**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**





**WASHINGTON,
      D.C. 20549**





FORM
      10-QSB





[X]
      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934


For
      the
      quarterly period ended March 31, 2006





[
      ]
      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934 for the transition period from


_________________
      to _______________





Commission
      File Number 0-07418





**eLINEAR,
      INC.**


(Exact
      name of small business issuer as specified in its charter)








Delaware
      76-0478045


(State
      or
      other jurisdiction of incorporation or organization) (IRS Employer
      Identification No.)





2901
      West Sam Houston Parkway North, Suite E-300, Houston, Texas
      77043


(Address
      of principal executive offices)





(713)
      896-0500


(Issuer's
      telephone number)





Check
      whether the issuer has (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.   Yes
      [X] No [ ]





As
      of
      April 24, 2006, there were outstanding 29,467,741 shares of common stock, $.02
      par value per share.





Transitional
      Small Business Disclosure Format (Check one): Yes [ ] No [X]





**eLINEAR,
      INC.**


**AND
      SUBSIDIARIES**


**INDEX
      TO FORM 10-QSB**


**March
      31, 2006**





**Part
                  I**
              **Financial
                  Information****Page
                  No.**Item
                  1.
              Financial
                  StatementsConsolidated
                  Balance Sheets March 31, 2006 (unaudited) and December 31,
                  2005
              3Consolidated
                  Statements of Operations (unaudited) Three Months Ended March 31,
                  2006 and
                  2005
              4Consolidated
                  Statements of Cash Flows (unaudited) Three Months Ended March 31,
                  2006 and
                  2005
              5Notes
                  to Unaudited Consolidated Financial Statements
              6Item
                  2.
              Management’s
                  Discussion and Analysis of Results of Operations and Financial
                  Condition
              13Item
                  3.
              Controls
                  and Procedures
              17**Part
                  II**
              **Other
                  Information**Item
                  1.
              Legal
                  Proceedings
              17Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              18Item
                  3.
              Defaults
                  Upon Senior Securities
              18Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              18Item
                  5.
              Other
                  Information
              18Item
                  6.
              Exhibits





**PART
      I. FINANCIAL INFORMATION**





**Item
      1. FINANCIAL STATEMENTS**





**eLINEAR,
      INC.**


AND
      SUBSIDIARIES


**CONSOLIDATED
      BALANCE SHEET**





March
                31,
            
            December
                31,2006
            
            2005(Unaudited)**ASSETS**Current
                assets:Cash
            
            $
            422,476
            
            $
            444,811Cash in restricted accounts
            
            
            774,512
            
            
            768,334Accounts receivable, net
            
            
            3,071,029
            
            
            4,369,037Inventory
            
            
            744,717
            
            
            1,146,451Other current assets
            
            
            107,646
            
            
            189,237Total
                current assets
            
            
            5,120,380
            
            
            6,917,870Property
                and equipment, net
            
            
            585,466
            
            
            669,290Goodwill
            
            
            1,100,000
            
            
            1,100,000Deposits
            
            
            46,871
            
            
            61,723Total
                assets
            
            $
            6,852,717
            
            $
            8,748,883**LIABILITIES
                AND SHAREHOLDERS’ DEFICIT**Current
                liabilities:Accounts
                payable, trade
            
            $
            2,979,951
            
            $
            2,588,578Line of credit, revolver
            
            
            2,874,180
            
            
            3,847,926Accrued
                liabilities
            
            
            1,459,931
            
            
            1,297,446Notes
                payable, net
            
            
            1,444,230
            
            
            1,755,700Compound
                embedded derivative current
            
            
            176,702
            
            
            198,260Total
                current liabilities
            
            
            8,934,994
            
            
            9,687,910Long-term
                debt, net
            
            
            366,392
            
            
            321,076Compounded embedded derivative liability- non-current
            
            
            15,946
            
            
            45,536Warrant
                liabilities
            
            
            787,495
            
            
            1,118,477Total
                liabilities
            
            
            10,104,827
            
            
            11,172,999Minority liability
            
            
            --
            
            
            80,225Commitments
                and contingenciesShareholders’
                deficit:Preferred stock, $.02 par value, 10,000,000 shares authorized, none
                issuedCommon
                stock, $.02 par value, 100,000,000 shares authorized
            
            
            584,616
            
            
            554,076Additional
                paid-in capital
            
            
            10,095,191
            
            
            9,765,125Accumulated
                deficit
            
            
            (13,931,917
            )
            
            (12,823,542
            )Total shareholders’ deficit
            
            
            (3,252,110
            )
            
            (
                2,504,341
            )Total
                liabilities and shareholders’ deficit
            
            $
            6,852,717
            
            $
            8,748,883





See
      accompanying notes to unaudited consolidated financial
      statements.





**eLINEAR,
      INC.**


AND
      SUBSIDIARIES


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005**


**(UNAUDITED)**





For
                the Three Months Ended
              March
                31,2006
            
            
            
            2005RestatedRevenue:Products
            
            $
            5,491,164
            
            
            
            $
            4,860,442Services
            
            
            1,020,160
            
            
            
            
            625,580Other
            
            
            15,093
            
            
            
            
            26,253Total revenue
            
            
            6,526,417
            
            
            
            
            5,512,275Cost
                of revenue:Products
            
            
            4,406,407
            
            
            
            
            4,270,339Services
            
            
            752,031
            
            
            
            
            329,418Total
                cost of revenue
            
            
            5,158,438
            
            
            
            
            4,599,757Gross
                profit
            
            
            1,367,979
            
            
            
            
            912,518Operating
                expenses:Selling, general and administrative expenses:Payroll and related expenses
            
            
            1,437,334
            
            
            
            
            1,806,743Office administration
            
            
            373,100
            
            
            
            
            370,742Professional services
            
            
            475,090
            
            
            
            
            410,764Other
            
            
            127,134
            
            
            
            
            1,394,906Total selling, general and administrative
            
            
            2,412,658
            
            
            
            
            3,983,155Depreciation and amortization
            
            
            84,264
            
            
            
            
            133,051Total operating expenses
            
            
            2,496,922
            
            
            
            
            4,116,206Loss
                from operations
            
            
            (1,128,943
            )
            
            
            
            (3,203,688
            )Other
                income (expense):Interest,
                net
            
            
            (389,352
            )
            
            
            
            (129,827
            )Change
                in fair value of derivatives
            
            
            382,130
            
            
            
            
            1,511,805Other
            
            
            27,790
            
            
            
            
            18,756Total
                other income (expense)
            
            
            20,568
            
            
            
            
            1,400,734Net
                (loss)
            
            $
            (1,108,375
            )
            
            
            $
            (1,802,954
            )Net (loss)
              per
              share:Basic and diluted
            
            $
            (0.04
            )
            
            
            $
            (
                0.08
            )Weighted
                average number of common shares outstanding:Basic
                and diluted
            
            
            28,199,813
            
            
            
            
            22,178,405





See
      accompanying notes to unaudited consolidated financial
      statements.





