UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

x           Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
xQuarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended January 31,April 30, 2009
¨Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act   of 1934

¨Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                            ______________  to                              ______________

Commission File Number               000-33391

EV INNOVATIONS, INC.
EV INNOVATIONS, INC.
(Exact name of Small Business Issuer as specified in its charter)

Nevada 88-0490890
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)  

4894 Lone Mountain #168, Las Vegas NV 89130
(Address of principal executive offices) (Postal or Zip Code)

Issuer's telephone number, including area code: 702-425-7376

Former name, former address and former fiscal year, if changed since
Former name, former address and former fiscal year, if changed since last report)

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 ¨ No

Indicate by check mark whether the registrant is a shell company (as defined inhas submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 12b-2405 of Regulation S-T (§232.405 of this chapter) during the Exchange Act.preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ¨    No x¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  (Check One):

Large accelerated filer  ¨                                                                                     Accelerated filer  ¨

Non-accelerated filer    ¨                                                                                     Smaller reporting company  x
Large accelerated filer  ¨
Accelerated filer  ¨
Non-accelerated filer ¨
Smaller reporting company  x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS
 
The number of shares outstanding the issuer's common stock, $.001 par value, was 20,178,66020,468,591 as of March 4,June 11, 2009.


EV INNOVATIONS, INC.

INDEX
Page No.

TABLE OF CONTENTS

Page No.
PART I. FINANCIAL INFORMATION2 
ITEM 1 - Financial Statements2
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.17
ITEM 3 -  Quantitative and Qualitative Disclosures about Market Risk22
ITEM 4T- Controls and Procedures.22
PART II. OTHER INFORMATION22
ITEM 1 - Legal Proceedings
ITEM 6 - Exhibits
EXHIBIT 31 - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
EXHIBIT 32 - Certification pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

PART I.       FINANCIAL INFORMATION

EV INNOVATIONS, INC.

I N D E X

  Page No.
PART I. FINANCIAL INFORMATION 
    
ITEM I - Unaudited Consolidated Financial Statements   
    
Consolidated Balance Sheets as of January 31,April 30, 2009 and July 31, 2008 (Unudited)2
Consolidated Statements of Operations for the Six and Three Months Ended January 31, 2009 and 2008 and from Inception (April 12, 2000) to January 31, 2009 (Unaudited)3
Consolidated Statement of Stockholders Equity (Deficit) (Unaudited)  4 
     
Consolidated Statements of Cash FlowsOperations for the SixNine and Three Months Ended January 31,April 30, 2009 and 2008 and from Inception (April 12, 2000) to January 31, 2009 (Unaudited)  5
Consolidated Statement of Stockholders Deficiency (Unaudited)6
Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2009 and 2008 (Unaudited)7
 
Notes to Unaudited Consolidated Financial Statements  7-168
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.21
ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk26
ITEM 4T– Controls and Procedures.27
PART II. OTHER INFORMATION
ITEM 6 - Exhibits27
EXHIBIT 31 - Certification pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
EXHIBIT 32 - Certification pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following consolidated financial statements be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year  ended July 31, 2008.

The results of operations for the nine months ended April 30, 2009 and 2008 are not necessarily indicative of the results for the entire fiscal year or for any other period.

3

EV INNOVATIONS, INC.
A Development Stage Company

Consolidated Balance Sheets
(UNAUDITED)

 January 31,  July 31, 
 2009  2008  April 30,  July 31, 
       2009  2008 
ASSETS            
            
Current assets:            
Cash $28,288  $101,095  $6,196  $101,095 
Accounts receivable, net of allowance for doubtful accounts of $0 62,090   13,601  48,310  13,601 
Inventories 287,068   287,310  299,413  287,310 
Employee Advances 5,072  - 
Employee advances 2,114  - 
Other current assets  21,656   69,119   9,102   69,119 
Total current assets 404,174  471,125  365,135  471,125 
                
Property and equipment, net 2,076,611   2,014,580  2,065,316  2,014,580 
                
Other long term assets:                
Other assets 51,600   51,600  1,600  51,600 
Deferred patent costs  21,042   19,903   21,042   19,903 
Total other long term assets  72,642   71,503   22,642   71,503 
                
 $2,553,427  $2,557,208  $2,453,093  $2,557,208 
                
LIABILITIES AND STOCKHOLDERS' DEFICIENCY              
                
Current liabilities:                
Current portion of long-term debt $31,572  $32,422  $32,538  $32,422 
Accounts payable and accrued expenses 811,706   330,183  707,951  330,183 
Customer deposits 374,393  149,160  470,892  149,160 
Advances from related parties  684,566   38,000   163,948   38,000 
Total current liabilities  1,902,237   549,765   1,375,329   549,765 
                
Long-term debt - less current portion above  6,636,122   6,135,408   7,261,292   6,135,408 
                
Commitments and contingencies -  -  -  - 
                
Stockholders' deficiency:                
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued -  -  -  - 
Common stock, $.001 par value, 35,714,285 authorized; outstanding 23,347,257 at January 31, 2009 and July 31, 2008, respectively 23,347  23,347 
Common stock, $.001 par value, 50,000,000 authorized; outstanding 20,468,591 at April 30, 2009 and 7,782,419 at July 31, 2008, respectively 20,469  7,781 
Additional paid-in-capital 47,790,509  47,790,509  50,453,637  47,806,075 
Deficit accumulated during the development stage (53,786,376) (51,947,451) (56,645,095) (51,947,451)
Cumulative other comprehensive income (loss)  (12,412)  5,630   (12,539)  5,630 
Total stockholders' deficiency  (5,984,932)  (4,127,965)  (6,183,528)  (4,127,965)
                
 $2,553,427  $2,557,208  $2,453,093  $2,557,208 

SEE NOTES TO UNAUDITED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS


24

EV INNOVATIONS, INC.
A Development Stage Company

Consolidated Statements of Operations
(UNAUDITED)

             INCEPTION              INCEPTION 
 SIX MONTHS ENDED  THREE MONTHS ENDED  (April 12,, 2000)  NINE MONTHS ENDED  THREE MONTHS ENDED  (April 12, 2000) 
 January 31,  January 31,  THROUGH  April 30,  April 30,  THROUGH 
 2009  2008  2009  2008  January 31, 2009  2009  2008  2009  2008  April 30, 2009 
                              
Sales $223,001  $208,703  $221,056  $106,289  $2,192,055  $243,141  $208,703  $22,085  $-  $2,212,195 
                                        
Costs and expenses:                                        
Cost of sales  290,541   292,300   290,541   106,506   2,824,104  403,322  262,035  112,781  -  2,936,885 
General and administrative  788,996   1,447,783   305,095   873,724   43,248,657  3,140,944  3,016,426  2,835,849  1,730,006  45,600,605 
Research and development  579,207   400,830   162,955   327,288   7,950,900  820,667  1,058,180  657,712  657,350  8,192,360 
Loss from sale of other assets  -   -   -   -   (314,381)  -   1,985   -   1,918   314,381 
  1,658,744   2,140,913   758,591   1,307,518   53,709,280   4,364,933   4,338,626   3,606,342   2,389,274   57,044,231 
                                        
Loss from continuing operations  (1,435,743)  (1,932,210)  (537,535)  (1,201,229)  (51,517,225) (4,121,792) (4,129,923) (3,584,257) (2,389,274) (54,832,036)
                                        
Other income (expense):                                        
Interest expense  (448,391)  (45,085)  (421,098)  (18,005)  (1,420,942) (634,747) (142,349) (213,649) (97,264) (1,607,298)
Interest income  2,293   -   (4,784)  -   2,293  2,293  -  7,077  -  2,293 
Other income  42,916   24,965   23,501   24,831   989,304  60,166  413  36,665  (14,408) 1,006,554 
Gain from sale of subsidiaries -  162,129  -  162,129  - 
Bad debt  (3,564)  -   (3,564)  -   (3,564)
                                        
Net loss from continuing operations  (1,838,925)  (1,952,330)  (939,916)  (1,194,403)  (51,946,570) (4,697,644) (4,109,730) (3,757,728) (2,338,817) (55,434,051)
                                        
Provision for income tax  -   -   -   -   -   -   -   -   -   - 
                                        
Net loss from continuing operations  (1,838,925)  (1,952,330)  (939,916)  (1,194,403)  (51,946,570)  (4,697,644)  (4,109,730)  (3,757,728)  (2,338,817)  (55,434,051)
                                        
Discontinued operations:                                        
Loss from discontinued operations  -   (430,067)  -   (119,908)  (1,320,313) -  (542,534) -  61,144  (1,320,313)
Gain on disposal of discontinued operations  -   -   -   -   90,069   -   -   -   -   90,069 
Net loss on discontinued operations  -   (430,067)  -   (119,908)  (1,230,244)  -   (542,534)  -   61,144   (1,230,244)
                                        
Loss from continued and discontinued operations  (1,838,925)  (2,382,397)  (939,916)  (1,314,311)  (53,176,814) (4,697,644) (4,652,264) (3,757,728) (2,277,673) (56,664,295)
                                        
Minority interest share of loss of consolidated subsidiaries from discontinued operations  -   2,377   -   2,377   19,200   -   2,377   -   -   19,200 
                                        
