UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
  Form
10-Q/A
  
 (Mark
One)
 
 x
                  QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For the quarterly period ended July
      31, 2008o
                  TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from ______________ to
  _____________
 Commission file number: 000-27397
 INOVA
TECHNOLOGY INC.
 (Exact
name of small business issuer in its charter)
 
 Nevada
                  
                  98-0204280(State
      or other jurisdiction of incorporation
                    or
      organization)
                  
                  (I.R.S.
      Employer Identification
No.)
 
 233
Wilshire Blvd, Suite 400,
 Santa
Monica, CA, 90401
 (Address
of principal executive offices)
 
 89146
                
                (310)
      857-6666(Postal
      Code)
                
                (Issuer's
      telephone number)
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13or 15(d)of the Exchange
Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. x Yes o No
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). o Yes x No
 
 State the
number of shares of outstanding of each of the issuer’s classes of common
equity, as of September 15, 2008: 964,870,775
  Transitional
      Small Business Disclosure Format (Check one):
              Yes 
      o
              No
      x
  
 Inova
Technology, Inc. and Subsidiaries
 Consolidated
Balance Sheets
 Balance
Sheets as of July 31, 2008
 (Unaudited)
 
 July
      31, 2008
                                
                                
                                April
      30, 2008Restated
                                
                                
                                RestatedASSETSCurrent
      assetsCash
                                
                                $
                                256,805
                                
                                
                                $
                                12,167Accounts
      receivable
                                
                                
                                3,067,870
                                
                                
                                
                                3,003,170Inventory
                                
                                
                                103,658
                                
                                
                                
                                101,679Cost
      in excess of billing
                                
                                
                                180,958
                                
                                
                                
                                198,655Prepaid
      and other current assets
                                
                                
                                580,771
                                
                                
                                
                                234,645Total
      current assets
                                
                                
                                4,190,062
                                
                                
                                
                                3,550,316Fixed
      assets
                                
                                
                                186,268
                                
                                
                                
                                183,926Intangible
      assets
                                
                                
                                737,224
                                
                                
                                
                                845,332Goodwill
                                
                                
                                5,904,782
                                
                                
                                
                                5,904,782Total
      assets
                                
                                $
                                11,018,336
                                
                                
                                $
                                10,484,356LIABILITIES
      AND STOCKHOLDERS DEFICITCurrent
      liabilitiesAccounts
      payable
                                
                                $
                                2,382,941
                                
                                
                                $
                                1,746,889Accrued
      liabilities
                                
                                
                                146,233
                                
                                
                                
                                270,061Current
      maturities of long-term debt - related parties
                                
                                
                                227,237
                                
                                
                                
                                403,792Current
      maturities of long-term debt
                                
                                
                                1,205,772
                                
                                
                                
                                1,200,855Deferred
      income
                                
                                
                                520,475
                                
                                
                                
                                2,648,678Total
      current liabilities
                                
                                
                                4,482,608
                                
                                
                                
                                6,270,275Long
      term debt - net of current maturities
                                
                                
                                3,181,738
                                
                                
                                
                                2,812,133Total
      liabilities
                                
                                
                                7,664,346
                                
                                
                                
                                9,082,408Stockholders'
      deficitConvertible
      preferred stock, $0.001 par value; 25,000,000
                                
                                
                                
                                
                                
                                
                                4,951shares
      authorized; 0 and 4,951,000 issued andoutstandingCommon
      stock, $0.001 par value; 3,000,000,000 shares
                                
                                
                                2,412
                                
                                
                                
                                1,500authorized;
      2,412,187 shares and 1,500,000shares
      issued and outstanding, respectivelyAdditional
      paid-in capital
                                
                                
                                5,117,422
                                
                                
                                
                                3,463,158Retained
      deficit
                                
                                
                                (1,765,844
                                )
                                
                                
                                (2,067,661
                                )Total
      stockholders' equity (deficit)
                                