**eLINEAR,
      INC.**


AND
      SUBSIDIARIES


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE ENDED MARCH 31, 2006 AND 2005**


**(UNAUDITED)**





2006
            
            2005**Restated**Cash
                flows used in operating activities:Net loss
            
            $
            (1,108,375
            )
            $
            (1,802,954
            )Depreciation
            
            
            84,264
            
            
            133,044Gain on sale of property and equipment
            
            
            (27,791
            )
            
            --Bad debt expense
            
            
            8,118
            
            
            42,328Amortization of debt discounts
            
            
            (222,997
            )
            
            57,967Change in fair value of derivatives
            
            
            (382,130
            )
            
            (1,511,805
            )Stock and stock option based compensation
            
            
            160,606
            
            
            807,327Extension of warrant expiration date
            
            
            --
            
            
            27,871Minority interest
            
            
            (80,225
            )
            
            --Changes in assets and liabilities:Accounts receivable
            
            
            1,289,890
            
            
            867,784Inventory
            
            
            401,734
            
            
            (261,624
            )Other current assets
            
            
            81,591
            
            
            (3,757
            )Accounts payable
            
            
            391,373
            
            
            187,784Accrued liabilities
            
            
            162,485
            
            
            935,654Net
                cash provided (used) in operating activities
            
            
            758,543
            
            
            (520,381
            )Cash
                flows from investing activities:Purchase of property and equipment
            
            
            (45,149
            )
            
            (68,089
            )Proceeds from sale of property and equipment
            
            
            72,500
            
            
            --Acquisition of joint venture
            
            
            200,000
            
            
            --Cash in restricted account
            
            
            (6,178
            )
            
            --Deposits
            
            
            14,852
            
            
            (10,605
            )Net
                cash provided (used) in investing activities
            
            
            236,025
            
            
            (78,694
            )Cash
                flows from financing activities:Proceeds from revolver, net
            
            
            (973,746
            )
            
            2,736,000Proceeds from upfront financing cost
            
            
            --
            
            
            (449,484
            )Payment of financing agreement
            
            
            (43,157
            )
            
            (835,039
            )Proceeds from exercise of stock options
            
            
            --
            
            
            16,750Net
                cash provided (used) by financing activities
            
            
            (1,016,903
            )
            
            1,468,227Net
                increase (decrease) in cash
            
            
            (22,335
            )
            
            869,153Cash
                and cash equivalents, beginning of period
            
            
            444,811
            
            
            898,869Cash
                and cash equivalents, end of period
            
            $
            422,476
            
            $
            1,768,022Supplemental
                cash flow disclosures:Supplemental non-cash disclosures
            
            $
            --
            
            $
            71,859Debt converted into equity
            
            $
            --
            
            $
            275,000




See
      accompanying notes to unaudited consolidated financial
      statements.





**eLINEAR,
      INC.**


AND
      SUBSIDIARIES


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2006**





Note
      1.  Organization
      and Nature of Business





STATEMENT
      OF INFORMATION FURNISHED





The
      accompanying unaudited consolidated financial statements of eLinear, Inc. and
      Subsidiaries (the "Company" or "eLinear") have been prepared pursuant to the
      rules and regulations for interim financial information and the instructions
      to
      Form 10-QSB and Regulation S-B. Accordingly, certain information and footnote
      disclosures normally included in financial statements prepared in accordance
      with generally accepted accounting principles in the United States have been
      omitted. In the opinion of management, the unaudited consolidated financial
      statements contain all adjustments (consisting of only normal recurring
      accruals) necessary to present fairly the financial position as of March 31,
      2006, and the results of operations and cash flows for the three months ended
      March 31, 2006 and 2005.





The
      preparation of financial statements in conformity with generally accepted
      accounting principles 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 and
      reported amounts of revenue and expenses during the reporting period. Operating
      results for interim periods are not necessarily indicative of the results that
      may be expected for the complete fiscal year. The accompanying unaudited
      consolidated financial statements should be read in conjunction with the audited
      consolidated financial statements and notes thereto included in the Company's
      Annual Report on Form 10-KSB for the year ended December 31, 2005, filed with
      the Securities and Exchange Commission.





Note
      2.  Stock
      Options








In
      December 2004, the Financial Accounting Standards Boards (“FASB”) issued SFAS
      No. 123 (revised 2004), *Share-Based
      Payment* (“SFAS
      No. 123(R)”) *.* This
      statement requires the cost resulting from all share-based payment transactions
      be recognized in the financial statements at their fair value on the grant
      date.
      SFAS No. 123(R) was adopted by the Company on January 1, 2006. The Company
      previously accounted for stock awards under the recognition and measurement
      principles of APB No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      related interpretations.





The
      Company adopted SFAS No. 123(R) using the modified prospective application
      method described in the statement. Under the modified prospective application
      method, the Company applied the standard to new awards and to awards modified,
      repurchased, or cancelled after January 1, 2006. For options outstanding as
      of
      December 31, 2005, the Company recorded expense associated with options that
      vest during the quarter ended March 31, 2006 using the grant date fair value.
      During the quarter ended March 31, 2006, the Company issued 310,000 incentive
      options to its employees vesting generally over four years at the fair market
      price of the Company’s common stock on grant date, and 150,000 non-qualified
      stock options to one employee vesting immediately with a stock price of $.05.
      The Company used the Black-Scholes option pricing model and recorded $34,843
      of
      expense in relation to these options. The fair value of each option granted
      is
      estimated on the date of grant using the Black-Scholes option-pricing model
      with
      the following weighted average assumptions: dividend yield 0.0%, expected
      volatility of 102%, risk-free interest rate of 5.0%, and expected life of four
      years.




