work with other large fleet operators in both the
    service van and pick up and delivery sectors. There are no
    assurances, however that any purchase orders will be realized.
    The Company integrated and delivered two (2) service
    vehicles with Enovas unique Post-Transmission Parallel
    Hybrid Drive System to Cox Communications. The hybrid vehicles
    are a GM 1500 Silverado Pickup and a Ford E250 Cargo Van. This
    development illustrates Enovas strategic focus to further
    penetrate the fleet market.
    In 2008, the Company was chosen to power four (4) Optare
    Solo Buses, integrated by UK-based Traction Technology Plc. The
    Buses will incorporate Enovas 120kW Series Hybrid
    drive system. There are no assurances, however that any future
    purchase orders will be realized.    on-site on-site back-up
 21




---



##### Table of Contents



Critical
    Accounting Policies
    Cash and cash equivalents
  Inventory first-in,
  Inventory reserve
  Allowance for doubtful accounts
  Stock-based Compensation
  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
 22




---



##### Table of Contents



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
    work-in-progress.
       23




---



##### Table of Contents



Recent
    Accounting Pronouncements
    No. 06-11 No. 06-11), 06-11 No. 06-11
  No. 07-3, (EITF 07-3) EITF 07-3
      Results
    of Operations
  Years
    Ended December 31, 2007 and 2006
  Net Revenues.
 24




---



##### Table of Contents



Cost of Revenues.
  Gross Profit Margin.
  Research and Development Expenses.
  Selling, General and Administrative
    Expenses.
  Interest and Financing Fees, Net.
  Equity in losses of non-consolidated joint
    venture. Form 10-K.
 25




---



##### Table of Contents



Debt and Interest Extinguishment.
  Quarterly
    Results
    March 31,


June 30,2007


2006


2007


2006Net revenues

$
1,543,000


$
309,000


$
1,059,000


$
452,000Cost of revenues


1,383,000



460,000



1,637,000



914,000Gross profit (loss)


160,000



(151,000
)


(578,000
)


(462,000
)Operating ExpensesResearch and development


95,000



325,000



517,000



308,000Selling, general, and administrative


1,328,000



924,000



1,543,000



1,035,000Total operating expenses


1,423,000



1,249,000



2,060,000



1,343,000Other income and (expense)Interest and financing fees, net


111,000



179,000



65,000



151,000Equity in losses of non-consolidated joint venture


(41,000
)


(26,000
)


(29,000
)


(16,000
)Debt extinguishment






920,000







Interest extinguishment






472,000







Total other income (expense)


70,000



1,545,000



36,000



135,000Net income (loss)

$
(1,193,000
)

$
145,000


$
(2,602,000
)

$
(1,670,000
)Basic income (loss) per share

$
(0.08
)

$
0.01


$
(0.18
)

$
(0.11
)Weighted average number of shares outstanding


14,822,000



14,783,000



14,837,000



14,797,000   September 30,


December 31,2007


2006


2007


2006Net revenues

$
2,541,000


$
312,000


$
4,032,000


$
593,000Cost of revenues


2,708,000



620,000



4,035,000



906,000Gross profit (loss)


(167,000
)


(308,000
)


(3,000
)


(313,000
)Operating ExpensesResearch and development


203,000



297,000



344,000



433,000Selling, general, and administrative


1,702,000



1,154,000



3,193,000



1,065,000Total operating expenses


1,905,000



1,451,000



3,537,000



1,498,000Other income and (expense)Interest and financing fees, net


59,000



118,000



108,000



102,000Equity in losses of non-consolidated joint venture


(60,000
)






(47,000
)


39,000Debt extinguishment














Interest extinguishment














Total other income (expense)


(1,000
)


118,000



61,000



141,000Net income (loss)

$
(2,073,000
)

$
(1,641,000
)

$
(3,479,000
)

$
(1,670,000
)Basic loss per share

$
(0.13
)

$
(0.11
)

$
(0.20
)