Net loss  (1,838,925)  (2,380,020)  (939,916)  (1,311,934)  (53,157,614) (4,697,644) (4,649,887) (3,757,728) (2,277,673) (56,645,095)
                                        
Other comprehensive income (loss):                                        
Foreign currency translation  1,511   -   (850)  -   7,141   2,473   5,579   3,323   7,270   8,103 
                                        
Net comprehensive loss $(1,837,414) $(2,380,020) $(940,766) $(1,311,934) $(53,150,473) $(4,695,171) $(4,644,308) $(3,754,405) $(2,270,403) $(56,636,992)
                                        
Net loss per share - basic and diluted - continuing operations $(0.08) $(0.29) $(0.05) $(0.15)     $(0.43) $(0.79) $(0.22) $(0.45)    
                                        
Weighted shares outstanding – basic and diluted - continuing operations  23,347,257   6,815,453   20,483,914   7,987,977     
Weighted shares outstanding - basic and diluted - continuing operations  10,912,562   5,222,390   17,383,302   5,238,069     
                                        
Net loss per share - basic and diluted - discontinued operations $-  $(0.06) $-  $(0.01)    
Net gain (loss) per share - basic and diluted - discontinued operations $-  $(0.10) $-  $0.01     
                                        
Weighted shares outstanding – basic and diluted - discontinued operations  23,347,257   6,815,453   23,347,257   15,713,385     
Weighted shares outstanding - basic and diluted - discontinued operations  10,912,562   5,222,390   17,383,302   5,238,069     

SEE NOTES TO UNAUDITED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

35

EV INNOVATIONS, INC.
A Development Stage Company

Consolidated Statement of Stockholder's Equity (Deficiency)

(UNAUDITED)
          Deficit          
        Deficit                    Deficit          
          Accumulated     Cumulative              Accumulated     Cumulative    
       Additional  During the     Other           Additional  During the     Other    
 Common stock     Paid-in  Development  Subscription  Comprehensive     Common stock     Paid-in  Development  Subscription  Comprehensive    
 Shares  Amount  Capital  Stage  Receivable  Income (loss)  Total  Shares  Amount  Capital  Stage  Receivable  Income (loss)  Total 
                                    ��     
Balance April 12, 2000  -  $-  $-  $-  $-  $-  $-   -  $-  $-  $-  $-  $-  $- 
                                                        
Stock issuances                                                        
Issuance of stock for cash  760,500   7,605   81,690   -   -   -  89,295   36,214   362   88,933   -   -   -  89,295 
Net loss for the period  -   -   -   (7,773)  -   -  (7,773)  -   -   -   (7,773)  -   -  (7,773)
                                                        
Balance January 31, 2001  760,500   7,605   81,690   (7,773)  -   -   81,522   36,214   362   88,933   (7,773)  -   -   81,522 
                                                        
Net loss for the year  -   -   -   (65,618)  -   -  (65,618)  -   -   -   (65,618)  -   -  (65,618)
                                                        
Balance January 31, 2002  760,500   7,605   81,690   (73,391)  -   -   15,904   36,214   362   88,933   (73,391)  -   -   15,904 
                                                        
Stock issuances                                                        
Non-cash issuance of common stock  3,600,000   (3,244)  403,249   -   -   -  400,005   171,429   (154)  400,159   -   -   -  400,005 
Value of rent donated by a related party  -   -   6,000   -   -   -  6,000   -   -   6,000   -   -   -  6,000 
Net loss for the year  -   -   -   (825,493)  -   -  (825,493)  -   -   -   (825,493)  -   -  (825,493)
                                                        
Balance January 31, 2003 4,360,500  4,361  490,939  (898,884) -  -  (403,584) 207,643  208  495,092  (898,884) -  -  (403,584)
                                                        
Stock issuances                                                        
Non-cash issuance of stock  1,012,500   1,013   (1,013)  -   -   -  -   48,214   48   (48)  -   -   -  - 
Employee stock based compensation  -   -   4,660,000   -   -   (4,660,000) -   -   -   4,660,000   -   -   (4,660,000) - 
Exercise of options, split adjusted  707,400   707   588,793   -   -   -  589,500   33,686   34   589,466   -   -   -  589,500 
Expenses paid with stock  2,250   2   8,748   -   -   -  8,750   107   -   8,750   -   -   -  8,750 
Amortization of deferred stock compensation  -   -   -   -   -   4,394,000  4,394,000   -   -   -   -   -   4,394,000  4,394,000 
Issuance of common stock for cash and note  42,533   42   199,958   -   (50,000)  -  150,000   2,025   2   199,998   -   (50,000)  -  150,000 
Net loss for the year  -   -   -   (5,261,224)  -   -  (5,261,224)  -   -   -   (5,261,224)  -   -  (5,261,224)
                                                        
Balance January 31, 2004 6,125,183  6,125  5,947,425  (6,160,108) (50,000) (266,000) (522,558) 291,675  292  5,953,258  (6,160,108) (50,000) (266,000) (522,558)
                                                        
Stock issuances                                                        
Return of non-cash issuance  (1,012,500)  (1,013)  1,013   -   -   -  -   (48,214)  (48)  48   -   -   -  - 
Stock redemption  (900,000)  (900)  900   -   -   -  -   (42,857)  (43)  43   -   -   -  - 
Employee stock based compensation  -   -   7,071,467   -   -   -  7,071,467   -   -   7,071,467   -   -   -  7,071,467 
Exercise of options  1,072,892   1,073   924,222   -   -   -  925,295   51,090   51   925,244   -   -   -  925,295 
Stock re-issuance  900,000   900   (900)  -   -   -  -   42,857   43   (43)  -   -   -  - 
Amortization of deferred stock compensation  -   -   -   -   -   266,000  266,000   -   -   -   -   -   266,000  266,000 
Basis of assets acquired less then purchase price  -   -   (54,656)  -   -   -  (54,656) -   -   (54,656)  -   -   -  (54,656)
Stock dividend  618,558   619   (619)  -   -   -  -   29,455   29   (29)  -   -   -  - 
Collection of receivable  -   -   -   -   50,000   -  50,000   -   -   -   -   50,000   -  50,000 
Net loss for the year  -   -   -   (12,586,255)  -   -  (12,586,255)  -   -   -   (12,586,255)  -   -  (12,586,255)
                                                        
Balance January 31, 2005 6,804,133  6,804  13,888,852  (18,746,363) -  -  (4,850,707) 324,006  324  13,895,332  (18,746,363) -  -  (4,850,707)
                                                        
Stock issuance                                                        
Exercise of options  9,500   10   60,790   -   -   -  60,800   452   -   60,800   -   -   -  60,800 
Sale of stock for cash  4,000   4   19,996   -   -   -  20,000   190   -   20,000   -   -   -  20,000 
Stock issued for related party advances  500,000   500   3,384,094   -   -   -  3,384,594   23,810  24   3,384,570   -   -   -  3,384,594 
Stock dividend  365,882   366   (366)  -   -   -  -   17,423   17   (17)  -   -   -  - 
Options issued for expenses  -   -   250,000   -   -   -  250,000   -   -   250,000   -   -   -  250,000 
Net loss for the period  -   -   -   (2,918,739)  -   -  (2,918,739)  -   -   -   (2,918,739)  -   -  (2,918,739)
                                                        
Balance July 31, 2005  7,683,515   7,684   17,603,366   (21,665,102)      -   (4,054,052)  365,882   365   17,610,685   (21,665,102)      -   (4,054,052)
                                                        
Stock issuances                                                        
Value of stock options issued  -   -   7,577,255   -   -   -  7,577,255   -   -   7,577,255   -   -   -  7,577,255 
Exercise of options  1,470,500   1,470   9,434,530   -   -   -  9,436,000   70,024   70   9,435,930   -   -   -  9,436,000 
Stock issued for debt  12,732,500   12,733   2,987,266   -   -   -  2,999,999   606,310   606   2,999,393   -   -   -  2,999,999 
Stock dividend  4,008,615   4,008   (4,008)  -   -   -  -   190,886   191   (191)  -   -   -  - 
Net loss for the year  -   -   -   (13,126,909)  -   -  (13,126,909)  -   -   -   (13,126,909)  -   -  (13,126,909)
                                                        
Balance July 31, 2006 25,895,130  25,895  37,598,409  (34,792,011) -  -  2,832,293  1,233,101  1,232  37,623,072  (34,792,011) -  -  2,832,293 
                                                        
Stock issuances                                                        
Value of stock options issued (valued at $1.05 per share) -  -  2,103,600  -  -  -  2,103,600  -  -  2,103,600  -  -  -  2,103,600 
Exercise of options (valued at $3.55 per share) 1,206,000  1,206  4,280,094  -  -  -  4,281,300  57,429  57  4,281,243  -  -  -  4,281,300 
Value of stock issued for services (valued at $0.8387 per share) 3,100,000  3,100  2,596,900  -  -  -  2,600,000 
Stock issued for debt -  -  -  -      -  - 
Stock dividends 9,299,381  9,300  (9,300) -  -  -  -  442,828  443  (443) -  -  -  - 
Net loss for the year -  -  -  (10,619,757) -  -  (10,619,757) -  -  -  (10,619,757) -  -  (10,619,757)
                                                        