Prior
      to
      the adoption of SFAS 123(R), the Company presented any tax benefits of
      deductions resulting from the exercise of stock options within operating cash
      flows in the condensed consolidated statements of cash flow. SFAS 123(R)
      requires tax benefits resulting from tax deductions in excess of the
      compensation cost recognized for those options (“excess tax benefits”) to be
      classified and reported as both an operating cash outflow and a financing cash
      inflow upon adoption of SFAS 123(R). As a result of the Company’s net operating
      losses, the excess tax benefits that would otherwise be available to reduce
      income taxes payable have the effect of increasing the Company’s net operating
      loss carry-forwards. Accordingly, because the Company is not currently able
      to
      realize these excess tax benefits, such benefits have not been recognized in
      the
      statement of cash flow for the quarterly period ended March 31,
      2006.





At
      March
      31, 2006, the Company had stock-based compensation plans, which are more fully
      described in Note 9 in the Company's Annual Report on Form 10-KSB.





6




Had
      compensation expense been determined based on the estimated fair value at the
      measurement dates of awards under those plans consistent with the method
      prescribed by SFAS 123, the Company’s March 31, 2005 net loss would have been
      changed to the pro forma amounts indicated below.




Three
              Months EndedMarch
              31, 2005(Restated)Net
                loss, as reported
            
            $
            (1,802,954
            )Add:
                Stock-based compensation as reported in net loss`
            
            
            50,015Stock
                based compensation under fair value method
            
            
            (415,190
            )Pro
                forma net income (loss)
            
            $
            (2,168,129
            )Net
              income (loss) per share:Basic loss per common share - as reported
            
            $
            (0.08
            )Basic loss per common share - pro forma
            
            $
            (0.10
            )Diluted loss per common share - as reported
            
            $
            (0.08
            )Diluted loss per common share - pro forma
            
            $
            (0.10
            )





The
      fair
      value of each option granted is estimated on the date of grant using the
      Black-Scholes option-pricing model with the following weighted average
      assumptions: dividend yield 0.0%, expected volatility of 102%, risk-free
      interest rate of 5.0%, and expected life varies for each option between 48
      months and 132 months.




Note
      3.  Credit
      Facilities





In
      February 2004, the Company obtained a secured revolving note with Laurus Master
      Fund, Ltd. ("Laurus"). Under the terms of the agreement, the Company can borrow
      up to $5,000,000 at an annual interest rate of prime plus .75% (with a minimum
      rate of 4.75%). The agreement contains two notes: a minimum secured revolving
      note totaling $2,000,000 ("term note") and a revolving credit facility totaling
      $3,000,000 ("revolver") based on eligible accounts receivable.




The
      Laurus revolver provides for borrowings of up to the lesser of; (i) $3 million
      or (ii) 90% of the Company's eligible accounts receivable. The Company borrowed
      $1,000,000 under the revolving facility on the date of the agreement. The
      revolving credit facility has a term of three years and accrues interest on
      outstanding balances at the rate of prime (7.75% as of March 31, 2005) plus
      0.75% (with a minimum rate of 4.75%). The Company is permitted to go over its
      borrowing limit, which is referred to as getting an “overadvance,” if the
      Company gets the approval of Laurus. These advances typically accrue interest
      at
      a rate of 1.5% per month, but until August 2004, the Company is not required
      to
      pay this interest amount on any overadvances. In October 2004, Laurus agreed
      to
      fund an additional $500,000, which loan was not deemed an overadvance. This
      credit facility is secured by all of the Company’s assets.




The
      term note
      has a term of three years. No amounts are owed under this note at March 31,
      2006.




In
      conjunction with the Laurus credit facility, Laurus was paid a fee of $219,500
      and received a seven-year warrant to purchase up to 440,000 shares of the
      Company’s common stock at prices ranging from $1.90 to $3.32 per share. The
      warrants, which are exercisable immediately, were valued at $653,807 using
      a
      Black-Scholes option pricing model. The value of these warrants and the fees
      paid to Laurus were recorded as a discount to the term note and will be
      amortized over the term of the loan using the effective interest
      method.




Since
      the
      liquidated damages under the registration rights agreement could in some cases
      exceed a reasonable discount for delivering unregistered shares the warrants
      have been classified as a liability until the earlier of the date the warrants
      are exercised or expire. In accordance with EITF 00-19, *Accounting
      for Derivative Financial Instruments Indexed to, and Potentially Settled in,
      a
      Company’s Own Stock* ,
      the
      Company has allocated a portion of the offering proceeds to the warrants based
      on their fair value. EITF 00-19 also requires that the Company revalue the
      warrants as a derivative instrument periodically to compute the value in
      connection with changes in the underlying stock price and other assumptions,
      with the change in value recorded as other expense or other income. The Company
      determined the fair value of the warrants as follows as of the following
      issuance dates:




*March
      31, 2006*





For
      the
      three months ended March 31, 2006, the Company used an underlying stock price
      of
      $0.31 per share; no dividends; a risk free rate of 5.0%; and volatility of
      102%.
      The resulting aggregate value of the warrants as of March 31, 2006 equaled
      $64,504.





Upon
      the
      earlier of the warrant exercise or the expiration date, the warrant liability
      will be reclassified into shareholders’ equity. Until that time, the warrant
      liability will be recorded at fair value based on the methodology described
      above. Changes in the fair value during each period will be recorded as other
      income or other expense. Liquidated damages under the registration rights
      agreement will be expensed as incurred and will be included in operating
      expenses.





7




The
      Notes
      are hybrid instruments which contain both freestanding derivative financial
      instruments and more than one embedded derivative feature which would
      individually warrant separate accounting as a derivative instrument under SFAS
      133. The freestanding derivative financial instruments include the Laurus
      Warrants, which were valued individually, and totaled $653,807. The various
      embedded derivative features have been bundled together as a single, compound
      embedded derivative instrument that has been bifurcated from the debt host
      contract, referred to as the “Compound Embedded Derivative Liability”. The
      single compound embedded derivative features include the conversion feature
      within the Notes, the early redemption option, the Contract Rate adjustment
      and
      default provision. The value of the single compound embedded derivative
      liability was bifurcated from the debt host contract and recorded as a
      derivative liability, which resulted in a reduction of the initial carrying
      amount (as amortized discount) of the Notes. The unamortized discount is
      amortized to interest expense using the effective interest method over the
      life
      of the Notes, or 36 months.