                                
                                3,353,990
                                
                                
                                
                                1,401,948Total
      liabilities and stockholders' equity (deficit)
                                
                                $
                                11,018,336
                                
                                
                                $
                                10,484,356
   2
  Inova
Technology, Inc. and Subsidiaries
 Consolidated
Statements of Operations
 For
the three months ended July 31, 2008 and 2007
 (Unaudited)
 07/31/0707/31/08
                                    
                                    
                                    RestatedRevenues
                                    
                                    $
                                    5,892,315
                                    
                                    
                                    $
                                    385,112Cost
      of revenues
                                    
                                    
                                    (4,040,229
                                    )
                                    
                                    
                                    (145,263
                                    )Operating
      expenses
                                    
                                    
                                    (1,287,347
                                    )
                                    
                                    
                                    (170,251
                                    )Operating
      income
                                    
                                    
                                    564,739
                                    
                                    
                                    
                                    69,598Other
      income (expense):Interest
      expense
                                    
                                    
                                    (262,923
                                    )
                                    
                                    
                                    (31,695
                                    )Net
      income
                                    
                                    $
                                    301,816
                                    
                                    
                                    $
                                    37,903Basic
      and diluted income per share:
                                    
                                    $
                                    0.13
                                    
                                    
                                    $
                                    0.03Weighted
      average common shares
                                    
                                    
                                    2,412,177
                                    
                                    
                                    
                                    1,500,000
   3
 INOVA
TECHNOLOGY, INC.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For
the three months ended July 31, 2008 and 2007
 (Unaudited)
 July
      31, 2007July
      31, 2008
                                              
                                              
                                              RestatedCASH
      FLOWS OPERATING ACTIVITIESNet
      loss
                                              
                                              $
                                              301,816
                                              
                                              
                                              $
                                              37,903Adjustments
      to reconcile net income to net cash used provided byoperating
      activities:Additional
      shares issued for conversion of debt
                                              
                                              
                                              -
                                              
                                              
                                              
                                              2,225Amortization/depreciation
      expense
                                              
                                              
                                              287,089
                                              
                                              
                                              
                                              30,054Accrued
      management fees
                                              
                                              
                                              30,000
                                              
                                              
                                              
                                              -Interest
      expense from conversion of debt to equity
                                              
                                              
                                              126,340
                                              
                                              
                                              
                                              -Changes
      in operating assets and liabilities:Increase
      (decrease) in accounts receivable
                                              
                                              
                                              (64,700
                                              )
                                              
                                              
                                              31,190Increase
      (decrease) in inventory
                                              
                                              
                                              15,718
                                              
                                              
                                              
                                              540Increase
      (decrease) in prepaid assets
                                              
                                              
                                              (346,126
                                              )
                                              
                                              
                                              10,784Increase
      (decrease) in A/P and accrued expenses
                                              
                                              
                                              649,024
                                              
                                              
                                              
                                              40,878Increase
      (decrease) in deferred income
                                              
                                              
                                              116,683
                                              
                                              
                                              
                                              -Net
      cash provided by (used by) operating activities
                                              
                                              
                                              814,028
                                              
                                              
                                              
                                              153,574CASH
      FLOW INVESTING ACTIVITIESIncrease from acquisition-goodwill
                                              
                                              
                                              -Purchase
      of fixed assets
                                              
                                              
                                              (11,556
                                              )
                                              
                                              
                                              (2,215
                                              )Net cash provided by investing activities
                                              
                                              
                                              (11,556
                                              )
                                              
                                              
                                              (2,215
                                              )CASH
      FLOW FINANCING ACTIVITIESProceeds
      from loans
                                              
                                              
                                              671,125
                                              
                                              
                                              
                                              110,000Repayments
      made on notes payable - related parties
                                              
                                              
                                              (37,700
                                              )
                                              
                                              
                                              -Repayments
      made on notes payable
                                              
                                              
                                              (1,493,075
                                              )
                                              