Foreign currency transactions -  -  -  -  -  (7,860) (7,860) -  -  -  -  -  (7,860) (7,860)
                                                        
Balance July 31, 2007 39,500,511  39,501  46,569,703  (45,411,768) -  (7,860) 1,189,576  1,880,977  1,880  46,607,324  (45,411,768) -  (7,860) 1,189,576 
                                                        
Stock issuances                                                        
Value of stock options issued (valued at $1.8933 per share) -      804,652              804,652  -      804,652              804,652 
Common stock issued as collateral on loan pre-reverse stock split 10,000,000  10,000  (10,000) -  -  -  - 
Reverse stock split (42,428,598) (42,429) 42,429  -  -  -  - 
Common stock issued as collateral on loan post-reverse stock split 16,071,427  16,071  (16,071) -  -  -  - 
Exercise of options post-reverse stock split (valued at $1.96 per share) 203,917  204  399,796  -  -  -  400,000 
Common stock issued as collateral on loan 476,190  476  (476) -  -  -  - 
Reverse stock split adjustment 138  -  -  -  -  -  - 
Common stock issued as collateral on loan 5,357,142  5,357  (5,357) -  -  -  - 
Exercise of options (valued at $1.96 per share) 67,972  68  399,932  -  -  -  400,000 
Net loss for the year -  -  -  (6,535,683) -  -  (6,535,683) -  -  -  (6,535,683) -  -  (6,535,683)
                                                        
Foreign currency transactions -  -  -  -  -  13,490  13,490  -  -  -  -  -  13,490  13,490 
                                                        
Balance July 31, 2008 23,347,257  23,347  47,790,509  (51,947,451) -  5,630  (4,127,965) 7,782,419  7,781  47,806,075  (51,947,451) -  5,630  (4,127,965)
                                                        
Stock issuances                            
Value of stock options issued (valued at $0.90 per share)     -  1,746,900  -  -  -  1,746,900 
Exercise of options (valued at $0.90 per share) 1,167  1  (1) -  -  -  - 
Reverse stock split adjustment 327  2  (2) -  -  -  - 
Common stock issued as collateral on loan 11,666,664  11,667  (11,667) -  -  -  - 
Exercise of options (valued at $0.90 per share) 1,018,014  1,018  912,332  -  -  -  913,350 
Net (loss) for the period -  -  -  (899,009) -  -  (899,009) -  -  -  (4,697,644) -  -  (4,697,644)
                                                        
Foreign currency transactions -  -  -  -  -  (17,600) (17,600) -  -  -  -  -  (18,169) (18,169)
                                                        
Balance October 31, 2008 23,347,257  23,347  47,790,509  (52,846,460) -  (11,970) (5,044,574)
                            
Net (loss) for the period -  -  -  (939,916) -  -  (939,916)
                            
Foreign currency transactions -  -  -  -  -  (442) (442)
                            
Balance January 31, 2009  23,347,257  $23,347  $47,790,509  $(53,786,376) $-  $(12,412) $(5,984,932)
Balance April 30, 2009  20,468,591  $20,469  $50,453,637  $(56,645,095) $-  $(12,539) $(6,183,528)
 
SEE NOTES TO UNAUDITED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

46


EV INNOVATIONS, INC.
A Development Stage Company

Consolidated Statements of Cash Flows
(UNAUDITED)

       Inception        Inception 
       (April 12,, 2000)        (April 12, 2000) 
 SIX MONTHS ENDED  through  NINE MONTHS ENDED  through 
 January 31,  January 31,  April 30,  April 30, 
 2009  2008  2009  2009  2008  2009 
                  
Cash provided (used in) Operating Activities:                  
Net (loss) $(1,838,925) $(2,380,020) $(53,786,376) $(4,697,644) $(4,649,887) $(56,645,095)
Adjustments to reconcile net (loss) to cash                        
Depreciation and amortization  43,176   58,659   863,142  69,534  90,674  889,500 
Bad debt expense  -   9,678   186,582  -  9,678  186,582 
Gain/loss of sale of other assets  -   -   315,169  -  -  315,169 
Minority interest in income  -   (2,377)  -  -  (2,377) - 
Non cash stock-based compensation  -   -   24,550,293  1,746,900  804,652  26,297,193 
(Increase) in accounts receivable  (48,489)  (22,485)  (248,672) (34,709) (82,699) (234,892)
(Increase) in inventories  242   (34,229)  (287,068) (12,103) 220,845  (299,413)
(Increase) in employee advances  (5,072)  -   (5,072) (2,114) -  (2,114)
decrease in prepaid expenses and other assets  47,463   57,275   (21,656)
(Increase) decrease in prepaid expenses and other assets 60,017  60,223  (9,102)
Loss on sale of property and equipment  -   3,903   -  -  (1,918) - 
(Increase) in other assets  -   (19,686)  (50,000)
Decrease in other assets 50,000  (5,061) - 
Increase (decrease) in accounts payable and accrued expenses  510,373   (78,239)  840,556  916,087  (154,630) 1,246,270 
Increase in customer deposits  225,233   35,000   374,393  321,732  65,800  470,892 
(Increase) decrease in deferred revenue  -   (2,990)  -  -  (2,990) - 
(Gain) on sale of subsidiary  -   -   (90,069) -  (162,129) (90,069)
Loss from discontinued operations  -   -   1,320,313   -   -   1,320,313 
Cash used in operating activities  (1,065,999)  (2,375,511)  (26,038,465)  (1,582,300)  (3,809,819)  (26,554,766)
                        
Cash provided by (used in) Investing Activities:                        
Increase in other assets  -   -   (1,452,353) -  41,224  (1,452,353)
Proceeds from sale of other assets  -   -   1,136,372  -  -  1,136,372 
Proceeds from sale of subsidiary  -   -   215,000  -  215,000  215,000 
Purchase of property and equipment  (105,207)  (88,350)  (1,244,039) (120,270) (20,469) (1,259,102)
Proceeds from sale of property and equipment  -   1,070   108,318  -  29,005  108,318 
Investment in subsidiaries  -   -   (688,220) -  (52,871) (688,220)
Increase in deferred patent costs  (1,139)  -   (21,042)  (1,139)  (21,987)  (21,042)
Cash used in investing activities  (106,346)  (87,280)  (1,945,964)
Cash (used in) provided by investing activities  (121,409)  189,902   (1,961,027)
                        
Cash provided (used in) by Financing Activities:                        
Proceeds from the exercise of stock options  -   -   15,692,895  -  400,000  15,692,895 
Collection of stock receivable  -   -   50,000  -  -  50,000 
Proceeds from the issuance of debt  486,428   3,596,611   9,601,141  610,951  4,421,662  9,725,664 
Advances from related parties  1,088,967   2,712,008   13,758,774  1,722,304  3,539,995  14,392,111 
Payments of related party advances  (442,401)  (2,755,478)  (9,914,684) (683,006) (3,666,162) (10,155,289)
Payments of debt  (15,414)  (1,048,784)  (1,422,297) (23,270) (1,071,601) (1,430,153)
Proceeds from the issuance of common stock  -   -   259,300   -   -   259,300 
Cash provided by financing activities  1,117,580   2,504,357   28,025,129   1,626,979   3,623,894   28,534,528 
                        
Effect of exchange rate changes on cash and cash equivalents  (18,042)  2,281   (12,412)  (18,169)  7,860   (12,539)
                        
Net increase (decrease) in cash  (72,807)  43,847   28,288  (94,899) 11,837  6,196 
                        
Cash at beginning of period  101,095   3,775   -   101,095   3,775   - 
                        
Cash at end of period $28,288  $47,622  $28,288  $6,196  $15,612  $6,196 
                        
Supplemental information:                        
Cash paid during the year for:                        
Interest paid $54,389  $45,006      $54,389  $45,006     
Income taxes paid $-  $-      $-  $-     
Non - cash financing activities:                        
Fixed assets acquired by the issuance of debt $-  $-  $1,300,000  $-  $-  $1,300,000 
Shares issued for related party advances $-  $-  $3,000,000  $-  $-  $3,000,000 
Accrued expenses charged to long term debt $28,850  $-  $28,850  $28,850  $-  $28,850 

SEE NOTES TO UNAUDITED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

57

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Financial statement presentation

The financial statements have been prepared in accordance with Securities Exchange Commission requirements for interim financial statements.  Therefore, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on form 10-K for the year ended July 31, 2008 as filed with the Securities Exchange Commission.

The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year.  In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim period a fair statement of such operations.  All such adjustments are of a normal recurring nature.

History and Nature of Business
EV Innovations, Inc. (formerly Hybrid Technologies, Inc.) was incorporated under the laws of the State of Nevada on April 12, 2000. EV Innovations, Inc.'s (the “Company”) original business was the exploration and development of mineral interests. The Company abandoned these interests in 2003.

The Company is currently pursuing the development and marketing of electric powered vehicles and products based on the advanced lithium battery technology it has developed. At January 31,April 30, 2009 the Company deems itself a development stage company as planned principal operations are minimal in its primary line of business.

On April 16, 2008, the Company sold their controlling interest of approximately 69% of the outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc., “SPI”). Prior to April 16, 2008, SPI was a related party who provided telecommunication services to business and residential customers utilizing VOIP technology and currently is researching and developing rechargeable lithium ion batteries.