Compound
      Embedded Derivative Liability





Using
      a
      layered discounted probability-weighted expected cash flow methodology, the
      fair
      value of the Derivative Liability with Compound Embedded Derivatives was
      computed at $15,945 at March 31, 2006.,


Probability-Weighted
      Expected Cash Flow Methodology





Compound
                Embedded Derivative LiabilityFebruary
                23,
              2004
            
            March
                31,
              2005
            
            March
                31,
              2006**Assumptions**
            
            (Inception)Risk
                Free interest rate
            
            
            2.21
            %
            
            4.18
            %
            
            4.82
            %Prime
                RateIncreasing .25% each quarter of first year
            
            
            4
            %
            
            6.75
            %
            
            7.75
            %Timely
                registrationIncreasing by 1% monthly up to 99%
            
            
            95
            %
            
            85
            %
            
            85
            %Default
                statusIncreasing by .1% monthly
            
            
            5
            %
            
            10
            %
            
            10
            %Alternative
                financing available and exercisedIncreasing 2.5% monthly up to 25%
            
            
            --
            %
            
            --
            %
            
            --
            %Trading
                volume, gross monthly dollarsMonthly increase
            
            
            2
            %
            
            2
            %
            
            5
            %Annual
                growth rate of stock price
            
            
            31
            %
            
            31.5
            %
            
            31.9
            %Future
                projected volatility
            
            
            102
            %
            
            86
            %
            
            86
            %Ownership
                limitationMonthly increase
            
            
            1
            %
            
            1
            %
            
            1
            %Reset
                ProvisionIncreasing 5% monthly up to 25%
            
            
            --
            %
            
            --
            %
            
            --
            %




The
      decrease in the fair value of the compound embedded derivative liability of
      approximately $29,000 and $117,0004 was recorded for the three months ended
      March 31, 2006 and 2005, respectively.





The
      balance of the notes, net of unamortized discount was $3,240,572 as of March
      31,
      2006, of which $2,874,180 is current.





*February
      2005 Funding*





On
      February 28, 2005, the Company entered into financing arrangements to receive
      up
      to a total principal amount of $12 million with Laurus, Iroquois Capital LP
      (“Iroquois”), RHP Master Fund (“RHP”), Basso Private Opportunity Holding Fund
      Ltd. (“Basso Private”), and Basso Multi-Strategy Holding Fund Ltd. (“Basso
      Multi”), (collectively, the “Investors”) in which it initially received
      $2,736,000 in cash and the ability upon certain conditions to receive the
      remaining amount of the total financing of $9,264,000. Such financing has been
      subsequently amended. The $9,264,000 was held in restricted accounts at the
      sole
      dominion and control of each respective Investor. The Company may only receive
      the amounts (less applicable accrued interest) held in the restricted account
      after (i) the initial amount received, plus interest, is paid in full, (ii)
      the
      shares of the Company common stock underlying the notes are registered; and
      (iii) either the Company or the Investor converts any amounts held in the
      Restricted Accounts into shares of the Company's common stock.  If the
      Company converts the amounts held in the restricted account, the amounts shall
      be converted at either (i) a price equal to 85% of the average of the five
      lowest closing prices of the Company common stock during the 22 trading days
      immediately prior to the date of a respective repayment notice if the average
      closing price of the Company common stock is less than 110% of the Fixed
      Conversion Price, but in no instance may such shares by converted for less
      than
      $1.00; or (ii) at the Fixed Conversion Price if the average closing price of
      the
      Company common stock for the five consecutive trading days immediately preceding
      the respective repayment notice is greater than or equal to 115% of the Fixed
      Conversion Price.





Under
      the
      terms of these notes and related documents, the Company is obligated to make
      monthly interest payments for interest accrued on the initial $2,736,000, the
      interest begins accruing on April 1, 2005. The Company is obligated to make
      monthly payments, either in cash or stock as determined by the terms of the
      notes, beginning on June 1, 2005 for the initial $2,736,000, plus applicable
      interest (the “Monthly Payment”). The Monthly Payment will be made (i)
      automatically by a conversion in stock at $1.00 per share, (ii) at the
      discretion of the Company at a reduced conversion price, or (iii) in cash paid
      by the Company at 101% of the Monthly Payment.




The
      interest rate shall be subject to adjustment on the last business day of each
      month hereafter until the maturity date. If on any maturity date (i) the Company
      shall have registered under the Securities Act of 1933, the shares of the Common
      Stock underlying the conversion of the notes and the exercise of the warrants
      issued on a registration statement declared effective by the Securities and
      Exchange Commission, and (ii) the market price of the Common Stock as reported
      by Bloomberg, LP on the principal market for the five (5) consecutive trading
      days immediately preceding such maturity date exceeds the then applicable Fixed
      Conversion Price by at least twenty five percent (25%), the interest rate for
      the succeeding calendar month shall automatically be reduced by 200 basis points
      (200 b.p.) (2.0%) for each incremental twenty five percent (25%) increase in
      the
      market price of the common stock above the then applicable Fixed Conversion
      Price. In no event shall the interest rate be less than zero percent (0%).




8




The
      Company has a redemption option in regard to the Notes and if exercised, will
      pay 115% on the principal amount outstanding at the time of such pre-payment.





As
      part
      of the above note, the Company agreed to file a registration statement with
      the
      SEC in order to register the resale of any shares issuable upon conversion
      or
      exercise of the note and warrants. The terms of its agreement with the Investors
      require it to file the registration statement and have the registration
      statement declared effective by a definitive period of time, not to exceed
      45
      days from February 28, 2005. If the Company fails to meet this deadline, if
      the
      registration statement is not declared effective prior to the 105 days after
      filing the registration statement, if the registration statement ceases to
      remain effective, or certain other events occur, the Company has agreed to
      pay
      the Investors liquated damages of 1.25% of the principal amount of the
      convertible portion of the note per month.





Events
      of
      default under the agreements include failure to pay principal, interest or
      other
      fees; breach of covenant; breach of representations and warranties, receiver
      or
      trustee; judgments; bankruptcy; stop trade; default under related agreements;
      and failure to deliver common stock or replacement notes and change in control.
      In the event of default, Laurus may require the Company to pay the principal
      balance at 115% and interest on the notes shall automatically be increased
      by
      1.5%




In
      addition to the notes the Company issued 1,800,000 warrants to the Investors.
      The warrants are exercisable by the Investors until February 28, 2012, at $1.25
      per share of Company common stock. All of the warrants are immediately
      exercisable with no requirement to return to the Company should the initial
      $2,736,000 not be paid in full.




These
      notes are secured by all of the Company and its subsidiaries' assets.