                                              
                                              (237,508
                                              )Net
      cash provided by financing activities of continuing
    operations
                                              
                                              
                                              (859,650
                                              )
                                              
                                              
                                              (127,508
                                              )NET
      CHANGE IN CASH
                                              
                                              
                                              (57,178
                                              )
                                              
                                              
                                              23,851CASH
      AT BEGINNING OF YEAR
                                              
                                              
                                              12,167
                                              
                                              
                                              
                                              22,847CASH
      AT END OF YEAR
                                              
                                              $
                                              256,805
                                              
                                              
                                              $
                                              46,698SUPPLEMENTAL
      INFORMATION:Interest
      paid
                                              
                                              $
                                              42,209
                                              
                                              
                                              $
                                              15,127Income
      taxes paid
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
 Non-cash
      investing and financing activitiesDiscount
      on NP – BCF
                      
                      $
                      280,942
                      
                      
                      $
                      54,427Discount
      on NP – Warrant
                      
                      
                      166,183
                      
                      
                      
                      54,428Common
      stock issued for debt
                      
                      
                      1,087,247
                      
                      
                      
                      -Preferred
      stock converted to Common stock
                      
                      
                      120,573
                      
                      
                      
                      -Net
      liabilities assumed under Right Tag Acq.
                      
                      
                      -
                      
                      
                      
                      111,572
   See
summary of accounting policies and notes to consolidated financial
statements.
  4
  INOVA
TECHNOLOGY, INC.
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
 NOTE
1 –BASIS OF PRESENTATION
 
 The
accompanying unaudited interim consolidated financial statements of Inova have
been prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange Commission
and should be read in conjunction with the audited financial statements and
notes thereto contained in Inova’s latest Annual Report filed with the SEC on
Form 10-KSB. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position
and the results of operations for the interim periods presented have been
reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full
year.  Notes to the consolidated financial statements that would
substantially duplicate the disclosure contained in the audited financial
statements for the most recent fiscal year as reported in Form 10-KSB have been
omitted.
 
 Inova’s
acquisition of Web’s Biggest:
 
 During
2008, Inova determined that the original accounting for the merger with Web’s
Biggest in 2005 was incorrect. Both companies were operating companies and the
intent of the combined entity was to continue on with both operations. Inova
should have accounted for the transaction as a reverse acquisition whereby Web’s
Biggest purchased Inova and fair value and purchase accounting would apply. The
purchase price was $2,464,908 (70,425,950 shares issued at their market value of
$0.035 per share on June 1, 2005) and the fair value of the net liabilities
assumed was $508,037, resulting in goodwill and intangible assets totaling
$2,972,945. Inova recorded goodwill of $2,612,304 and intangible asset of
$360,641 through additional paid in capital. Inova also recorded $230,410
amortization of intangible asset through reduction of retained earnings. An
impairment analysis at April 30, 2008 has been undertaken and a reduction to
goodwill of $324,310 has been booked.
  Unrecorded
management fees:
 
 During
2008, Inova identified that there were management fees of $15,000 per month for
prior periods which were not recognized but which are now being realized as an
increase in expense and in paid in capital. This totaled $270,000, which
increases net loss for fiscal 2007.  Intangible amortization was
$10,018.
   5
 
 Inova
Technology, Inc. and Subsidiaries
 Consolidated
Balance Sheets Impacts
 Balance
Sheets as of July 31, 2008
 (Unaudited)
 The
following table sets forth the effects of the restatement adjustments on the
consolidated balance sheet as of July 31, 2008.
 July
      31, 2008As
      Previously
                                          
                                          
                                          
                                          
                                          
                                          July
      31, 2008
                                          
                                          
                                          April
      30, 2008Reported
                                          
                                          
                                          Adjustments
                                          
                                          
                                          Restated
                                          
                                          
                                          RestatedASSETSCurrent
      assetsCash
                                          
                                          $
                                          256,805
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          256,805
                                          