Effective April 15, 2008, the Company entered into a license agreement with SPI providing for their license to SPI of their patent applications and technologies for rechargeable lithium ion batteries for electric vehicles and other applications (“licensed products”). Under the license agreement, the Company has the right to purchase their requirements of lithium ion batteries from SPI, and their requirements of lithium ion batteries shall be supplied by SPI in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of SPI. The Company’s cost for lithium ion batteries purchased from SPI shall be SPI’s actual manufacturing costs for such batteries for the fiscal quarter of SPI in which the Company’s purchase takes place.

SPI has agreed to invest a minimum of $1,500,000 in each of the next two years in development of the technology for the Licensed Products. To date, investments have been made in the amount of $35,608.$180,734. If the SPI does not make the required investments, it will be in default under the license agreement; the Company would have the right to terminate the license agreement.

8

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
The Company’s financial statements for the sixnine months ended January 31,April 30, 2009 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company had $223,001$243,141 of revenue for the sixnine months ending January 31,April 30, 2009, and as of January 31,April 30, 2009, there was a stockholders’ deficiency of approximately $6$6.2 million. Management recognized that the Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.

The Company’s business is subject to most of the risks inherent in the establishment of a new business enterprise. The likelihood of the Company’s success must be considered in light of expenses, difficulties, delays and unanticipated challenges encountered in connection with the formation of a new business, raising operating and development capital, and the marketing of new products.  There is no assurance the Company will ultimately achieve a profitable level of operations.
6

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The Company presently does not have sufficient liquid assets to finance its anticipated funding needs and obligations.  The Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and achieve a level of sales adequate to support its cost structure. Management is actively seeking additional capital to ensure the continuation of its current activities and complete its proposed activities. However, there is no assurance that additional capital will be obtained. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties should the Company be unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation
The consolidated financial statements included the accounts and records of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company does not have any special purpose entities.

Where the Company’s ownership is less than 100 percent, the minority ownership interests are reported in the Consolidated Balance Sheets as a liability.  The Company record minority interest expense which reflects the portion of the earnings (loss) of majority owned operations which are applicable to the minority interest partners. The minority ownership of the Company’s earnings is classified as “Minority interest share of (earnings) loss of consolidated subsidiaries” from discontinued operations in the Consolidated Statements of Operations.

The following is a listing of the Company's subsidiaries and its ownership interests:

Global Electric, Corp.  67.57%
R Electric Car, Co.  67.57%
Solium Power, Corp.  67.57%
Hybrid Technologies USA Distributing Inc.  100.00%
Hybrid Electric Vehicles India Pvt. Ltd.  100.00%

Estimates
The preparation of financial statements prepared in accordance with the accounting standards generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

9

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Financial instruments
The fair value of accounts receivables, accounts payable and accrued expenses and advances from related parties approximates fair value based on their short maturities. The fair value of notes payable approximate fair value based the value of other notes having the same or similar terms, interest rates and collateral.

Accounts receivables
The Company provides credit to customers in the normal course of business. An allowance for accounts receivable is estimated by management based in part on the aging of receivables and historical transactions. Periodically management reviews accounts receivable for accounts that appear to be uncollectible and writes off these uncollectible balances against the allowance accordingly.

Inventories
Inventories are stated at the lower of cost or market. Cost is based on the specific identification method.

7

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Property and equipment
Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment are accounted for by accelerated methods over the following estimated useful lives:

 Lives Methods
Building improvements 39 years Straight line
Furniture and fixtures 10 years Accelerated
Software 3-5 years Straight line
Computers  5 years  Straight line

Deferred patent costs
The Company capitalizes costs directly incurred in pursuing patent applications as deferred patent costs. When such applications result in an issued patent, the related costs are amortized over the remaining legal life of the patents, which is assumed to be 17 years, using the straight-line method. On a quarterly basis, the Company reviews the issued patents and pending patent applications and if the Company determines to abandon a patent application, or an issued patent no longer has economic value, the unamortized balance in deferred patent costs relating to that patent is immediately expensed. As of January 31,April 30, 2009 there were only pending patent applications.

Stock based compensation
The Company issues stock options to employees and other certain service providers under stockholder approved stock option programs that provide the right to purchase the Company’s stock pursuant to stock purchase programs. The Company also issued common stock for services performed.  The fair value of the stock options issued is estimated on the date of grant using the Black Scholes Option Pricing Model.  The fair value of common stock issued for services is estimated on the date of issuance based on the value of the stock issued or the consideration received.

10

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Revenue recognition
The Company recognizes revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" and other relevant accounting literature.  Revenue is recognized when the product has been delivered and title and risk of loss have passed to the customer, collection of the resulting receivable is deemed reasonably assured by management, persuasive evidence of an arrangement exists and the sale price is fixed and determinable.

Shipping and handling
Shipping and handling costs related to services and product sales are expensed as incurred.

Advertising
Advertising costs are expensed as incurred and are included in general and administrative expenses. Total advertising expenditures for the sixnine months ended January 31,April 30, 2009 and 2008 and inception (August 12, 2000) to January 31,April 30, 2009 date amounted to approximately $179,000, $76,170$397,000, $204,200 and $1,957,000,$2,354,000, respectively. On January 15, 2009, Fenner, Gray and Associates were hired to assist with the preparation and submission of a multi-million dollar loan application being issued through the Department of Energy. The loan award is earmarked to create an additional 500 jobs and purchase a 400,000 square foot manufacturing and production facility. The facility will produce EVI’s original concept of all electric powered cars.

Research and development
The Company is currently a research and development (“R&D”) stage company and therefore the Board of Directors has not set a budget for R&D. However, all projects and purchases must be approved before being started or purchased. As of January 31,April 30, 2009, there have been expenses put toward research and development. For the sixnine months ending January 31,April 30, 2009, salaries amounted to approximately $518,000$689,000 in R&D, parts and supplies was approximately $41,000,$30,000, shipping charges, battery management systems and other R&D were approximately $7,000, $11,000$12,000 and $2,000, respectively.

8
EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Concentration of risk
The Company maintains cash deposit accounts and certificates of deposits which at times may exceed federally insured limits. These accounts have not experienced any losses and the Company believes it is not exposed to any significant credit risk related to cash.

Income taxes
The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.

The principal item giving rise to deferred taxes is the net operating loss carry forward.

Effective August 1, 2007, uncertain tax positions are accounted for in accordance with FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes."

Long-lived assets
The Company accounts for long-lived assets in accordance with Statement of Financial Accounting Standard No. 144 (SFAS 144) "Accounting for Long-Lived Assets". The carrying value of long-lived assets is reviewed on a regular basis for the existence of facts and circumstances that may suggest impairment. The Company recognizes impairment when the sum of undiscounted future cash flows is less than the carrying amount of the asset. The write down of the asset is charged to the period in which the impairment occurs.

11

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Foreign currency translation
The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments in future periods will be recorded in Cumulative Other Comprehensive Income. The translation gains or losses were not material for the sixnine months ended January 31,April 30, 2009 and 2008.year ended July 31, 2008 were approximately $18,000 loss and $13,000 gain, respectively.

Comprehensive loss
The Company reports comprehensive loss in accordance with the requirements of SFAS No. 130. For the yearsnine months ended July 31,April 30, 2009 and 2008, and 2007, the difference between net loss and comprehensive loss is foreign currency translation.

Loss per Share
Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period.  Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified period. All potentially dilutive securities, which include options and warrants convertible into 1,019,0001,028,000 and 1,219,0001,206,000 common shares at January 31,April 30, 2009 and 2008, respectively, have been excluded from the computations, as their effect is anti-dilutive.

Discontinued Operations
In April 2008, the Company completed the sale of SPI. The operations of SPI were accounted for as discontinued operations in the consolidated financial statements for the years presented herein.  The divestiture resulted in a loss of $0 and $430,067,$542,534, respectively, for the sixnine months ended January 31,April 30, 2009, and 2008, and $1,230,244$1,320,313 from inception (August 12, 2000) through January 31,April 30, 2009.
9

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Summarized combined statement of loss for discontinued operations is as follows:

 SIX MONTHS ENDED  NINE MONTHS ENDED 
 January 31,  April 30, 
 2009  2008  2009  2008 
Net sales $-  $430,322  $-  $600,303 
Loss before income tax -  (860,389)  -   (1,142,837)
Provision for income taxes  -   -   -   - 
Loss from operations - net tax -  (430,067)  -   (542,534)
Gain on sale of discontinued operations -  -   -   - 
Provision for income taxes  -   -   -   - 
Loss from discontinued operations - net of tax $-  $(430,067) $-  $(542,534)

Reclassification
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. These reclassifications have had no impact on the net. The reclassification consisted of other assets being reclassified as marketable securities. The Company reclassified certain continuing operations to discontinued operations for the sixnine months ended January 31,April 30, 2008 in the Company’s Consolidated Statements of Operations.

12

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Recently issued accounting pronouncements
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No. 160”).  SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary.  It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the Consolidated Financial Statements.  SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest on the face of the consolidated statement of income.  Under SFAS No. 160, the accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation must be accounted for as equity transactions for the difference between the parent’s carrying value and the cash exchanged in the transaction.  In addition, SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated (except in the case of a spin-off), and requires expanded disclosure in the Consolidated Financial Statements that clearly identify and distinguish between the interests of the parent’s ownership interest and the interests of the noncontrolling owners of a subsidiary.  This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.  The Company will adopt SFAS No. 160 on JanuaryAugust 1, 2009, as required, and is currently evaluating thedoes not believe they will have a significant impact of such adoption on its financial statements.