The
      registration rights agreement into which the Company entered in connection
      with
      its issuance of the warrants requires the Company to pay liquidated damages,
      which in come cases could exceed a reasonable discount for delivering
      unregistered shares and thus the warrants have been classified as a liability
      until the earlier of the date the warrants are exercised or expire. In
      accordance with EITF 00-19, *Accounting
      for Derivative Financial Instruments Indexed To, and Potentially Settled In,
      a
      Company’s Own Stock* ,
      the
      Company has allocated a portion of the offering proceeds to the warrants based
      on their fair value. EITF 00-19 also requires that the Company revalue the
      warrants as a derivative instrument periodically to compute the value in
      connection with changes in the underlying stock price and other assumptions,
      with the change in value recorded as other expense or other income.




In
      using
      the Black Scholes option-pricing model, the Company used an underlying stock
      price of $0.31 per share; no dividends; a risk free rate of 5.0%; and volatility
      of 102%




as
      March
      31, 2006. he resulting aggregate allocated value of the warrants as of March
      31,
      2006 equaled $363,346. The change in fair value of $133,109 was recorded for
      the
      three months ended March 31, 2006.




Upon
      the
      earlier of the warrant exercise or the expiration date, the warrant liability
      will be reclassified into shareholders’ equity. Until that time, the warrant
      liability will be recorded at fair value based on the methodology described
      above. Liquidated damages under the registration rights agreement will be
      expensed as incurred and will be included in operating expenses.





On
      July
      14, 2005, the Company amended that 2005 financing arrangement, entered into
      on
      February 28, 2005, for a total principal amount of $12 million with the
      Investors. The supplement modifies the February 2005 financing arrangement
      by
      (i) releasing all the funds held in the restricted account, of which $7,200,000
      was paid to the respective Investors without penalty and the remaining amount,
      approximately $2,138,921, held in the restricted account was funded to the
      Company; (ii) amending and restating the notes issued pursuant to the February
      2005 financing arrangement with the new total principal amount of $5,054,567
      that included (x) the twenty percent (20%) (including applicable fees) of the
      February 2005 financing funded to the Company in February 2005; (y) the funds
      released from the restricted accounts to the Company pursuant to the supplement;
      and (z) the interest accrued on the funds held in the restricted account from
      March 2005 until July 14, 2005; (iii) granting the Investors a right to
      participate in their pro rata portion of 60% of any future financing of the
      Company for one year; and (iv) issuing warrants exercisable after January 14,
      2006 at exercise prices ranging from $1.50 to $1.75 per share into an aggregate
      of 991,667 shares of common stock to Iroquois, RHP, Basso Private and Basso
      Multi. The terms between the Company and each of the respective Investors are
      substantially similar.





The
      amended notes are secured by all of the Company and its subsidiaries' assets.
      The payment of interest and principal, under certain circumstances, may be
      made
      with shares of Company common stock at a conversion price of no less than $1.00
      per share. The new notes will accrue interest at a rate per annum equal to
      the
“prime rate” published in the Wall Street Journal plus seventy five basis
      points, as may be adjusted. The Company has the ability to prepay any amounts
      owed under these new notes at 115% of the principal amount. The Company is
      obligated to make monthly payments, either in cash or stock as determined by
      the
      new notes, beginning on August 1, 2005 for the total principal of the new notes,
      plus applicable interest (the “Monthly Payment”). The Monthly Payment will be
      made (i) automatically by a conversion in stock at a “Fixed Conversion Price”,
      (ii) at the discretion of the Company at a reduced conversion price, but no
      less
      than $1.00, or (iii) in cash paid by the Company at 101% of the Monthly Payment.
      The Monthly Payments shall be automatically made, subject to volume limitation,
      in Company common stock at the Fixed Conversion Price if (i) the shares of
      the
      Company common stock underlying the shares of the notes are registered; and
      (ii)
      the average trading price of the Company common stock for the five days
      preceding the Monthly Payment is greater than 110% of the Fixed Conversion
      Price. If the Monthly Payment is not automatically converted into shares of
      Company common stock because the average trading price of the Company common
      stock for the five trading days prior to the due date of the Monthly Payment
      is
      less than 110% of the Fixed Conversion Price, the Company may, at its
      discretion, make the Monthly Payment in Company common stock at a conversion
      price equal to 85% of the average trading price of the Company common stock
      for
      the five lowest closing days for the 22 trading days prior to the Company's
      notice, but in no case shall the conversion price be less than $1.00. The Fixed
      Conversion Price is $1.00, subject to adjustment, but in no case reduced to
      less
      than $1.00.





9





The
      Investors
      may convert all or any of the principal amounts of their respective amended
      notes, including any accrued interest or fees thereon at the Fixed Conversion
      Price.





Notwithstanding
      the foregoing, the Company’s right to issue shares of its common stock in
      payment of obligations under the new notes shall be subject to the limitations
      that the number of aggregate shares of common stock issued to each Investor
      shall not exceed 25% of the aggregate dollar trading volume of Company common
      stock for the 22 trading days immediately preceding the date on which the
      conversion is to occur.





The
      Investors may not exercise the warrants issued pursuant to the Supplement until
      January 14, 2006 and are exercisable until January 14, 2013, of which 466,667
      of
      the warrants are exercisable at $1.50 per share and 525,000 are exercisable
      at
      $1.75 per share. The warrants were valued at $677,514 using a Black Scholes
      option-pricing model. The value of these warrants will be recorded as a discount
      to the new notes and will be amortized over the remaining term of the loan
      (31
      months) using the effective interest method.




In
      accordance with EITF 00-19, the Company recorded the warrants issued as
      derivative liabilities. The Company used the following assumptions in using
      the
      Black Scholes option-pricing model at July 14, 2005; an expected life equal
      to
      the contractual life of the warrants (seven years); underlying stock price
      of
      $0.93, no dividends; a risk free rate of 3.98%; and volatility of 87%. The
      Company preformed the same calculations at March 31, 2006, to revalue the
      warrants as of that date. In using the Black Scholes option-pricing model,
      the
      Company used an underlying stock price of $0.31 per share, no dividends; a
      risk
      free rate of 5.00%; and volatility of 102%. The resulting aggregate value of
      the
      warrants as of March 31, 2006 equaled $206,876. The change in the fair value
      of
      $73,395 was recorded for the three months ended March 31, 2006 .




The
      Notes
      are hybrid instruments which contain both freestanding derivative financial
      instruments and more than one embedded derivative feature which would
      individually warrant separate accounting as derivative instruments under SFAS
      133. The freestanding derivative financial instruments include the Investor
      Warrants, which were valued individually. The various embedded derivative
      features have been bundled together as a single, compound embedded derivative
      instrument that has been bifurcated from the debt host contract, referred to
      as
      the “Compound Embedded Derivative Liability”. The single compound embedded
      derivative features include the conversion feature within the Notes, the early
      redemption option, the Contract Rate adjustment, the premium for cash payment,
      and default provisions. The value of the single compound embedded derivative
      liability was bifurcated from the debt host contract and recorded as a
      derivative liability, which resulted in a reduction of the initial carry amount
      (as amortized discount) of the Notes. The unamortized discount is amortized
      to
      interest expense using the effective interest method over the life of the Notes,
      or 36 months.