                                          
                                          $
                                          12,167Accounts
      receivable
                                          
                                          
                                          3,067,870
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          3,067,870
                                          
                                          
                                          
                                          3,003,170Inventory
                                          
                                          
                                          103,658
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          103,658
                                          
                                          
                                          
                                          101,679Cost
      in excess of billing
                                          
                                          
                                          180,958
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          180,958
                                          
                                          
                                          
                                          198,655Prepaid
      and other current assets
                                          
                                          
                                          580,771
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          580,771
                                          
                                          
                                          
                                          234,645Total
      current assets
                                          
                                          
                                          4,190,062
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          4,190,062
                                          
                                          
                                          
                                          3,550,316Fixed
      assets
                                          
                                          
                                          186,268
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          186,268
                                          
                                          
                                          
                                          183,926Intangible
      assets
                                          
                                          
                                          737,224
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          737,224
                                          
                                          
                                          
                                          845,332Goodwill
                                          
                                          
                                          5,904,782
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          5,904,782
                                          
                                          
                                          
                                          5,904,782Total
      assets
                                          
                                          $
                                          11,018,336
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          11,018,336
                                          
                                          
                                          $
                                          10,484,356LIABILITIES
      AND STOCKHOLDERS DEFICITCurrent
      liabilitiesAccounts
      payable
                                          
                                          $
                                          2,382,941
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          2,382,941
                                          
                                          
                                          $
                                          1,746,889Accrued
      liabilities
                                          
                                          
                                          146,233
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          146,233
                                          
                                          
                                          
                                          270,061Current
      maturities of long-term debt - related parties
                                          
                                          
                                          227,237
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          227,237
                                          
                                          
                                          
                                          403,792Current
      maturities of long-term debt
                                          
                                          
                                          1,205,722
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,205,722
                                          
                                          
                                          
                                          1,200,855Deferred
      income
                                          
                                          
                                          520,475
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          520,475
                                          
                                          
                                          
                                          2,648,678Total
      current liabilities
                                          
                                          
                                          4,482,608
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          4,482,608
                                          
                                          
                                          
                                          6,270,275Long
      term debt - net of current maturities
                                          
                                          
                                          3,181,738
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          3,181,738
                                          
                                          
                                          
                                          2,812,133Total
      liabilities
                                          
                                          
                                          7,664,346
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          7,664,346
                                          
                                          
                                          
                                          9,082,408Stockholders'
      deficitConvertible
      preferred stock, $0.001 par value; 25,000,000
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          4,951shares
      authorized; 0 and 4,951,000 issued andoutstandingCommon
      stock, $0.001 par value; 3,000,000,000 shares
                                          
                                          
                                          2,412
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          2,412
                                          
                                          
                                          
                                          1,500authorized;
      2,412,187 shares and 1,500,000shares
      issued and outstanding, respectivelyAdditional
      paid-in capital
                                          
                                          
                                          5,027,422
                                          
                                          
                                          
                                          90,000
                                          
                                          
                                          
                                          5,117,422
                                          
                                          
                                          
                                          3,463,158Retained
      deficit
                                          
                                          
                                          (1,675,844
                                          )
                                          
                                          
                                          (90,000
                                          )
                                          
                                          
                                          (1,765,844
                                          )
                                          
                                          
                                          (2,067,661
                                          )Total
      stockholders' equity (deficit)
                                          
                                          
                                          3,353,990
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          3,353,990
                                          
                                          
                                          
                                          1,401,948Total
      liabilities and stockholders' equity (deficit)
                                          
                                          $
                                          11,018,336
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          11,018,336
                                          
                                          
                                          $
                                          10,484,356
  6
  NOTE
2 – RELATED PARTY TRANSACTIONS
 
 Loans
payable from related parties consists of advances from existing shareholders.
These notes are unsecured, bear interest at 7% to 8%, and are repayable in two
to three years. Amount due to Southbase is $137,192 and due to Advisors, LLC is
$90,045.
 