In February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive accounting pronouncements that address leasing transactions from the requirements of SFAS No. 157, with the exception of fair value measurements of assets and liabilities recorded as a result of a lease transaction but measured pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS 157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of SFAS No. 157 on January 1, 2008. The Company will provide the additional disclosures required relating to the fair value measurement of nonfinancial assets and nonfinancial liabilities when it fully implementsliabilities. The Company will adopt SFAS No. 157 on JanuaryAugust 1, 2009, as required, and does not believe theythe adoption will have a significantmaterial impact on its financial statements.
10

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No. 161”).  The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows.  It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  The Company does not believe that SFAS No. 161 will have a material impact on its financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States.  This Statement is effective sixty days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.”  The Company is currently evaluating the potential impact, if any, of the adoption ofwill adapt SFAS No. 162 on August 1, 2009 and does not believe the adoption will have a material impact on its financial statements.3statements.

13

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Property and equipment

Property and equipment consist of:

 January 31,  July 31,  April 30,  July 31, 
 2009  2008  2009  2008 
Building and improvements $1,272,352  $1,272,352  $1,272,352  $1,272,352 
Furniture and fixtures  25,278   19,548   26,192   19,548 
Office equipment  139,858   137,030   140,539   137,030 
Machinery and equipment  107,445   19,026   113,771   19,026 
Vehicles  60,979   60,979   60,979   60,979 
Software costs  20,104   11,874   27,038   11,874 
Land  700,000   700,000   700,000   700,000 
  2,326,016   2,220,809   2,340,871   2,220,809 
Less accumulated depreciation  (249,405)  (206,229)  (275,555)  (206,229)
 $2,076,611  $2,014,580  $ 2,065,316  $2,014,580 

Depreciation expense for the sixnine months ended January 31,April 30, 2009 and 2008 was $43,176$69,534 and $58,659,$90,674, respectively.

Note 3. Inventories

Inventories consist of the following:

 January 31,  July 31,  April 30,  July 31, 
 2009  2008  2009  2008 
Raw materials $131,002  $134,456  $17,288  $134,456 
Work in progress  88,159   117,124   214,218   117,124 
Finished goods  67,907   35,730   67,907   35,730 
 $287,068  $287,310  $ 299,413  $287,310 

Raw materials, work in progress and finished goods for the six months ended January 31,as of April 30, 2009, and year ended July 31, 2008, is related to the Company’s planned sales of electric powered vehicles.

Note 4. Other Assets

On June 28, 2006, the Company executed two $50,000 notes, one bearing interest at 6% and the other non-interest bearing note, to a contractor, as compensation for monies paid by the Company to the contractor for the contractor to file for a patent, and $50,000 for inventory that was either missing or damaged. The patent that the contractor received with the money of EVI was assigned to EVI as collateral until both notes and interest were paid in full. On August 19, 2008, the non-interest bearing note in the amount of $50,000 was repaid. On February 19, 2009, the interest bearing note in the amount of $50,000, plus interest of $8,319, was repaid and the patent that was being held as collateral was returned. The interest bearing note is included in other current assets on the Company's balance sheet at April 30, 2009 and July 31, 2008.

14

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 4.5. Advances from related parties and related party transactions

During the sixnine months ended January 31,April 30, 2009 and 2008, the Company received and repaid additional advances from Del Mar Ventures Corp, a company owned by Aarif Jamani (a Company stockholder) of $0 in 2009, and $0$9,940 and $9,940,$10,000, respectively inas of July 31, 2008. As of January 31,April 30, 2009 and July 31, 2008, the balance was $0 and $10,000, respectively.

11
EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS$0.

The Company received and repaid additional advances from SSRI (owned by a Company stockholder) for the sixnine months ended January 31,April 30, 2009 and year ended July 31, 2008 in amounts of $1,037,967$1,722,304 and $442,401,$1,600,234, respectively for 2009 and $2,672,813$3,732,000 and $2,733,088,$3,592,000, respectively for 2008. As of JanuaryApril 30, 2009 and July 31, 20092008, the amount due to SSRI was $633,566. And as of January 31, 2008 the amount due from SSRI was $60,275, respectively.

The Company did not receive$109,070 and repay any additional advances from Salim Rana (a Company Stockholder) for the six months ended January 31, 2009 and 2008. As of January 31, 2009 and 2008, the amount due to Salim Rana was $0 and $82,866,$38,000, respectively.

The Company received and repaid additional advances from A & S Holding (owned by a previous Company president) for the sixnine months ended January 31,April 30, 2009 and year end July 31, 2008 in amount of $0 for 2009 and $10,876$11,000 and $0, respectively for 2008.  As of January 31,April 30, 2009 and July 31, 2008, the amount due to the Company was $0.

The Company received and repaid additional advances from Greg Navone (Director of the Company) for the sixnine months ended January 31,April 30, 2009 and year ended July 31, 2008 in amount of $51,000 and $0, respectively for 2009 and $115,000$150,000 and $117,700,$0, respectively for 2008. As of April 30, 2009 and July 31, 2008, and 2007, the amount due to the Company was $51,000 and $2,300,$0, respectively.

Due from related parties and advances from related parties are reported as current assets or liabilities. These advances are not subject to written agreements and have no specific repayment terms but are deemed due on demand and are not interest bearing notes except for the Greg Navone note.

Note 5.6. Long-term debt

Long-term debt consists of:

 
1215
 

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 January 31,  July 31,  April 30,  July 31, 
 2009  2008  2009  2008 
10.875% note payable to Bayview Loan Servicing, LLC, payable in monthly installments of approximately $11,388 including interest, collateralized by real property due in full on or before December 2022 (1)  970,266   984,204   962,410   984,204 
                
10% note payable to Wyndom Capital Investments, Inc., payable in October 2010 collateralized by 10,000,000 shares of the Company's common stock (2)  4,000,000   3,971,150   4,000,000   3,971,150 
                
10% note payable to Crystal Capital Ventures, payable in May 2011collateralized by 7,500,000 shares of the Company's common stock (3)  1,697,428   1,211,000 
10% note payable to Crystal Capital Ventures, payable in May 2011 collateralized by 7,500,000 shares of the Company's common stock (3)  2,331,420   1,211,000 
                
15.8% note payable to Allegiance Direct Bank, payable in monthly installments of approximately $525, due in full on October 2008 (4)  -   1,476   -   1,476 
  6,667,694   6,167,830   7,293,830   6,167,830 
Less current portion  (31,572)  (32,422)  (32,538)  (32,422)
 $6,636,122  $6,135,408  $7,261,292  $6,135,408 

Principal maturities on continuing operations are as follows as of January 31, 2009:for the years ended July 31:

2009 $31,572  $7,779 
2010 4,036,762   4,033,822 
2011 1,738,394   2,370,227 
2012 45,650   43,245 
2013 50,870   48,189 
Thereafter  764,446   790,568 
 $6,667,694  $7,293,830 

(1) In November 2007, the Company refinanced a loan on a building. The Company paid the remainder of the loan to Richard Howard, with $50,000 in cash and $1,000,000 from the new loan proceeds. The new loan with Bayview Loan Servicing, LLC is $1,000,000. The loan has an initial interest rate at 10.875% per annum with a monthly payment of $11,388, including interest. The loan is due on December 1, 2022. After the first 24 months, the interest rate adjusts to Prime plus 4.875%. Interest rate changes are limited to 2% increase or decrease in any annual adjustments. Interest expense for the sixnine months ended January 31,April 30, 2009 and 2008 for Bayview Loan Servicing, LLC is approximately $54,400$80,700 and $19,900,$46,900, respectively, and $118,400$144,600 from inception (August 12, 2000) through January 31,April 30, 2009.

16

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(2) In October 2007, the Company entered into a loan agreement with Wyndom Capital Investments, Inc. (“Wyndom”). The Company issued 10,000,000 pre-reverse stock split shares (computes to 1,428,573 post-reverse stock split shares) of outstanding stock as collateral for the above note and 8,571,427 post reverse stock split shares of outstanding stock as collateral to total 10,000,000 post reverse stock split shares. The agreement provides loans of up to $4,000,000 with interest payable monthly at a rate of 10% per annum and due in full in October of 2010. Loans under the agreement are secured by the Company’s shares of common stock at a rate of two and one half shares to each dollar of principal. As of January 31,April 30, 2009, the Company has borrowed $4,000,000 under the loan agreement. Interest expense for the sixnine months ended January 31,April 30, 2009 and 2008 for Wyndom is approximately $306,000$386,000 and $25,000,$95,000, and $461,000$570,000 from inception (August 12, 2000) through January 31,April 30, 2009. If Wyndom were to declare default and take possession of the collateral, the number of shares is sufficient to make Wyndom the controlling shareholder.