Compound
      Embedded Derivative liability





Using
      a
      layered discounted probability-weighted expected cash flow methodology, the
      fair
      value of the Compound Embedded Derivative Liability was computed at $176,702
      as
      of and March 31, 2006. The model replicated the economics of the Notes and
      applied different events based on various conditions likely to occur over the
      life of the Notes. Multiple scenarios were used in the model and the underlying
      assumptions below were applied. The value of this single, compound embedded
      derivative instrument was bifurcated from the debt host contract and recorded
      as
      a derivative liability which resulted in a reduction of the initial carrying
      amount (as unamortized discount) to the notional amount of the
      Notes.





Probability-Weighted
      Expected Cash Flow Methodology





Compound
                Embedded Derivative LiabilityFebruary
                28,
              2005
            
            March
                31,
              2006**Assumptions**
            
            (Inception)Risk
                Free interest rate
            
            
            3.75
            %
            
            4.82
            %Prime
                RateIncreasing .25% each quarter of first year
            
            
            5.5
            %
            
            7.75
            %Timely
                registrationIncreasing by 1% monthly up to 99%
            
            
            95
            %
            
            85
            %Default
                statusIncreasing by .1% monthly
            
            
            5
            %
            
            10
            %Alternative
                financing available and exercisedIncreasing 2.5% monthly up to 10%
            
            
            --
            %
            
            --
            %Trading
                volume, gross monthly dollarsMonthly increase
            
            
            5
            %
            
            5
            %Annual
                growth rate of stock price
            
            
            31.70
            %
            
            31.9
            %Future
                projected volatility
            
            
            88
            %
            
            75
            %Ownership
                limitationMonthly increase
            
            
            1
            %
            
            1
            %Reset
                ProvisionIncreasing 5% monthly up to 25%
            
            
            0.85
            %
            
            0.50
            %




The
      decrease in the fair value of the derivative liability of $21,558 was recorded
      for the period ended March 31, 2006.




10





The
      balance
      of the notes payable under the 2005 funding are $1,444,230, net of
      discounts.





The
      Company filed a registration statement with the Securities and Exchange
      Commission to register the resale of the shares of common stock underlying
      the
      notes and the shares issuable upon exercise of the Warrants. During June 2005,
      the Securities and Exchange Commission notified the Company that it believed
      the
      filing of this registration statement violated Section 5 of the Securities
      Act.
      If a violation of Section 5 occurred, the Investors related to the February
      2005
      funding have obtained the right to require the Company to repay to the Investors
      the original amount of the notes of $2,736,000 plus interest from the initial
      date of funding for a period of one year following the date of the
      violation.




Notwithstanding
      the foregoing, the Company's right to issue shares of its common stock in
      payment of obligations under the new notes shall be subject to the limitation
      that the number of aggregate shares of common stock issued to each Investor
      shall not exceed 25% of the aggregate dollar trading volume of the Company
      common stock for the 22 trading days immediately preceding the date on which
      the
      conversion is to occur.




Note
      4.  Common
      Stock





During
      the three months ended March 31, 2006, the Company issued 351,000 shares of
      common stock for services valued at $125,763 using the stock price on the date
      issued. The Company issued 1,176,000 shares in connection with the acquisition
      of eLinear Middle East, LLC FZ.





Note
      5.  Common
      Stock Warrants





In
      connection with the equity (Note 6) and debt (Note 5) fundings, the Company
      issued warrants to acquire common stock at various prices. The following table
      summarizes the warrants outstanding as of March 31, 2005:





Exercise
                Price
            
            Financing
              Date
            
            Outstanding
              Warrants
            
            Expiration
                Date1.89
            
            
            January
                2004
            
            
            1,296,388
            
            
            January
                20093.00
            
            
            February
                2004
            
            
            676,500
            
            
            February
                20091.90
            
            
            October
                2004
            
            
            150,000
            
            
            October
                20113.50
            
            
            February
                2004
            
            
            200,000
            
            
            February
                20113.19
            
            
            February
                2004
            
            
            50,000
            
            
            February
                20113.22
            
            
            February
                2004
            
            
            40,000
            
            
            February
                20111.25
            
            
            February
                2005
            
            
            1,800,000
            
            
            February
                20121.75
            
            
            July
                14, 2005
            
            
            525,000
            
            
            July
                20121.50
            
            
            July
                14, 2005
            
            
            466,667
            
            
            July
                2012Total
            
            
            
            
            
            5,204,555





All
      warrants are exercisable at March 31, 2006. The Company has not filed and is
      not
      required to file a registration statement for the warrants issued for its
      December 2003 financing.





In
      accordance with EITF 00-19, the Company recorded warrants issued in conjunction
      with the January 2004 Private Placement as derivative liabilities. The Company
      used the following assumptions in using the Black Scholes option-pricing model
      as of March 31, 2006; an expected life equal to the contractual life of the
      warrants (five years); underlying stock price of $0.31, no dividends; a risk
      free rate of 5.00%; and volatility of 102%, with resulting value of $109,804.
      The change in the fair value of $96,715 was recorded for the three months ended
      March 31, 2006 .





In
      accordance with EITF 00-19, the Company recorded warrants issued in conjunction
      with the February 2004 Private Placement as derivative liabilities. The Company
      used the following assumptions in using the Black Scholes option-pricing model
      as of March 31, 2006; an expected life equal to the contractual life of the
      warrants (five years); underlying stock price of $0.31, no dividends; a risk
      free rate of 5.00%; and volatility of 102%, with resulting value of $109,804.
      The change in the fair value of $29,186 was recorded for the three months ended
      March 31, 2006 .








Note
      6.  Significant
      Concentration





One
      customer accounted for approximately 13% of sales for the three months ended
      March 31, 2006. No other customers represented more than 10% of sales of the
      Company for that period. The Company had one customer which had in excess of
      10%
      of the Company’s accounts receivable balance at March 31, 2006. This customer
      had 12% of the Company’s accounts receivable balance.