$
(0.11
)Weighted average number of shares outstanding


16,333,000



14,800,000



17,149,000



14,802,000  26




---



##### Table of Contents



Liquidity
    and Capital Resources
  and/or
                     27




---



##### Table of Contents



Contractual
    Obligations
   Payments Due by PeriodLess than


1-3


3-5


More thanTotal


1 Year


Years


Years


5 YearsLong-Term Debt Obligations

$
1,401


$
95


$
60


$
8


$
1,238Capital Lease Obligations


















Operating Lease Obligations


2,195



439



878



878



Purchase Obligations


















Accrued Interest


874



12











862Total

$
4,470


$
546


$
938


$
886


$
2,100   Subsequent
    Offering
      Joint
    Venture  Hyundai-Enova Innovative Technology
    Center
    Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   28




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  ENOVA
    SYSTEMS, INC.
  CONTENTS
 December 31,
    2007 and 2006
  PageREPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM


30FINANCIAL STATEMENTSBalance Sheets


31Statements of Operations


32Statements of Stockholders Equity


33Statements of Cash Flows


34Notes to Financial Statements


35  29




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
            
  30




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.



BALANCE
    SHEETS  December 31,2007


2006ASSETSCurrent assets:Cash and cash equivalents

$
10,485,000


$
5,612,000Short term investments






5,000,000Accounts receivable, net


4,256,000



358,000Inventories and supplies, net


3,565,000



1,704,000Prepaid expenses and other current assets


457,000



708,000Total current assets


18,763,000



13,382,000Property and equipment, net


870,000



627,000Investment in non-consolidated joint venture


1,470,000



1,647,000Intangible assets, net


70,000



74,000Total assets

$
21,173,000


$
15,730,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,877,000


$
382,000Deferred revenues


101,000



399,000Accrued payroll and related obligations


680,000



220,000Other accrued expenses


2,063,000



664,000Current portion of notes payable


95,000



71,000Total current liabilities


4,816,000



1,736,000Accrued interest payable


874,000



735,000Notes payable, net of current portion


1,306,000



1,295,000Total liabilities

$
6,996,000


$
3,766,000Commitments and contingencies (Note 10)Stockholders equity:Series A convertible preferred stock  no par
    value, 30,000,000 shares authorized; 2,652,000 issued and
    outstanding; liquidating preference at $0.60 per share as of
    December 31, 2007 and 2006


1,679,000



1,679,000Series B convertible preferred stock  no par
    value, 5,000,000 shares authorized; 546,000 and
    1,185,000 shares issued and outstanding; liquidating
    preference at $2 per share as of December 31, 2007 and 2006


1,094,000



2,432,000Common stock  no par value, 750,000,000 shares
    authorized; 17,156,000 and 14,816,000 shares issued and
    outstanding as of December 31, 2007 and 2006


121,970,000



109,460,000Common stock subscribed


30,000



36,000Stock notes receivable for the sale of preferred stock


(1,149,000
)


(1,176,000
)Additional paid-in capital


7,322,000



6,955,000Accumulated deficit


(116,769,000
)


(107,422,000
)Total stockholders equity


14,177,000



11,964,000Total liabilities and stockholders equity

$
21,173,000


$
15,730,000    31




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.



STATEMENTS
    OF OPERATIONS  For the Years EndedDecember 31,2007


2006Net revenuesResearch and development contracts

$



$
439,000Production


9,175,000



1,227,000Total net revenues


9,175,000



1,666,000Cost of revenuesResearch and development contracts






1,046,000Production


9,763,000



1,854,000Total cost of revenues


9,763,000



2,900,000Gross loss


(588,000
)


(1,234,000
)Operating expensesResearch and development


1,159,000



1,363,000Selling, general & administrative


7,766,000



4,178,000Total operating expenses


8,925,000



5,541,000Gross operating loss


(9,513,000
)


(6,775,000
)Other income and (expense)Interest and financing fees, net


343,000



550,000Equity in losses of non-consolidated joint venture


(177,000
)


(3,000
)Debt extinguishment






920,000Interest extinguishment






472,000Total other income, net


166,000



1,939,000Net loss

$
(9,347,000
)

$
(4,836,000
)Basic and diluted loss per share

$
(0.59
)

$
(0.33
)Weighted average number of shares outstanding


15,796,000



14,802,000    32




---



##### Table of Contents





ENOVA
    SYSTEMS, INC.