13

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(3) On May 5, 2008, the Company entered into a loan agreement with Crystal Capital Ventures Inc. (“Crystal Capital”). The loan agreement provides for loans to the Company of up to $3,000,000, with a minimum initial loan of $500,000 taking place on May 19, 2008. The notes bear interest payable monthly in arrears at the rate of 10% per annum; and mature and are due and payable May 4, 2011. The loans under the loan agreement are secured by shares of the Company’s common stock held by Crystal Capital. The Company is required to issue shares as collateral at the rate of two and one half shares of the Company’s common stock for each dollar principal amount of the loan advanced to the Company.  Following disbursement of the first $1,000,000 of funds pursuant to the loan agreement, on May 27, 2008, the Company issued 7,500,000 shares of common stock as collateral to Crystal Capital.

As of January 31,April 30, 2009, the Company has borrowed $1,697,428$2,331,420 under the loan agreement. Interest expense for the sixnine months ended January 31,April 30, 2009 and 2008 for Crystal Capital is approximately $88,000$139,000 and $0, respectively, and $88,000$150,000 from inception (August 12, 2000) through January 31,April 30, 2009.

(4) On January 31, 20082009 the Company financed a workman’s compensation policy with Allegiance Direct Bank for the period January 31, 20082009 to January 31, 20092010 for $6,396.  The Company was required to make a down payment of approximately $1,966 in January 20082009 and monthly payments including interest of 15.8%. Interest expense for the sixnine months ended January 31,April 30, 2009 and 2008 Allegiance Direct Bank is approximately $0 and $195$0 from inception (August 12, 2000) through January 31,April 30, 2009.

Note 6.7. Stockholders’ equity

In January 2008, the Company’s shareholders approved a 1:7 reverse stock split.  Except for the presentation of common shares authorized and issued on the consolidated balance sheet and shares presented in the consolidated statement of stockholders’ equity (deficit), all shares and par share information has been revised to give retroactive effect to the reverse stock split.  Authorized shares were 50,000,000 and were increased to 250,000,000 on December 24, 2007 (computes to 35,714,285 post-reverse stock split authorized shares).2007. Wyndom Capital Investments, Inc. currently holdshold 10,000,000 post-reverse stock split shares as collateral for a loan of up to $4,000,000 and Crystal Capital Ventures Inc. holds 7,500,000 post reverse stock split shares as collateral for a loan up to $3,000,000 as discussed in Note 5.

17

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
On January 15, 2009, the Company’s shareholders approved a 1:3 reverse stock split for the outstanding shares but it did not take effect until February 19, 2009. Common stock, authorized shares was 35,714,285 and was increased to 50,000,000 on February 19, 2009. On February 20, 2009, the Company issued Wyndom Capital Investments, Inc. an additional 6,666,665 shares so they again hold 10,000,000 post reverse stock split shares as collateral for a loan of up to $4,000,000 as discussed in Note 6. Crystal Capital Ventures Inc. was issued 4,999,999 shares so they again hold 7,500,000 post reverse stock split shares as of February 20, 2009, as collateral for a loan of up to $3,000,000 as discussed in Note 6.

February 24, 2009, under the 2006 stock option plan the remainder of the shares were granted and exercised, this closed that plan. The Company has registered the 2009 stock option plan with the SEC for 3,000,000 shares, and of those 2,042,857 shares have been granted at par value $0.001 per share and a purchase share price of $0.90 per share.

Note 7.8. Segment information

FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by management. The Company is organized by line of business and geographical area. The Company has two businesses, telecommunication services and the development and sale of electric powered vehicles.

The following is financial information relating to the Company’s business segments:

14

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 NINE MONTHS ENDED 
 
SIX MONTHS ENDED
Janaury 31,
  April 30, 
 2009  2008  2009  2008 
Revenues from external customers:            
United States $223,001  $208,703  $243,141  $208,703 
Hong Kong -  -   -   - 
India  -   -   -   - 
Total revenues from continuing operations $223,001  $208,703  $243,141  $208,703 
        
Loss from continuing operations:                
United States (1,392,058) (1,931,960)  (4,636,954)  (4,129,673)
Hong Kong (1) (250)  (1)  (250)
India  (43,684)  -   (60,689)  - 
Total loss from continuing operations $(1,435,743) $(1,932,210) $(4,697,644) $(4,129,923)

Note 8.9. Going concern

The Company's financial statements are prepared based on the going concern principle. That principle anticipates the realization of assets and payments of liabilities through the ordinary course of business.  No adjustments have been made to reduce the value of any assets or record additional liabilities, if any, if the Company were to cease to exist. The Company has incurred significant operating losses since inception. These operating losses have been funded by the issuance of capital, loans and advances. There are no guarantees that the Company will continue to be able to raise the funds necessary. Additionally, the lack of capital may limit the Company's ability to establish a viable business.

Note 9. Subsequent Events

On February 1, 2009, the Company entered into a six month space lease agreement with SkinzWraps of Dallas, Texas. The agreement is good thru July 31, 2009 and rent shall be paid to the Company of $700 per month or graphics work in the equivalent.

On June 28, 2006, the Company executed two $50,000 notes, one bearing interest at 6% and the other non-interest bearing note, to a contractor, as compensation for monies paid by the Company to the contractor for the contractor to file for a patent, and $50,000 for inventory that was either missing or damaged. The patent that the contractor received with the money of EVI was assigned to EVI as collateral until both notes and interest were paid in full. On August 19, 2008, the non-interest bearing note in the amount of $50,000 was repaid. On February 19, 2009, the interest bearing note in the amount of $50,000, plus interest of $8,319, was repaid and the patent that was being held as collateral was returned. The interest bearing note is included in other current assets on the Company's balance sheet at January 31, 2009.

On January 15, 2009, the Company’s shareholders approved a 1:3 reverse stock split for the outstanding shares but it did not take effect until February 19, 2009. Common stock, authorized shares was 35,714,285 and was increased to 50,000,000 on February 19, 2009. On February 20, 2009, the Company issued Wyndom Capital Investments, Inc. an additional 6,666,665 shares so they hold 10,000,000 post reverse stock split shares as collateral for a loan of up to $4,000,000 as discussed in Note 5. Crystal Capital Ventures Inc. was issued 4,999,999 shares so they hold 7,500,000 post reverse stock split shares as of February 20, 2009, as collateral for a loan of up to $3,000,000 as discussed in Note 5.

February 24, 2009, under the 2006 stock option plan the remainder of the shares were granted and exercised, this closed that plan. The Company has registered the 2009 stock option plan with the SEC for 3,000,000 shares, and of those 900,000 shares have been granted at par value $0.001 per share and a purchase share price of $0.90 per share.

 
1518
 

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Commitments and contingencies

Surety bond
EVI has applied to NC DMV for a manufacturing license. This application required a surety bond of $50,000 for three years which the Company acquired from Kaercher Campbell & Associates. EVI was licensed as a motor vehicle dealer to engage in the business of selling motor vehicles on March 9, 2009, until March 31, 2010, by the State of North Carolina DMV.

Note 11. Share based compensation

The Company records compensation expense in its consolidated statement of operations related to employee stock-based options and awards in accordance with SFAS No. 123(R) “Share-Based Payment.”

The Company recognizes the cost of all employee stock options on a straight-line attribution basis over their respective contractual terms, net of estimated forfeitures. The Company has selected the modified prospective method of transition.

The Company also issues shares of common stock to non-employees as stock-based compensation. The company accounts for the services using the fair market value of the services rendered. For the nine months ended April 30, 2009 and 2008, the Company issued 2,042,857 and 200,000 shares, respectively, and recorded compensation expense of $1,746,900 and $804,652, respectively, in conjunction with the issuance of these shares.

Stock Option Plan

As of April 30, 2009, 957,143 shares of common stock remain available for issuance under the stock option plan.

A summary of the option activity under the Company’s stock option plan as of July 31, 2008 and changes during the nine months ended April 30, 2009, is presented below.

Options Shares  
Weighted
Average
Exercise Share
Price
 
Weighted
Average
Remaining
Contractual
 
Aggregate
Intrinsic
Value
 
Outstanding at August 1, 2008  114,833  $2.00     
Options granted  2,042,857  $0.90     
Options exercised  (1,014,833) $0.90     
Options cancelled/expired  -         
             
Outstanding at April 30, 2009  1,142,857  $0.90 4.89 years $1 ,222,857 
              
Exercisable at April 30, 2009  1,142,857  $0.90      

 
1619
 

EV INNOVATIONS, INC.
A Development Stage Company

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Stock compensation expense applicable to stock options for the nine months ended April 30, 2009 was approximately $1.7 million. The aggregate intrinsic value of options outstanding as of April 30, 2009 was $1,222,857.

1,142,857 of the Company’s outstanding options were exercisable as of April 30, 2009.
20

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this section.

RESULTS OF OPERATION

During the period since inception on April 12, 2000 to January 31,April 30, 2009, we have incurred net losses aggregating $53,157,624.$56,645,095. At January 31,April 30, 2009, we had liabilities of $8,538,359$8,636,821 and a working capital deficiency of $1,498,063.$1,010,094. As of January 31,April 30, 2009, we had $28,288$6,196 cash on hand.

SIXNINE MONTHS ENDED JANUARY 31,APRIL, 2009 and 2008

We had sales of $223,001$243,141 and incurred a net loss of $1,838,925$4,697,644 for the sixnine months ended January 31,April 30, 2009, which included general and administrative costs of $788,996$3,140,944 and research and development expense of $579,207.$820,667.