11





Note
      7. **** ****** Net
      Income (Loss) Per Share




Basic
      and
      diluted net income (loss) per share is presented in accordance with SFAS No.128 *Earnings
      Per Share* .
      Basic
      net income (loss) per share has been computed using the weighted-average number
      of shares of common stock outstanding during the period. Diluted net income
      (loss) per share has been computed using the weighted-average number of shares
      of common stock and dilutive potential common shares from options and warrants
      (under the treasury stock method) and convertible notes (on an as-if-converted
      basis) outstanding during the period.  During
      the three months ended March 31, 2005 options to purchase  3,821,250 shares
      of common stock, warrants to purchase 5,204,555 shares of common stock and
      8,587,241 shares of common stock issuable upon the conversion of the Laurus
      credit facility were excluded from the calculation of earnings per share since
      their inclusion would be antidilutive. During the periods ended March 31, 2006
      and 2005 there were no convertible preferred stock outstanding.




Note
      8.  Industry
      Segments





The
      Company has adopted the provisions of Statements of Financial Accounting
      Standards No. 131, "Disclosures about Segments of an Enterprise and Related
      Information” ("SFAS 131"). At March 31, 2006, the Company's four business units,
      NetView, NewBridge, eLinear and TanSeco, have separate management teams and
      infrastructures that offer different products and services.





FOR
      THE
      THREE MONTHS ENDED MARCH 31, 2006





Dollars
                $
            
            Consulting
                Services
            
            Network
                and Storage Solutions
            
            Communications
                Deployment
            
            Security
              Solutions
            
            ConsolidatedRevenue
            
            
            19,065
            
            
            4,442,171
            
            
            933,721
            
            
            1,131,461
            
            
            6,526,417Segment
                loss
            
            
            (837,374
            )
            
            (101,698
            )
            
            (21,274
            )
            
            (148,029
            )
            
            (1,108,375
            )Total
                assets
            
            
            1,435,583
            
            
            2,778,964
            
            
            1,561,050
            
            
            1,077,119
            
            
            6,852,717Capital
                expenditures
            
            
            --
            
            
            41,749
            
            
            --
            
            
            --
            
            
            45,149Depreciation
            
            
            22,696
            
            
            45,055
            
            
            1,476
            
            
            15,037
            
            
            84,264





FOR
      THE
      THREE MONTHS ENDED MARCH 31, 2005


(Restated)


Dollars
                $
            
            Consulting
                Services
            
            Network
                and Storage Solutions
            
            Communications
                Deployment
            
            Security
              Solutions
            
            ConsolidatedRevenue
            
            
            5,212
            
            
            4,378,381
            
            
            319,452
            
            
            809,230
            
            
            5,512,275Segment loss
            
            
            (998,836
            )
            
            (495,870
            )
            
            (29,037
            )
            
            (279,211
            )
            
            (1,802,954
            )Total
                assets
            
            
            2,493,097
            
            
            3,630,505
            
            
            1,540,012
            
            
            1,707,509
            
            
            9,371,123Capital
                expenditures
            
            
            27,729
            
            
            24,473
            
            
            --
            
            
            15,887
            
            
            68,089Depreciation
            
            
            24,932
            
            
            32,918
            
            
            1,476
            
            
            73,725
            
            
            133,051




The
      accounting policies of the reportable segments are the same. The Company
      evaluates the performance of its operating segments based on income before
      net
      interest expense, income taxes, depreciation expense, accounting changes and
      non-recurring items.




Note
      9. Financial Condition And Going Concern




The
      Company’s financial statements have been presented on the basis that it is a
      going concern, which contemplates the realization of assets and the satisfaction
      of liabilities in the normal course of business. The Company has negative
      working capital of $3,814,614 and has incurred losses of $1,108,375 during
      the
      three months ended March 31, 2006 and there is substantial doubt as to the
      Company's ability to achieve profitable operations.




The
      Company's management intends to raise additional operating funds through equity
      and/or debt offerings. However, there can be no assurance management will be
      successful in its endeavors. Ultimately, the Company will need to achieve
      profitable operations in order to continue as a going concern.




There
      are
      no assurances that the Company will be able to either (1) achieve a level of
      revenues adequate to generate sufficient cash flow from operations; or (2)
      obtain additional financing through either private placement, public offerings
      and/or bank financing necessary to support the Company's working capital
      requirements. To the extent that funds generated from operations and any private
      placements, public offerings and/or bank financing are insufficient, the Company
      will have to raise additional working capital. No assurance can be given that
      additional financing will be available, or if available, will be on terms
      acceptable to the Company. If adequate working capital is not available, the
      Company may be required to curtail its operations.






Note
      10
      .Legal Proceedings







From
      time
      to time, the Company may become involved in litigation arising in the ordinary
      course of its business. The Company is presently not subject to any material
      legal proceedings outside of the ordinary course of business except as set
      forth
      below:





On
      December
      16, 1999, eLinear and Imagenuity were served with a complaint captioned Chris
      Sweeney v. Kinetics.com, Inc. and Imagenuity, Inc., Circuit Court, Duval County,
      Florida, Civil Case Number 1999-7252-CA. The complaint alleged a breach of
      an
      alleged oral modification of a written employment agreement between the
      plaintiff, Chris Sweeney, and Imagenuity and alleged breaches by eLinear and
      Imagenuity of fiduciary obligations which the plaintiff claims were owed to
      him.
      Plaintiff is seeking as damages 20% of the Company's common stock received
      by
      the sole shareholder of Imagenuity
      in connection with the merger of Imagenuity with and into eLinear's subsidiary.
      After the filing of the complaint, eLinear's subsidiary, eLinear Corporation,
      was added as a defendant. The Company intends to vigorously contest the case.
      While the Company believes the case to have no merit, at this stage it is
      impossible to predict the amount or range of potential loss, if any.




In
      December 1999, the Company counter-sued Chris Sweeney in a lawsuit captioned
      eLinear Corporation v. Chris Sweeney, United States District Court, District
      of
      Colorado, Case Number 99WM-2434. The complaint sought a determination of the
      rights of the parties with respect to the termination of Chris Sweeney's
      employment agreement with Imagenuity. The lawsuit was indefinitely stayed
      pending resolution of the Florida litigation discussed above.







Item
      2.MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS ANDFINANCIAL
      CONDITION





*The
      following discussion and analysis of the Company's financial condition as of
      March 31, 2006, and its results of operations for the three month periods ended
      March 31, 2006 and 2005, should be read in conjunction with the audited
      consolidated financial statements and notes included in eLinear's Form 10-KSB
      filed with the Securities and Exchange Commission.*





**OVERVIEW**





The
      Company's business currently consists of four operating segments:





·
            Product
                fulfillment and network and storage solutions. Through its wholly
                owned
                subsidiary, NetView Technologies, Inc.("NetView"), the Company offers
                a
                complete solution to its customers for the acquisition, management
                and
                configuration of complex storage and network server
                installations.





