June 22, 2005
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Julie Sherman
Re: Enova Systems, Inc.
Responses to Comments
Form 10-K for the year ended December 31, 2004
Filed March 31, 2005
SEC File No. 0-25184
Dear Ms. Sherman:
In response to the SEC's comments on the Form 10-K for the year ended December
31, 2004, Enova Systems submits the following responses:
The 2004 Amended 10-K will include audited financials for the ITC (as noted in
Item 4 below) which will require additional time to complete, anticipated, at
this time, to be September 15, 2005.
Item 9a, Controls and Procedures, page 37
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1. The Company acknowledges its understanding that it is not
appropriate to qualify its conclusion with respect to the
effectiveness of its disclosure controls and procedures.
Future filings will include revised language to be consistent with
the definition of disclosure controls and procedures set forth in
Rule 13a-15(e) of the Exchange Act.
2. All future filings will include additional disclosures that, "the
Company's system of internal control over financial reporting is
designed to provide reasonable assurance that the objective of the
system will be met," and "that the design and operation of our
system of internal controls does in fact provide reasonable
assurance in achieving the objectives of the system" consistent
with Part II.F.4 of Release No. 33-8238.
3. All future 10-K filings commencing with our 2005 year-end will
address changes in our internal control over financial reporting
to indicate whether there was any change in our internal control
over financial reporting that occurred during the fourth quarter
that has materially affected or is reasonably likely to materially
affect our internal control over financial reporting as required
by Item 308(c) of Regulation S-K as amended effective August 13,
2003.
Note 1. Organization and Line of Business, page 11
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4. The 2004 Amended 10-K and all future filings will include Rule
3-09 of Regulation S-X financial statements for the Hyundai-Enova
Innovative Technology Center (HEITC) for those years in which the
40% investment in the HEITC exceed 20% of Enova's total assets.
Future Form 10-Qs will include the disclosures required by Item
4-08(g) of Regulation S-X for any significant equity method
investees above the 20% threshhold.
Supplemental Information, page 30
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5. Our auditor for the 2002 financial statements was Moss Adams, LLP.
Although Rule 5-04 of Regulation S-X requires Schedule II to be
filed for each period for which an audited income statement is
provided, we also understand that the rule states that if the
information, including notes, required by the schedule can be
shown in the financial statements without making the statement
unclear or confusing, then the schedule may be omitted.
Additionally, under Rule 4-02, if the amount is not material, this
Rule provides that it does not need to be presented.
For the year ended December 31, 2002, there was no valuation
allowance against receivables as all receivables were deemed
collectible. The allowance against inventory, which was unchanged
at $80,000 since 2000, was deemed immaterial. Therefore a
Supplemental Information schedule was not provided for that year
and therefore no opinion was rendered.
The Company acknowledges:
o it is responsible for the adequacy and accuracy of the disclosure
in the filings;
o SEC staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
o it may not assert any staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
If you have any questions regarding these matters, you may contact me at
310-527-3847.
Very truly yours,
ENOVA SYSTEMS, INC.
By: /s/ Larry Lombard
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Larry Lombard
Chief Financial Officer
cc: Don Dreyer, Audit Committee Chairman
Edwin Riddell, President and CEO
Don Reinke, General Counsel
Elberta Yee, Singer Lewak
Greenbaun & Goldstein, LLP
Steve Wallaert, Moss Adams