Enova Systems Reports 7M Debt Reduction in SEC Filing

11 April 2000

Enova Systems Reports 7M Debt Reduction in SEC Filing

    TORRANCE, Calif.--April 10, 2000--Enova Systems (OTC:ECAR) reported its Form 10K for the five-month period ended Dec. 31, 1999 to the Securities and Exchange Commission (SEC) on March 30, 2000.
    This "stub" period report was required due to the change in fiscal year end from July 31 to December 31.
    Enova reported that its restructuring plan has been progressing as planned during 1999. Management has reduced outstanding liabilities, including debt, by approximately $7,000,000.
    The Company noted that the audit opinion from its independent auditors, Moss Adams, LLC, no longer contains an explanatory and restructure paragraph expressing substantial doubt about the Company's ability to continue as a "going business." Enova's management believes this to be a significant milestone for the Company, as this underscores the improving financial health of the Company.
    The Company's financial statements reflected a net loss of $961,000 for the period reported. The loss included various non-recurring charges for outstanding claims, debt restructuring and other miscellaneous compensation issues which totaled approximately $420,000 as well as other normal research and development and operating expenses.
    Research and development expenses increased to $262,000 in the five-month period ended Dec. 31, 1999 compared to $73,000 for the same five-month period in 1998. The Company continues to develop its drive system line to encompass new models to supplement the current 60, 90 and 120kW systems, as well as other drive system and component technologies.
    "We believe the Company made significant improvements this past year. We received over $4,000,000 in equity capital during the last nine months, enhanced our product line with the development of hybrid and fuel cell technologies, entered into a new production hybrid drive system development contract with Hyundai Motor Company, increased research and development programs and reduced liabilities substantially. We believe the Company is poised to move forward aggressively to develop and penetrate new markets," said Carl D. Perry, President & CEO.
    As part of the Company's new positioning, Perry announced that Edward Moore joined the Company as Director of Sales and Marketing in March. Moore will be responsible for enhancing and implementing the Company's strategic marketing plan for both domestic and international markets. He brings with him an extensive background in the alternative fuels and drive system industry, having worked with GM Hughes, AeroEnvironment and E-Bus.

    This news release contains forward-looking statements relating to Enova Systems and its products. These forward-looking statements are subject to and qualified by certain risks and uncertainties. Such statements do not imply the future success of the Company or its products. These risks and uncertainties are detailed from time to time in Enova Systems' filings with the Securities and Exchange Commission under the name U.S. Electricar, Inc.