Our net loss for the six-monthnine-month period ended January 31,April 30, 2009 decreased fromincreased slightly as compared with that in the comparative period in fiscal 2008 (from $2,380,020(a net loss or $4,649,887 in 2008 compared to $1,838,925$4,697,644 in 2009). This was primarily due to a decreasean increase in general and administrative expense from $1,447,783$3,016,426 in the six-monthnine-month period ended January 31,April 30, 2008, to $788,996 for the comparable period in 2009, an increase in research and development expense from $400,830 in 2008 to $579,207 in 2009; and an increase in sales from $208,703 in the six-month period ended January 31, 2008, to $223,001 in 2009. In 2009, we also incurred interest expense of $448,391 related to loans payable, as compared with $45,085 for the comparable period in 2008.

THREE MONTHS ENDED JANUARY 31, 2009 and 2008

We had sales of $221,056 and incurred a net loss of $939,916 for the three months ended January 31, 2009, which included general and administrative costs of $305,095 and research and development expense of $162,955.

Our net loss for the three-month period ended January 31, 2009 decreased from the comparative period in fiscal 2008 (from $1,314,311 in 2008 to $939,916 in 2009). This was primarily due to a decrease in general and administrative expense from $873,724 in the three-month period ended January 31, 2008, to $305,095$3,140,944 for the comparable period in 2009, a decrease in research and development expense from $327,288$1,058,180 in 2008 to $162,955$820,667 in 2009; and an increase in sales from $106,289$208,703 in the three-monthnine-month period ended January 31,April 30, 2008, to $221,056$243,141 in 2009. In 2009, we also incurred interest expense of $421,098$634,717 related to loans payable, as compared with $18,005$142,349 for the comparable period in 2008, and received interest income of $2,293.

In the nine months ended April 30, 2009, we had other income of $60,166, representing accrued bookkeeping and rental income from Superlattice Power, Inc. (formerly our Zingo, Inc. subsidiary), as compared with other income of $413 in 2008. In 2008, we had a gain from the sale of our Zingo, Inc. subsidiary of $162,129; we had no comparable gain in 2009.

THREE MONTHS ENDED APRIL 30, 2009 and 2008

We had sales of $22,085 and incurred a net loss of $3,757,728 for the three months ended April 30, 2009, which included general and administrative costs of $2,835,849 and research and development expense of $657,712.

Our net loss for the three-month period ended April 30, 2009 increased from the comparative period in fiscal 2008 (from $2,277,673 in 2008 to $3,757,728 in 2009). This was primarily due to an increase in general and administrative expense from $1,730,006 in the three-month period ended April 30, 2008, to $2,835,849 for the comparable period in 2009, a comparable research and development expense of $657,350 in 2008 compared to $657,712 in 2009; and an increase in sales from $-0- in the three-month period ended April 30, 2008, to $22,085 in 2009. In 2009, we also incurred interest expense of $213,649 related to loans payable, as compared with $97,264 for the comparable period in 2008.

Telecommunications Services

On April 16, 2008 we sold our controlling interest of approximately 69% of the outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc.), which provided telecommunication services to business and residential customers utilizing VoIP technology.

1721

In 2008, we had a gain from the sale of our Zingo, Inc. subsidiary of $162,129; we had no comparable gain in 2009.
The principal components of general and administrative costs in the nine month period ended April 30, 2009 were advertising and promotion for media marketing of approximately $321,000, legal and accounting fees of approximately $181,000, advertising expense for trade shows of approximately $46,000, and depreciation expense of approximately $69,000. General and administrative costs also included salaries and employee expenses of approximately $257,000, finders and consulting fees of approximately $279,000, automobile expense of approximately $112,000 and rent and office expenses of approximately $210,000. We incurred $820,667 in research and development costs in the nine months ended April 30, 2009, as compared with $1,058,180 in the prior period, due to our vehicle technology being in a more developed phase. The principal components of research and development costs in the nine month period ended April 30, 2009 were salaries and wages and including payroll taxes and expenses, of approximately $716,000, and approximately $93,000 of costs related to project development and parts and supplies.

Electric Vehicle Operations

We convert and manufacture vehicles in our developmental facility in Mooresville, North Carolina. Our team of highly qualified engineers oversee groups of electrical and mechanical staff. This 40,000 square foot facility has room for both conversions and manufacturing, as well as storage with the potential for future growth, enabling us to work on many projects and vehicles concurrently.

With the license of our lithium battery technology described below, we are concentrating on sales of our vehicles. We have initiated several nationwide newspaper advertising campaigns which have generated orders for our vehicles, and we are also seeing as a result a significant increase in inquiries about our electric vehicle products.

Effective April 15, 2008, we entered into a License Agreement (the “License Agreement”) with Superlattice Power, Inc. (formerly our subsidiary, Zingo, Inc., “SPI”) providing for our license to SPI of our patent applications and technologies for rechargeable lithium ion batteries for hybrid vehicles and other applications (“Licensed Products”). Under the License Agreement, we have the right to purchase our requirements of lithium ion batteries from SPI, and our requirements of lithium ion batteries shall be supplied by SPI in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of SPI. Our cost for lithium ion batteries purchased from SPI shall be SPI’s actual manufacturing costs for such batteries for the fiscal quarter of SPI in which our purchase takes place.

SPI has agreed to invest a minimum of $1,500,000 in each of the next two years in development of the technology for the Licensed Products.
 
Effective April 16, 2008, SPI agreed to lease approximately 5,000 square feet of space (“Leased Space”) in our North Carolina facility, such Leased Space to be suitable for, and utilized by SPI for, SPI’s developmental and manufacturing operations for Licensed Products pursuant to the License Agreement. The Leased Space is leased on a month-to-month basis at a monthly rental of $2,500, the monthly rental to be escalated five (5%) percent annually. Effective April 16, 2008, we also sold to SPI for the purchase price of $29,005, specified equipment and supplies related to the Licensed Field.

On March 9, 2009 the State of North Carolina issued a manufacturing license to the Company, and we now are manufacturing our own original design vehicles with VIN’s, while we continue to convert other vehicles.

22
Commercial Initiatives

On
Since February 5, 2004, we announced the initiation of a lithium-ion conversion project with the United States Navy. We have funded the initial 3kw prototype for this project, and the prototype has been completed and deliveredEV Innovation introduced LiVTM series electric vehicles to the Navy.government agencies. The NYC Taxi Commission agreed to test a PT Cruiser which was delivered January 2007. The converted PT Cruiser Taxi was driven for two months in New York City. The vehicle has been returned andtesting of the project is completed. Paratransit, Sacramento, California, a company providing community transportation services, purchased two converted PT Cruisers. We have signed a Space Act agreement with NASA and severalLiVTM series vehicles are being tested by NASA, at the Kennedy Space Center in Florida. We are also participating to showcase our technology in a “green” home in Calgary, Alberta. We signed an agreement in June 2007, pursuant to which the Canadian Ministry of Transportation purchased a Smart Car and PT Cruiser, both of which have been delivered. The Smart Car was not suited to their needs, has been returned and we will be refunding the purchase price. In September 2007, we signed a contract to provide and delivered a PT Cruiser to Arcadis, a contractor to the U.S. Environmental Protection Administration.Administration, NYC Taxi Commission, US Paratransit is completed. LiVTM WISE is listed in the catalogue of Unites States General Services Administration and are available for purchase to the government agencies. The target market for LiVTM WISE is federal government offices, utility companies, defense organizations and fleet operators. EV Innovations is working with Zero Truck- USA for commercialization of lithium ion powered heavy duty truck. EV Innovations now offers its own, the “WAVE” three and four wheel electric vehicles and the “INIZIO” super cars to the US market. The WAVE electric vehicle is aimed at the commuter environment. The “INIZIO” super sport car serves the high speed car market. INIZIO is also featured in the marked through the Sam’s Club “Once in a life time” offer. The most advanced lithium ion battery powered INIZIO got an outstanding response from the Sam’s club members. The INIZION and WAVE will be the front line vehicles for us. A manufacturing and assembly plant has been proposed to the DOE under the Advanced Technology Vehicle Manufacturing loan program in order to achieve scaled up production. This
particular plant design is estimated to produce around 100,000 cars in the first few years, once it is operational.

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5.25.2 Liquidity and Capital Resources

Since our incorporation, we have financed our operations almost exclusively through the sale of our common shares to investors and borrowings. We expect to finance operations through the sale of equity in the foreseeable future as we receive minimal revenue from our current business operations. There is no guarantee that we will be successful in arranging financing on acceptable terms.

At April 30, 2009, we had liabilities of $8,636,821, as compared with $6,685,173 at July 31, 2008; and a working capital deficiency of $1,010,094 and a stockholders deficiency of $6,183,528. As of April 30, 2009, we had $6,196 cash on hand.

Our property, plant and equipment increased to $2,065,316 at April 30, 2009, as compared with $2,014,580 at July 31, 2008.

We used net cash in operating activities of $1,582,300 in the nine months ended April 30, 2009, as compared with $3,809,189 in the comparable period in 2008, due to a lesser amount of cash provided by financing activities, and cash flows provided by investing activities were $121,409 in 2009, as compared with ($189,902) in 2008.