STATEMENTS
    OF STOCKHOLDERS EQUITY  Convertible Preferred Stock








Common Stock


Notes Receivable


AdditionalSeries A


Series B


Common Stock


Subscribed


for the Sale


Paid-In


AccumulatedShares


Amount


Shares


Amount


Shares


Amount


Shares


Amount


of Preferred Stock


Capital


Deficit


TotalBalance, December 31, 2005


2,674,000


$
1,679,000



1,217,000


$
2,434,000



14,783,000



$109,323,000



8,000


$
30,000


$
(1,176,000
)

$
6,900,000


$
(102,586,000
)

$
16,604,000Conversion of Series A and Series B preferred stock


(22,000
)






(32,000
)


(2,000
)


1,000



2,000























Issuance of common stock for director services


















29,000



125,000



(8,000
)


(30,000
)














95,000Issuance of common stock for director bonus


















3,000



10,000























10,000Stock option expense






































55,000







55,000Commitment to issue common stock for director services


























12,000



36,000















36,000Net loss










































(4,836,000
)


(4,836,000
)Balance, December 31, 2006


2,652,000


$
1,679,000



1,185,000


$
2,432,000



14,816,000



$109,460,000



12,000


$
36,000


$
(1,176,000
)

$
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


















34,000



144,000



(12,000
)


(36,000
)














108,000Issuance of common stock for director bonus


















16,000



68,000























68,000Stock option expense






































367,000







367,000Commitment to issue common stock for director services


























6,000



30,000















30,000Cash received for stock note receivable


































27,000











27,000Net loss










































(9,347,000
)


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


2,652,000


$
1,679,000



546,000


$
1,094,000



17,156,000



$121,970,000



6,000


$
30,000


$
(1,149,000
)

$
7,322,000


$
(116,769,000
)

$
14,177,000    33




---



##### Table of Contents





ENOVA
    SYSTEMS, INC.



STATEMENTS
    OF CASH FLOWS  Twelve Months EndedDecember 31,2007


2006Cash flows from operating activitiesNet loss

$
(9,347,000
)

$
(4,836,000
)Adjustments to reconcile net loss to net cash used in operating
    activitiesDebt extinguishment






(920,000
)Interest extinguishment






(472,000
)Depreciation and amortization


300,000



419,000Loss on asset disposal


52,000



Inventory reserve


100,000



Equity in losses of non-consolidated joint venture


177,000



3,000Issuance of common stock for director bonuses


68,000



10,000Issuance of common stock for director services


138,000



132,000Stock option expense


367,000



55,000(Increase) decrease in:Accounts receivable


(3,898,000
)


1,815,000Inventory and supplies


(1,961,000
)


(688,000
)Prepaid expenses and other current assets


251,000



(526,000
)Increase (decrease) in:Accounts payable


1,495,000



(1,014,000
)Accrued expenses


1,856,000



387,000Deferred revenues


(298,000
)


399,000Accrued interest payable


139,000



92,000Net cash used in operating activities


(10,561,000
)


(5,144,000
)Cash flows from investing activitiesPurchases of short-term investments

$



$
(5,000,000
)Maturities of short-term investments


5,000,000Purchases of property and equipment


(515,000
)


(259,000
)Net cash provided by (used in) investing activities


4,485,000



(5,259,000
)Cash flows from financing activitiesPayment on notes payable and capital lease obligations

$
(38,000
)

$
(172,000
)Net proceeds from sales of common stock


10,767,000



Proceeds from the execution of stock options


193,000



Proceeds from repayment of stock note receivable


27,000



Net cash provided by (used in) financing activities


10,949,000



(172,000
)Net increase (decrease) in cash and cash equivalents


4,873,000



(10,575,000
)Cash and cash equivalents, beginning of period


5,612,000



16,187,000Cash and cash equivalents, end of period

$
10,485,000


$
5,612,000Supplemental disclosure of cash flow informationInterest paid

$
7,000


$
1,000Income taxes paid

$
1,000


$
1,000Assets acquired through financing arrangements

$
74,000


$
95,000    34




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.