 During
the three months ended July 31, 2008, 7,959,084 shares of common stock were
issued to Advisors, LLC as partial payment of a note payable and accounts
payable.
 
 NOTE
3 –NOTES PAYABLE
 
 Note
Payable - Ascendiant:
 
 In July
2008, a note payable of $500,000 was issued for 1.5 years by Ascendiant. It is
secured by all assets of Desert and $300,000 escrow for a potential
acquisition.
 
 This loan
has the following financial requirements:
 
 1)
Maintain availability under IBM $2.5 million line of credit of $250,000 or
greater;
 
 2) EBITDA
of $1.7 million for 12 month period ending December 31, 2008 and $300,000 for
each 3-month period beginning December 31, 2007;
 
 3) No
concentration above $2.5 million to any supplier through the IBM
facility;
 
 4) No
concentration above 20% to any single customer;
 
 5) No
single accounts payable more than the greater of $300,000 or 20% of the accounts
receivable balance under 60 days. The portion beyond 90 days past due must be
less than 10% of the total accounts receivable.
 
 As of
July 31, 2008, the minimum time to measure had not elapsed, therefore, no
determination of compliance was made as of that date.
 
 52,896,558
warrants were issued to Ascendiant with this note. The warrants expire in July
2013. They have an aggregated exercise price of $200. The fair value of these
warrants was calculated using the Black-Scholes Model using these
assumptions (1) 3% discount rate, (2) warrant life of 5 years, (3) expected
volatility of 365%, and (4) zero expected dividends. The warrants relative fair
value created a discount of $166,183.
  Inova
signed a put option agreement with Ascendiant whereby anytime between January 1,
2010 and July 1, 2013,Ascendiant can require
Inova torepurchase
from Ascendiant up to 48,978,294 shares of Common Stock for $250,000. The Put is
not in effect until Ascendiant exercises their warrants. As of July 31, 2008,
the warrants had not been exercised.
 
 Inova
analyzed the notes and warrants for derivative accounting consideration under
SFAS 133 and EITF 00-19. Inova determined that derivative accounting is not
applicable. Inova then analyzed the conversion option under EITF 98-5 and EITF
0-27 and determined there was a beneficial conversion feature resulting in a
discount to the note of $280,942.
 
 Inova
entered into a registration agreement with Ascendiant requiring that a filing be
done for the number of Registrable Securities equal to the lesser of (i) the
total number of Registrable Securities and (ii) one-third of the number of
issued and outstanding shares of Common Stock that are held by non-affiliates.
Regristrable securities are (i) all Warrant Shares (ii) any additional shares of
Common Stock issuable in connection with any anti-dilution provisions in the
Warrants (iii) all Put Shares (iv) any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event.
Inova shall pay to Bonne an amount in cash, as partial liquidated damages and
not as a penalty, equal to 2.00% of the aggregate purchase price paid by
Ascendiant pursuant to the Purchase Agreement for any unregistered Registrable
Securities then held by Ascendiant. The parties agree that Inova shall not be
liable for liquidated damages under this Agreement with respect to any Warrants
or Warrant Shares. Inova analyzed the registration right arrangement under the
guidance of FSP EITF 00-19-b and determined that the contingent obligation to
make future payments under the registration payment arrangement is not probable
and can not be reasonably estimated at inception because currently Ascendiant
has not yet exercised the outstanding warrants and the registration right
arrangement would not be effective until the warrants are exercised and become
Common Shares.
 
