**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**Form
      10-Q**




(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934For
                the quarterly period endedJuly
                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 13 or 15(d) of
      the
      Exchange Act during the past 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such
      filing requirements for the past 90 days. x Yes 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):
            Yeso
            Nox









Inova
        Technology, Inc. and Subsidiaries
 Consolidated
        Balance Sheets (unaudited)
  July
                  31,
              
              April
                  30,2008
              
              2008ASSETSCurrent
                  assetsCash
              
              $
              256,805
              
              $
              12,167Accounts
                  receivables, net
              
              
              -
              
              
              769,918Contract
                  receivables, net
              
              
              3,067,870
              
              
              2,233,252Inventory
              
              
              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, net
              
              
              186,268
              
              
              183,926Intangible
                  assets, net
              
              
              737,224
              
              
              845,332Goodwill
              
              
              5,904,782
              
              
              5,904,782Total
                  assets
              
              $
              11,018,336
              
              $
              10,484,356LIABILITIES
                  AND STOCKHOLDERS EQUITYCurrent
                  liabilitiesAccounts
                  payable
              
              $
              2,382,941
              
              $
              1,746,889Accrued
                  liabilities
              
              
              146,233
              
              
              270,061Deferred
                  income
              
              
              520,475
              
              
              403,792Note
                  payable - related parties
              
              
              227,237
              
              
              1,200,855Note
                  payable, net
              
              
              1,205,722
              
              
              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'
                  equityConvertible
                  preferred stock, $0.001 par value; 25,000,000
              
              
              -
              
              
              4,951shares
                  authorized; 0 and 4,951,000 issued and outstandingCommon
                  stock, $0.001 par value; 3,000,000,000 shares
              
              
              964,871
              
              
              600,000authorized;
                  964,870,775 shares and 600,000,000shares
                  issued and outstanding, respectivelyAdditional
                  paid-in capital
              
              
              4,064,963
              
              
              2,774,658Accumulated
                  deficit
              
              
              (1,675,844
              )
              
              (1,977,661
              )Total
                  stockholders' equity
              
              
              3,353,990
              
              
              1,401,948Total
                  liabilities and stockholders' equity
              
              $
              11,018,336
              
              $
              10,484,356




2




Inova
        Technology, Inc. and Subsidiaries
 Consolidated
        Statements of Income
 For
        the
        three months ended July 31, 2008 and July 31, 2007 (unaudited)
  07/31/08
                
                07/31/07Revenues
                
                $
                5,892,315
                
                $
                385,112Cost
                    of revenues
                
                
                (4,040,229
                )
                
                (145,263
                )Operating
                    expenses
                
                
                (1,287,347
                )
                
                (140,197
                )Operating
                    income
                
                
                564,739
                
                
                99,652Interest
                    expense
                
                
                (262,923
                )
                
                (31,695
                )Net
                    income
                
                $
                301,816
                
                $
                67,957Basic
                    and diluted income per share
                
                $
                0.00
                
                $
                0.00Weighted
                    average common shares
                
                
                964,870,775
                
                
                600,000,000





3




Inova
        Technology, Inc. and Subsidiaries
 Consolidated
        Statements of Cash Flows
 For
        the
        three months ended July 31, 2008 and 2007 (unaudited)
  July
                    31, 2008
                
                July
                    31, 2007CASH
                    FLOWS OPERATING ACTIVITIESNet
                    income
                
                $
                301,816
                
                $
                67,957Adjustments
                    to reconcile net income to cash provided byoperating
                    activities:Amortization
                    expense
                
                
                277,875
                
                
                2,225Depreciation
                    expense
                
                
                9,214
                
                
                -Accrued
                    management fees
                
                
                30,000
                
                
                -Interest
                    expense from conversion of debt to equity
                
                
                126,340
                
                
                -Changes
                    in operating assets and liabilities:Increase
                    (decrease) in A/P and accrued expenses
                
                
                649,024
                
                
                40,878Increase
                    (decrease) in accounts receivable
                
                
                (64,700
                )
                
                31,190Increase
                    (decrease) in deferred income
                
                
                116,683
                
                
                -Increase
                    (decrease) in inventory
                
                
                15,718
                
                
                540Increase
                    (decrease) in prepaid/other assets
                
                
                (346,126
                )
                
                10,784Net
                    cash provided by operating activities
                
                
                1,115,844
                
                
                153,574CASH
                    FLOWS FROM INVESTING ACTIVITIESPurchase
                    of fixed assets
                
                
                (11,556
                )
                
                (2,215
                )Net
                    cash used in investing activities
                
                
                (11,556
                )
                
                (2,215
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESProceeds
                    from loans
                
                
                671,125
                
                
                110,000Repayment
                    of loans
                
                
                (1,493,075
                )
                
                (237,508
                )Repayment
                    of loans - related parties
                
                
                (37,700
                )
                
                -Net
                    cash used in financing activities
                
                
                (859,650
                )
                
                (127,508
                )NET
                    CHANGE IN CASH
                
                
                244,638
                
                
                23,851CASH
                    AT BEGINNING OF PERIOD
                
                
                12,167
                
                
                22,847CASH
                    AT END OF PERIOD
                
                $
                256,805
                
                $
                46,698SUPPLEMENTAL
                    INFORMATION:Interest
                    paid
                
                $
                42,209
                
                $
                15,127Income
                    taxes paid
                
                
                -
                
                
                -NONCASH
                    INVESTING AND FINANCING ACTIVITIES:Discount
                    on note payable - BCF
                
                $
                280,942
                
                $
                54,427Discount
                    on note payable - Warrants
                
                
                166,183
                
                
                54,428Common
                    stock issued for debt
                
                
                1,087,247
                
                
                -Preferred
                    stock converted to common stock
                
                
                120,573
                
                
                -Net
                    liabilities assumed under the Right Tag acquisition
                
                
                -
                
                
                111,572


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.





**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.




5





Inova
      signed a put option agreement with Ascendiant whereby anytime between January
      1,
      2010 and July 1, 2013, **** Ascendiant
      can require Inova to **** repurchase
      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.





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




6




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.




**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.




7




**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 $140,197 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 decreased from $67,957 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.





**LIQUIDITY
      AND CAPITAL RESOURCES**





Cash
      provided by operations for the three month period ended July 31, 2008 was
      $1,115,844, 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.




8




**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.




9




**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





Exhibit
              Number
            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 Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes- Oxley Act of
                200232.2
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes- Oxley Act of
                2002




**SIGNATURES**





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





Dated:
                September 15, 2008
            By:
            /s/
                Adam RadlyAdam
                RadlyChief
                Executive OfficerDated:
                September 15, 2008
            By:
            /s/
                Bob BatesBob
                BatesChief
                Financial Officer,




10