NOTES TO
    FINANCIAL STATEMENTS  1.
    Description
    of Business  General
    Liquidity
    Joint
    Venture  Hyundai-Enova Innovative Technology
    Center
        2.
    Summary
    of Significant Accounting Policies  Revenue
    Recognition
      
    Persuasive evidence of an arrangement exists; 35




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   
    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
    work-in-progress.
   36




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Deferred
    Revenue
    Comprehensive
    Income
    Cash
    and Cash Equivalents
    Short-Term
    Investments
    Accounts
    Receivable
    Allowance
    for Doubtful Accounts
    Inventories
    and Supplies
  (first-in,
 37




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Property
    and Equipment
      Assets
    Held as Leasehold Improvements
    Impairment
    of Long-Lived Assets
      Equity
    Method Investment
    Patents
    Intangible
    Assets  Development Agreement
   38




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Impairment
    of Intangible Assets
  6
  Fair
    Value of Financial Instruments
    Stock-Based
    Compensation
  Share-Based Payment
    Accounting for Stock Issued to Employees
 39




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Advertising
    Expense
    Research
    and Development
    Income
    Taxes
      Loss
    Per Share
      Year Ended


Year EndedDecember 31,


December 31,2007


2006Options to purchase common stock


329,000



162,000Warrants to purchase common stock






Potential equivalent shares excluded


329,000



162,000   Commitments
    and Contingencies
   40




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Estimates
    Concentration
    of Credit Risk
    Major
    Customers
      Recent
    Accounting Pronouncements
    No. 06-11 No. 06-11), 06-11
 41




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  No. 06-11
  No. 07-3, (EITF 07-3) EITF 07-3
      3.
    Inventory  (first-in,
  2007


2006Raw materials

$
3,037,000


$
1,285,000Work-in-process


489,000



482,000Finished Goods


139,000



Reserve for obsolescence


(100,000
)


(63,000
)Total

$
3,565,000


$
1,704,000    42




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  4.
    Property
    and Equipment    2007


2006Computers and software

$
593,000


$
464,000Machinery and equipment


1,485,000



1,155,000Furniture and office equipment


269,000



246,000Demonstration vehicles and buses


397,000



421,000Leasehold improvements


70,000



70,000Construction in progress


60,000



2,874,000



2,356,000Less accumulated depreciation and amortization


(2,004,000
)


(1,729,000
)Total

$
870,000


$
627,000     5.
    Investment
    in Non-Consolidated Joint Venture  ITC      December 31,


December 31,2007


2006Financial positionCurrent assets

$
3,635,000


$
4,100,000Property and equipment, net


42,000



12,000Liabilities


(2,000
)


Equity

$
3,675,000


$
4,112,000OperationsNet revenues

$
202,000


$
259,000Expenses


(872,000
)


(458,000
)Interest income


233,000



192,000Net loss

$
(437,000
)

$
(7,000
)Companys proportionate share of net loss

$
(177,000
)

$
(3,000
)   6.
    Intangible
    Assets   43




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      2007


2006Patents

$
93,000


$
93,000Valuation Participation Agreement


577,000



577,000670,000



670,000Less accumulated amortization


(600,000
)


(596,000
)Total

$
70,000


$
74,000     7.
    Notes
    Payable   44




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    2007


2006Secured note payable to Credit Managers Association of
    California, bearing interest at prime plus 3% (10.75% at
    December 31, 2007) and through maturity. Principal and
    unpaid interest due in April 2016. A sinking fund escrow is
    required to 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


59,000



88,000Secured 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


27,000



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


37,000



1,401,000



1,366,000Less current portion


(95,000
)