 7
  All
discounts will be amortized over the life of the notes using the effective
interest method. A summary of the activity on this note for the three month
ended July 31, 2008 is as follows:
 
 Gross
      proceeds from the note
                          
                          $
                          500,000Less:
      Discount related to the origination fees imposed by the
    lender
                          
                          
                          (52,875
                          )Less:
      relative fair value of warrants granted
                          
                          
                          (166,183
                          )Less:
      beneficial conversion feature discount
                          
                          
                          (280,942
                          )Add:
      amortization of discount
                          
                          
                          3,954Carrying
      amount of the note as of July 31, 2008
                          
                          $
                          3,954
  Other
debt transactions during the three months ended July 31, 2008:
 
 The
original Boone Note was $1,792,000 with the option to increase to $2,016,000.
Inova borrowed additional $224,000 from Boone during the quarter ended July 31,
2008. The terms of this additional borrowing are the same as the original Boone
borrowing.
 
 During
the quarter ended July 31, 2008, Inova made the following cash repayments on its
outstanding notes payable:
  Notes
      payable to Desert previous owners
                            
                            $
                            265,389Boone
      Note
                            
                            
                            518,597IBM
      line of credit
                            
                            
                            482,531Total
      cash paid
                            
                            $
                            1,266,517
  During
the three months ended July 31, 2008, Inova recognized $165,813 amortization
expense on the loan discounts originated from its financing arrangement with
Boone and Agile.
  NOTE
4 –COMMON STOCK
 
 During
fiscal 2007 and 2008, Inova issued more common shares to its related parties
than the number of shares previously authorized. These shares were authorized by
the board to be issued to the related parties of the Company for the conversion
of preferred stock and certain outstanding debts. In July 2008, number of
authorized shares was increased to 3,000,000,000 shares. 356,911,705 shares
previously agreed to be issued to the related parties were issued. These shares
were valued at $1,156,937 and additional interest expense of $234,886 was
recorded by Inova for the excess fair value.
 
 During
the first quarter of 2009, 7,959,084 common shares were issued to a related
party as partial payment of a note payable and account payable with carrying
values totaling $46,163.
  8
  NOTE
5 –SEGMENT INFORMATION
 
 Inova has
three reportable segments, one providing IT solutions and services, one
providing hardware and cabling and one which manufactures standards compliant
and durable RFID (Radio Frequency Identification) equipment.  Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly in deciding how
to allocate resources and in assessing performance.
 
 EdgeTech
                        
                        
                        RightTag
                        
                        
                        DCI
                        
                        
                        TotalSales
                        
                        $
                        87,318
                        
                        
                        $
                        16,598
                        
                        
                        $
                        5,788,399
                        
                        
                        $
                        5,892,315Cost
      of sales
                        
                        
                        53,886
                        
                        
                        
                        7,629
                        
                        
                        
                        3,979,077
                        
                        
                        
                        4,040,592Operating
      income (expense)
                        
                        
                        (250,670
                        )
                        
                        
                        (11,720
                        )
                        
                        
                        827,130
                        
                        
                        
                        564,740Interest
      expense
                        
                        
                        23,522
                        
                        
                        
                        -
                        
                        
                        
                        239,401
                        
                        
                        
                        262,923
  NOTE
6 – SUBSEQUENT EVENT
 
 On
September 2, 2008, Inova purchased 40% of the outstanding stock of Innophone for
$40,000. Inova also has the right to buy an additional 400,000,000 shares at a
future date. Innophone is an internet protocol company that owns IP
addresses.
  Item
2. Management Discussion and Analysis of Financial Condition and Result of
Operations.
  The
information contained in this Management’s Discussion and Analysis of Financial
Condition and Results of Operation contains “forward looking statements.”Actual results may materially differ from those projected in the forward
looking statements as a result of certain risks and uncertainties set forth in
this report. Although our management believes that the assumptions made and
expectations reflected in the forward looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact, prove to be
correct or that actual future results will not be materially different from the
expectations expressed in this Annual Report. The following discussion should be
read in conjunction with the unaudited Consolidated Financial Statements and
related Notes included in Item 1.
 
 RESULTS
OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED JULY 31, 2008
 
 Net
revenues increased from $385,112 in the three-month period ending July 31, 2007
to $5,892,315 for the three-month period ending July 31, 2008. This is due to
the revenues from the newly-acquired Desert Communications.
 