During the nine months ended January 31,April 30, 2009, we received net proceeds of $471,014$587,681 from the issuance of promissory notes for debt, and net proceeds of advances from related parties of $646,566.$1,039,298. Total cash provided by financing activities in the nine months ended April 30, 2009 was $1,626,979, as compared with $3,623,894 in 2008.

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Wyndom Capital Loan Agreement

On October 29, 2007, we entered into a Loan Agreement with Wyndom Capital Investments, Inc. (referred to in this paragraph as the “Lender”). The Loan Agreement provides for loans to the Company of up to $4,000,000, with a minimum initial loan of $500,000 the disbursement of which to us took place in late October, 2007. The notes evidencing the installments of the loans bear interest payable monthly in arrears at the rate of 10% per annum, and mature and are due and payable three years from the date of issuance. The loans under the Loan Agreement are secured by shares of our common stock held by the Lender. We are required to issue shares as collateral at the rate of two and one half shares of our common stock for each dollar principal amount of the loan advanced to us. If there is a trading halt in our common stock or we file for bankruptcy or reorganization, the Lender has full recourse against the Company to collect the unpaid amounts owing under the Loan Agreement and notes issued pursuant thereto, including a first priority lien on all of our assets. In the event of the occurrence of another type of default, which we do not cure in a timely fashion, the Lender, as its sole recourse, is entitled to take possession for its sole benefit of the shares of common stock designated as collateral for the principal amount of the Loan that is in default. After the Lender has disbursed the first $1,000,000 principal amount of the Loan to us, the Lender is entitled to receive a certificate for the balance of the 7,500,000 shares of common stock representing the collateral for the $3,000,000 balance of the funds that may be disbursed under the Loan Agreement. To the extent the $3,000,000 balance of funds are not delivered, we are entitled to cancel such certificate, with the Lender retaining the appropriate number of shares as collateral for advances in excess of $1,000,000. Following disbursement of the first $1,000,000 of funds pursuant to the Loan Agreement, on November 19, 2007, we issued 10,000,000 shares of common stock as collateral to the Lender. Following the one-for-seven reverse split effective in January 2008, we issued 8,571,427 shares of common stock to Wyndom to bring the number of their collateral shares back up to 10,000,000, as required by the Wyndom Loan Agreement. Following the 0ne-for-three stock split effective February 19, 2009, 6,666,665 shares of common stock were issued to Wyndom to bring their collateral shares back up to 10,000,000 as required by the Wyndom Loan Agreement.

As of January 31,April 30, 2009, the Company hashad borrowed approximately $4,000,000 under the Wyndom Capital Loan Agreement.

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Crystal Capital Ventures Loan Agreement

On May 5, 2008, we entered into a Loan Agreement with Crystal Capital Ventures Inc. (referred to in this paragraph as the “Lender”). The Loan Agreement provides for loans to the Company of up to $3,000,000, with a minimum initial loan of $500,000 the disbursement of which to us took place on May 19, 2008. The notes evidencing the installments of the loans bear interest payable monthly in arrears at the rate of 10% per annum, and mature and are due and payable three years from the date of issuance. The loans under the Loan Agreement are secured by shares of our common stock held by the Lender. We are required to issue shares as collateral at the rate of two and one half shares of our common stock for each dollar principal amount of the loan advanced to us. If there is a trading halt in our common stock or we file for bankruptcy or reorganization, the Lender has full recourse against the Company to collect the unpaid amounts owing under the Loan Agreement and notes issued pursuant thereto, including a priority lien on all of our assets. In the event of the occurrence of another type of default, which we do not cure in a timely fashion, the Lender, as its sole recourse, is entitled to take possession for its sole benefit of the shares of common stock designated as collateral for the principal amount of the Loan that is in default. After the Lender has disbursed the first $1,000,000 principal amount of the Loan to us, the Lender is entitled to receive a certificate for the balance of the 5,000,000 shares of common stock representing the collateral for the $2,000,000 balance of the funds that may be disbursed under the Loan Agreement. To the extent the $2,000,000 balance of funds are not delivered, we are entitled to cancel such certificate, with the Lender retaining the appropriate number of shares as collateral for advances in excess of $1,000,000. Following disbursement of the first $1,000,000 of funds pursuant to the Loan Agreement, on May 27, 2008, we issued 7,500,000 shares of common stock as collateral to the Lender. Following the one-for-three reverse stock split effective February 19, 2009, 4,999,999 shares of common stock were issued to Crystal to bring their collateral shares back up to 7,500,000 as required by the Crystal Capital Loan Agreement.

As of January 31,April 30, 2009, the Company hashad borrowed $1,697,439$2,331,420 under the Crystal Capital Loan Agreement.

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Our current operating funds are less than necessary for commercialization of our planned products, and therefore we will need to obtain additional financing in order to complete our business plan. We anticipate that up to $5,000,000 of additional working capital will be required over the next 12 months for market introduction of these products through joint venture partners or otherwise. We do not have sufficient cash on hand to meet these anticipated obligations.

Apart from the Wyndom Capital and Crystal Capital Loan Agreements, which may not furnish us with all of the capital that we will require, we do not currently have any other arrangements for financing, and we may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

Our auditors are of the opinion that our continuation as a going concern is in doubt. Our continuation as a going concern is dependent upon continued financial support from our shareholders and other related parties.

CRITICAL ACCOUNTING ISSUES

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Other Matters

New Financial Accounting Standards

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the Consolidated Financial Statements. SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest on the face of the consolidated statement of income. Under SFAS No. 160, the accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation must be accounted for as equity transactions for the difference between the parent’s carrying value and the cash exchanged in the transaction. In addition, SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated (except in the case of a spin-off), and requires expanded disclosure in the Consolidated Financial Statements that clearly identify and distinguish between the interests of the parent’s ownership interest and the interests of the noncontrolling owners of a subsidiary. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company will adopt SFAS No. 160 on JanuaryAugust 1, 2009, as required, and is currently evaluating the impact of such adoption on its financial statements.

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In February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive accounting pronouncements that address leasing transactions from the requirements of SFAS No. 157, with the exception of fair value measurements of assets and liabilities recorded as a result of a lease transaction but measured pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS 157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of SFAS No. 157 on January 1, 2008. The Company will provide the additional disclosures required relating to the fair value measurement of nonfinancial assets and nonfinancial liabilities when it fully implements SFAS No. 157 on JanuaryAugust 1, 2009, as required, and does not believe they will have a significant impact on its financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No. 161”). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company does not believe that SFAS No. 161 will have a material impact on its financial statements.

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In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. This Statement is effective sixty days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The Company is currently evaluating the potential impact, if any, ofwill adopt SFAS No. 16i2 on August 1, 2009, and does not believe the adoption of SFAS No. 162will have a material impact on its financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk - Interest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are classified as cash and cash equivalents have original maturities of three months or less. Our interest income is sensitive to changes in the general level of U.S. interest rates. We do not have significant short-term investments, and due to the short-term nature of our investments, we believe that there is not a material risk exposure. Our debt is at fixed interest rates.

Credit Risk - Our accounts receivables are subject, in the normal course of business, to collection risks. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of collection risks. As a result we do not anticipate any material losses in this area.

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Item 4(T). Controls and Procedures.

As of the end of the fiscal quarter covered by this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Principal Financial and Accounting Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-14 of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Principal Financial and Accounting Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting her to material information relating to the Company (including its consolidated subsidiaries) required to be included in this Quarterly Report on Form 10-Q. There have been no changes in the Company’s internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

PART II- OTHER INFORMATION

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)           The Company held an Annual Meeting of Stockholders on January 15, 2009, in Calgary, Alberta, Canada.

(b)           The following persons were elected directors of the Company at the Annual Meeting, to serve and hold office until the next annual meeting of stockholders and until their successors are elected and qualify: Holly A. Roseberry, Brian Newman and Gregory Navone.

(c)           At the Annual Meeting, a total of 18,100,000 shares were present in person or by proxy out of 23,347,257 shares outstanding. The following is the result of stockholder voting on the proposals before the meeting:

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ProposalVotes in FavorVotes AgainstAbstentions/ Broker Nonvotes
Election of Holly Roseberry as a Director18,100,000——
Election of Brian Newman as a Director18,100,000——
Election of Gregory Navone as a Director18,100,000——

At the stockholders meeting, by a vote of an aggregate of 1,800,000 shares of common stock, the stockholders, upon motion at the meeting by a major stockholder of the Company the stockholders of the Company approved (1) a one-for-three reverse split of the Company’s outstanding common stock; (2) a concurrent increase in our authorized common stock from 35,714,285 shares to 50,000,000; and (3) a change in the name of the Company from Hybrid Technologies, Inc. to EV Innovations, Inc.

Item 6. Exhibits

Ex 31Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

Ex 32Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as  Adopted   Pursuant   to  Section   906  of the Sarbanes-Oxley Act of 2002,filed herewith.

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.

EV Innovations, Inc.
 
/s/Stacey Fling
/s/Holly RoseberryStacey Fling
Holly Roseberry
PresidentChief Executive Officer and Director
  (Chief(Chief Executive Officer and
Principal Financial Officer)
Dated: March 20,June 18, 2009

 
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