(71,000
)Long-term portion

$
1,306,000


$
1,295,000     December 31,20072008

$
95,0002009


50,0002010


10,0002011


8,0002012


Thereafter


1,238,000Total

$
1,401,000   8.
    Revolving
    Credit Agreement   45




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  9.
    Deferred
    Revenues  SOP 81-1-
  00-21
  10.
    Commitments
    and Contingencies  Leases
       46




---



##### Table of Contents



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

OperatingDecember 31

Leases2008

$
439,0002009


439,0002010


439,0002011


439,0002012 and thereafter


439,000Total

$
2,195,000   Employment
    Contracts
    11.
    Stockholders
    Equity  Common
    Stock
    Common
    Stock Subscribed
    Series A
    Preferred Stock
     47




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Series B
    Preferred Stock
    Warrants
      12.
    Stock
    Options  Stock
    Option Program Description
       48




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
             49




---



##### Table of Contents



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


AverageNumber of


Average


Remaining


AggregateShare


Exercise


Contractual


IntrinsicOptions


Price


Term


ValueOutstanding at December 31, 2005


458,000


$
4.48



6.8


$
147,000Granted


46,000



4.60



10



6,000Exercised














Forfeited or expired


(342,000
)


4.91







Outstanding at December 31, 2006


162,000



4.43



7.96



60,000Granted


215,000



4.10



5



151,000Exercised


(44,000
)


4.36







Forfeited or expired


(4,000
)


4.35







Outstanding at December 31, 2007


329,000



4.23



5.85



188,000Vested and expected to vest at December 31, 2007


314,000



4.23



5.66



179,000Options exercisable at December 31, 2007


204,000


$
4.28



5.85


$
41,000         Fiscal Year EndedDecember 312007


2006Total intrinsic value of stock options exercised

$
29,000


$
Cash received from stock option exercises

$
193,000


$
Gross 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
    2007


2006Expected life (in years)


3 - 5



5Average risk-free interest rate


3 - 4
%


4
%Expected volatility


75 - 104
%


75
%Expected dividend yield


0
%


0
%     13.
    Income
    Taxes      2007


2006Deferred tax assetsFederal tax loss carry-forward

$
35,668,000


$
34,650,000State tax loss carry-forward


2,057,000



1,548,000Basis difference






1,610,000Stock based compensation


167,000



Other, net


(222,000
)


(114,000
)37,670,000



37,694,000Less valuation allowance


(37,670,000
)


(37,694,000
)Net deferred tax assets

$



$
      51




---



##### Table of Contents



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


December 31,2007


2006Tax benefit computed at 34%

$
3,178,000


$
1,644,000Change in valuation allowance


(24,000
)


(2,444,000
)State tax (net of Federal benefit)


543,000



Change in carryovers and tax attributes


(3,697,000
)


800,000Net tax benefit

$



$
   14.
    Related
    Party Transactions      15.
    Employee
    Benefit Plan   52




---



##### Table of Contents



ENOVA
    SYSTEMS, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  16.
    Geographic Area Data    2007


2006United States

$
3,080,000


$
579,000Mexico


59,000



Italy






5,000Korea


359,000



753,000Japan


87,000



43,000China






68,000Malaysia






21,000Ireland






115,000United Kingdom


5,138,000



72,000Norway


452,000



10,000Total

$
9,175,000


$
1,666,000   17.
    Subsequent
    Events     53




---



##### Table of Contents



ITEM 9.
    CHANGES
    AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE  Form 10-Q Form 10-Q),
    Regulation S-K
  Form 8-K Form 10-Q Form 8-K Form 10-Q) Form 10-Q
  Form 10-Q.
  Form 10-Qs
    Regulation S-K:
  Form 10-Q, Form 10-Q
  Form 10-Q,
 54




---



##### Table of Contents



ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Form 10-K, Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f). Internal Control  Integrated Framework issued
    by the Committee of Sponsoring Organizations of the Treadway
    Commission
        Remedial
    Actions and Changes in Internal Control over Financial
    Reporting
    
