INOVA TECHNOLOGY
233 WILSHIRE BLVD., SUITE 400
SANTA MONICA, CA 90401
Linda van Doorn
US Securities and Exchange Commission
Washington, DC 20549
Re: File 0-27397
August 31, 2008
Ms. Van Doorn,
We have completed our recent filings and purchase of a new company and are returning our attention to the open items from your letter of January 9, 2008.
| 1. | Attached are the restatements that reflect the change to compensation expense for management fees and the recognition of goodwill temporarily on the books for the period that the registrant held the Web’s Biggest entity. These will be filed on Edgar once you have confirmed there are no more open items related to these inquiries. |
The company determined that the original accounting for the merger with Web’s Biggest was incorrect. The company should have accounted for the merger as a reverse acquisition whereby the shares retained by the registrant’s shareholders would be fair valued using the closing price of the registrant’s shares (purchase price) and compared to the fair value of the net assets at the time of merger. The company determined the purchase price was (70,425,950 shares x 6/1/05 closing price of $.035 = $2,464,908). The fair value of the net assets was $(508,037) resulting in goodwill of $2,972,945. Therefore the net assets and equity will be increased by this amount.
| 2. | As discussed with Jorge Bonilla we would also like the receipt of this correspondence to permit the review and approval of the pending proxy by your legal division. |
| 3. | The issue regarding the filing of David Lanter’s audit report is on an entity which was disposed of on December 1, 2006. We no longer have access to the records of the company. Furthermore, the PCAOB auditor at the time, George Brenner, has retired for health reasons and is no longer in capacity to perform audits. With neither of these available it is impracticable and irrelevant to perform additional work. |
| 4. | David Lanter was not an official auditor for Web’s Biggest for SEC purposes. His work was a one-time audit of a company’s historical information, for periods prior to it being affiliated with the registrant. |
| 5. | There has now been a formal valuation of Edgetech’s goodwill performed and this provides support for the fair value of the shares as an indicator of the fair value of the transaction. |
| 5. | 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. |
| 7. | We recorded the assets of Data Management at historical cost because the transaction was one among related entities under common control per SFAS 141. The ownership of DM was 100% Paul Aunger and Adam Radly prior to the transfer. Due to cost and low amount of assets there was no outside valuation done. In the absence of this cost value was utilized. |
| 8. | Attached. For 9, the pre-purchase ownership split of DM was 50% Adam Radly, 50% Paul Aunger (and related entities-Advisors, Southbase). |
The pre-purchase amounts for the registrant were < 1 % Adam Radly, 90% Paul Aunger (and related entities).
| 9. | For number 11, we will refile the DM 8K as soon as we have your go-ahead on the above items. |
Regards,
Bob Bates, CFO
DM
| Pre | 100% Paul Aunger/Adam Radly |
| Post | 100% Registrant |
Registrant
| Pre | Advisors, LLC |
| Post | Adam Radly/Southbase |
Advisors, LLC: Paul Aunger
Southbase: Adam Radly
