Inova Technology (IVTH) 8-K Entry into a Material Definitive Agreement

INOVA TECHNOLOGY FORM 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):

December 21, 2007

INOVA TECHNOLOGY, INC.

(Formerly Edgetech Services. Inc.)

(EXACT NAME OF REGISTRANT SPECIFIED IN CHARTER)

NEVADA	000-27397	98-0204280
(STATE OF INCORPORATION)	(COMMISSION FILE NUMBER)	(IRS EMPLOYER IDENTIFICATION NO.)

233 Wilshire Boulevard, Suite 400, Santa Monica, CA, 90401

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

800 757 9808

 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Item 1   Entry into a Material Definitive Agreement

On December 21, 2007, Inova acquired Texas-based Desert Communications (“Desert”) for $6.2 million ($3.3 million cash, a $2.3 million notes payable and a $0.6 million payable).

Desert provides IT services to a customer base that primarily consists of Texas based school districts, local government entities and corporations. Services provided by Desert include IT network and communications services, network design, implementation and maintenance.

Funding for the acquisition was obtained from IBM and Boone Opportunity Lenders (“Boone”). IBM provided $1.8 million of a $2.5 million line of credit and Boone Opportunity Lenders provided a $1.4 million debenture. IBM’s line of credit and Boone’s loans are secured by all of Inova’s and Inova’s subsidiaries assets. Inova also signed a $2.3 million promissory note payable to the previous owners of Desert. See Note 5 for more details.

The purchase price allocation is preliminary awaiting a final valuation of the assets acquired.  The estimated fair values of the assets acquired and the liabilities assumed at December 21, 2007 are as follows:

Cash	$	2,222,632
Accounts receivable		2,406,695
Inventory		293,283
Prepaid expense		6,654
Fixed assets		167,139
Goodwill		4,101,000
Accounts Payable and accrued liabilities		(3,009,077	)
Total	$	6,188,326

The financial results of the acquisition are included in the financial statements below. The following shows the unaudited pro forma results of operations as though the purchase of Desert Communications had been completed June 30, 2006.

	31-Dec-07		30-Oct-07
	Desert		Inova			Proforma
Balance Sheet
Cash		2,222,632		24,890			2,247,522
Accounts receivable		2,406,695		84,689			2,491,384
Other assets		6,654		103,974			110,628
Inventory		293,283		12,578			305,861
Goodwill				436,572			436,572
Fixed assets		167,139		3,254			170,393
Total assets		5,096,403		665,957			5,762,360
Accounts payable		1,011,138		544,033			1,555,171
Accrued liabilities		994,688		25,699			1,020,387
Notes payable-short term		1,427,820		99,160			1,526,980
Notes payable-shareholders				873,516			873,516
Total liabilities		3,433,646		1,542,408			4,976,054
Common stock		430		758,682			759,112
Paid in capital				(897,869	)		(897,869	)
Retained earnings		1,662,327		(737,264	)		925,063
Total equity		1,662,757		(876,451	)		786,306
Total liabilities and equity		5,096,403		665,957			5,762,360

Income Statement	Six months ended			Six months ended
	12/31/2007			10/31/2007			Proforma
Net sales		8,532,317			476,066			9,008,383
Cost of goods sold		6,037,527			210,518			6,248,045
Gross profit		2,494,790			265,548			2,760,338
Operating expenses		1,463,173			235,623			1,698,796
Other income (expense)		(805	)		(175,998	)		(176,803	)
Net income		1,030,812			(146,073	)		884,739

Income Statement	Twelve months ended		Twelve months ended
	6/30/2007		4/30/2007			Proforma
Net sales		14,623,483		1,615,187			16,238,670
Cost of goods sold		9,816,485		578,336			10,394,821
Gross profit		4,806,998		1,036,851			5,843,849
Operating expenses		3,005,757		1,136,141			4,141,898
Other income (expense)		2,723		(30,949	)		(28,226	)
Net income from continuing ops		1,803,964		(130,239	)		1,673,725
Income from discontinued ops				84,888			84,888
Translation loss				(4,877	)		(4,877	)
Loss from disposal of discontinued ops				(1,236,362	)		(1,236,362	)
Comprehensive income		1,803,964		(1,286,590	)		517,374

* Pursuant to Item 601(b)(2) of Regulation S-K, certain of the exhibits and schedules may have been omitted. If so, such exhibits and schedules will be provided to the Securities and Exchange Commission upon request.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Inova Technology, Inc.
Date: April 24, 2008	By:	/s/ Adam Radly
		Adam Radly
		Chairman & Chief Executive Officer