    We created a regulatory compliance department in light of
    efforts for meeting Section 404 of the Sarbanes-Oxley Act
    of 2002. The regulatory compliance department, in cooperation
    and in conjunction with efforts by the Audit Committee and
    executive management, is responsible for ensuring the operating
    effectiveness of internal controls over financial reporting with
    the objective of appropriately addressing the risk of material
    misstatement in our financial statements. 55




---



##### Table of Contents




    We enhanced period end internal controls such as robust account
    balance reconciliations, inspection of documents used to support
    the substance and form of inventory transactions, including, the
    summarizing, recording, and processing with warehouse,
    engineering, and production personnel, and executive management.
    We hired a full-time controller to oversee the day-to-day
    functions of the accounting and finance department. Our Chief
    Financial Officer had acted in the capacity of the Controller
    prior to the filling of the position.
    We hired a full-time Inventory Control Manager to summarize and
    manage the movement or tracking of inventory throughout the
    production process. We also hired a full-time Production
    Scheduler to manage the production schedule requirements and
    assist in monitoring the production process.
    We hired a full-time Senior/Cost Accountant to assist in the
    evaluation of the inventory accounts and job costing.
    We hired a full-time Shop Supervisor to handle the daily
    operations of the production process.
    We hired a full-time Financial Reporting Manager to manage our
    external financial reporting processes, including periodic
    filings with the SEC.
    We hired a full-time Director of Supply chain to develop and
    manage the materials planning function.    ITEM 9B.
    OTHER
    INFORMATION  None
 PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Equity
    Compensation Plan Information
   56




---



##### Table of Contents



Equity
    Compensation Plan Information
  Number of SecuritiesRemaining Available forFuture Issuance underNumber of Securities to


Weighted-Average


Equity Compensationbe Issued upon Exercise


Exercise Price of


Plans (Excludingof Outstanding 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


329,000


$
4.23



2,785,000Equity compensation plans not approved by security holders










Total


329,000


$
4.23



2,785,000   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   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 3.1 of our Annual Report on
    Form 10-K
    for the fiscal year ending December 31, 2006, as filed on
    April 2, 2007)3
.3

Amendment to Bylaws (incorporated by reference to
    Exhibit 3.1 of our Current Report on
    Form 8-K
    filed August 30, 2007)3
.4

Amendments to Bylaws (incorporated by reference to
    Exhibit 3.2 of our Current Report on
    Form 8-K
    filed December 10, 2007)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) 57




---



##### Table of Contents



Exhibit #

Description10
.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*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)+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. 58




---



##### Table of Contents



SIGNATURES
    ENOVA SYSTEMS, INC.
  By:
    /s/  Michael
    Staran       POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Michael
    StaranMichael
    Staran

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

March 26, 2008/s/  Jarett
    FentonJarett
    Fenton

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

March 26, 2008/s/  Anthony
    N. RawlinsonAnthony
    N. Rawlinson

Director, Chairman of the Board

March 26, 2008/s/  Bjorn
    AhlstromBjorn
    Ahlstrom

Director

March 26, 2008/s/  Malcolm
    CurrieMalcolm
    Currie

Director

March 26, 2008/s/  Donald
    H. DreyerDonald
    H. Dreyer

Director

March 26, 2008 59




---



##### Table of Contents



Signature

Title

Date/s/  John
    MicekJohn
    Micek

Director

March 26, 2008/s/  John
    R. WallaceJohn
    R. Wallace

Director

March 26, 2008/s/  Edwin
    RiddellEdwin
    Riddell

Director

March 26, 2008  60




---



##### Table of Contents



EXHIBIT INDEX
  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 3.1 of our Annual Report on
    Form 10-K
    for the fiscal year ending December 31, 2006, as filed on
    April 2, 2007)3
.3

Amendment to Bylaws (incorporated by reference to
    Exhibit 3.1 of our Current Report on
    Form 8-K
    filed August 30, 2007)3
.4

Amendments to Bylaws (incorporated by reference to
    Exhibit 3.2 of our Current Report on
    Form 8-K
    filed December 10, 2007)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*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)+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.