 Operating
expenses increased from $170,251 for the three months ending July 31, 2007 to
$1,287,347 for the same period in 2008. This was mainly due to the expenses from
the newly-acquired Desert Communications.
 
 Net
income from continuing operations increased from $37,903 for the three months
ending July 31, 2007 to $301,817 for the same period in 2008. This is due to the
profit from the newly-acquired Desert Communications.
 
 9
  LIQUIDITY
AND CAPITAL RESOURCES
 
 Cash
provided by operations for the three month period ended July 31, 2008 was
$814,028, as compared to cash provided by operations of $153,574 for the three
months ended July 31, 2007. The change is primarily due to the acquisition of
Desert. Cash used in investing activities for the three month period ended July
31, 2008 was $11,556, as compared to $2,215 for the three months ended July 31,
2007. The change was due to fixed asset purchases. Cash used for financing
activities for the three month period ended July 31, 2008 was $859,650, as
compared to $127,508 for the three months ended July 31, 2007. The change was
due to significant loan repayments.
 
 Our
operating activities for the three months ended July 31, 2008, have generated
adequate cash to meet our operating needs. As of July 31, 2008, we had cash and
cash equivalents totaling $256,805, and accounts receivable of
$3,067,870.
 
 Management
believes that existing cash, cash equivalents, together with any cash generated
from operations will be sufficient to meet normal operating requirements
including capital expenditures for the next twelve months.
  Item
4. Controls and Procedures
 
 (a) 
Evaluation of disclosure controls and procedures.
 
 Management
has evaluated, with the participation of our Chief Executive Officer and Chief
Financial Officer, the effectiveness of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) as of the end of the
period covered by this report and concluded that our disclosure controls and
procedures were not effective to ensure that all material information required
to be disclosed in this Quarterly Report on Form 10-Q has been made known to
them in a timely fashion.  We are in the process of improving our internal
control over financial reporting in an effort to remediate these deficiencies
through improved supervision and training of our accounting staff. These
deficiencies have been disclosed to our Board of Directors. We believe that this
effort is sufficient to fully remedy these deficiencies and we are continuing
our efforts to improve and strengthen our control processes and procedures. Our
Chief Executive Office, Chief Financial Officer and directors will continue to
work with our auditors and other outside advisors to ensure that our controls
and procedures are adequate and effective.
 
 (b) 
Changes in internal controls
 
 There
have been no significant changes in our internal controls over financial
reporting that occurred during the fiscal quarter covered by this report that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
  10
  PART
II
 
 Item
1. Legal Proceedings.
 
 None.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
 None.
 
 Item
3. Defaults Upon Senior Securities
 
 Not
Applicable.
  Item
5. Other Information
 
 None.
  Item
6. Exhibits
  (A)
Exhibits
 
 (A)
Exhibits
  ExhibitNumber
              Description31.1
              Certification
       of  the  Chief  Executive Officer required by Rule
       13a  -  14(a)  or  Rule  15d  -
       14(a).31.2
              Certification
       of  the  Chief  Financial Officer required by Rule
       13a  -  14(a)  or  Rule  15d  -
       14(a).32.1
              Certification
       of  the  Chief  Executive Officer required by Rule
       13a  -  14(b)  or Rule 15d - 14(b) and 18 U.S.C.
      1350.32.2
              Certification
       of  the  Chief  Financial Officer required by Rule
       13a  -  14(b)  or Rule 15d - 14(b) and 18 U.S.C.
      1350.
 
 
 11
 
 SIGNATURES
 
 In
accordance with the  requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  
 
 EDGETECH SERVICES
      INC.Date: June 15,
      2009
                  By:
                  /s/
      Adam
      RadlyAdam
      RadlyChairman
      and CEO
 Date: June 15,
      2009
                  By:
                  /s/
      Bob
      BatesBob
      BatesCFO
 
 
 
 12