·
            Communications
                deployment. Through its wholly owned subsidiary, NewBridge Technologies,
                Inc. ("NewBridge"), the Company provides: (a) structured cabling,
                which is
                a set of cabling and connectivity products that integrate the voice,
                data,
                video and various management systems of a structure,(b)cabling
                infrastructure design and implementation, which is the design and
                implementation of the structured cabling systems,(c)security installation
                and monitoring, and (d) digital services of voice, data and video
                over
                fiber optic networks to residential and commercial
                customers.





·
            Consulting
                services. The Company offers: (a) consulting services,(b)creative
                web site
                design,(c)web site content management software, and (d) technical
                project
                management and development
                services.





·
            Security
                solutions.Through
                TanSeco the Company has business centered on premise security solutions
                which includes a three-year contract with RadioShack Corporation
                to
                install kiosks throughout the United States, 24X7 security monitoring
                contracts with a variety of commercial customers and project work
                installing security devices and fiber/cable in client locations across
                the
                US





The
      Company has operated as a technology consulting business since December 1999.
      It
      acquired its Internet consulting business as a result of a reverse merger with
      Imagenuity in 1999. Since 1999 to date, its Internet consulting business
      consisted of Internet consulting services, creative web site design, web site
      content management and software and technical project management and development
      services. For the Three Months ended March 31, 2006, the consulting segment
      contributed less than 1% of the Company’s revenue. From 1995, its inception, the
      Company, which at the time was named Kinetics.com, was engaged in marketing
      proprietary software programs for use on the world wide web of the Internet.
      Kinetics.com marketed two software programs designed for use on the Web in
      1995
      and 1996. During 1996, several creditors of Kinetics.com obtained court
      judgments against it as a result of non-payment of financial obligations and
      in
      1997, Kinetics.com transferred all of its assets to an unaffiliated third party.
      Subsequent to the asset transfer, the only activities of Kinetics.com consisted
      of negotiating settlements with its creditors and attempting to identify a
      suitable acquisition or merger candidate. While Kinetics.com was the survivor
      in
      the merger, from an accounting standpoint, the transaction was accounted for
      as
      though it was a recapitalization of Imagenuity and a sale of shares by
      Imagenuity in exchange for the net assets of Kinetics.com. On July 31, 2000,
      it
      changed its name to eLinear, Inc.





The
      Company completed the acquisitions of NetView and NewBridge during 2003. In
      April 2003, eLinear issued 12,961,979 shares of common stock for all of the
      outstanding common stock of NetView. After the merger the stockholders of
      NetView owned approximately 90% of eLinear.





Although
      NetView became its wholly owned subsidiary, for accounting purposes this
      transaction was treated as an acquisition of eLinear and a recapitalization
      of
      NetView using the purchase method of accounting. The acquisition resulted in
      goodwill of $451,920. In March 2004, the Company recorded impairment expense
      totaling $451,920 related to 100% of the goodwill related to the 2003 eLinear
      acquisition. In March 2004, the consulting services reporting unit lost its
      largest consulting contract and the other operations that had been acquired
      in
      the eLinear purchase had declined due to the loss of key employees after the
      acquisition. During the three months ended June 30, 2004, the Company recognized
      only $220 of revenue from the consulting services business segment. Based on
      projected estimated future cash flows from the reporting unit purchased in
      2003,
      management determined a full impairment charge was required. NetView contributed
      68% of eLinear’s revenue for the three months ended March 31, 2006.





In
      July
      2003, eLinear completed the acquisition of all the outstanding shares of
      NewBridge. Pursuant to the transaction, eLinear issued 850,000 shares of common
      stock valued at $1,062,500, using the average of the bid and asked prices on
      July 31, 2003, and options to purchase 300,000 shares of common stock valued
      at
      $274,000, using Black Scholes, to the shareholders of NewBridge. The acquisition
      was accounted for using the purchase method of accounting resulting in goodwill
      of $1,491,102, as restated. In September 2004, the Company recorded impairment
      expense totaling $391,114 related to a portion of the goodwill related to the
      NewBridge acquisition. The Company performed a valuation analysis of the
      discounted projected estimated future cash flows from the reporting unit. Based
      on the valuation analysis, the Company elected to write down the goodwill for
      NewBridge to $1,100,000 resulting in the impairment charge. NewBridge
      contributed 17% of eLinear's revenue for Three Months ended March 31,
      2006.





In
      November 2004, the Company acquired all of the outstanding and issued stock
      of
      TanSeco from RadioShack. As a result, TanSeco became a wholly-owned subsidiary
      of eLinear. The Company purchased the stock with cash and acquired inventory,
      fixed assets and security monitoring contracts. Concurrent with this
      transaction, TanSeco entered into a three-year services agreement with
      RadioShack whereby TanSeco will provide the installation, service, repair and
      inspection of security, closed circuit television and fire systems used by
      RadioShack for the security of its more than 5,000 company-owned stores, kiosks
      and other physical locations.





13




**RECENT
      DEVELOPMENTS**





**CRITICAL
      ACCOUNTING POLICIES**





*General*





The
      consolidated financial statements and notes included in this Form10-QSB contain
      information that is pertinent to this management's discussion and analysis.
      The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires the Company to
      make
      estimates and assumptions that affect the reported amounts of its assets and
      liabilities, and affect the disclosure of any contingent assets and liabilities.
      The Company believes these accounting policies involve judgment due to the
      sensitivity of the methods, assumptions, and estimates necessary in determining
      the related asset and liability amounts. The significant accounting policies
      are
      described in its financial statements and notes included in its Form 10-KSB/A
      (First Amendment) filed with the Securities and Exchange
      Commission.





*Revenue
      Recognition*





The
      Company's revenue recognition policy is objective in that it recognizes revenue
      when products are shipped or services are delivered. Accordingly, there are
      no
      estimates or assumptions that have caused deviation from its revenue recognition
      policy. Additionally, the Company has a limited amount of sales returns, which
      would affect its revenue earned.





The
      Company accounts for arrangements that contain multiple elements in accordance
      with EITF 00-21, “ *Revenue
      Arrangements with Multiple Deliverables”* .
      When
      elements such as hardware, software and consulting services are contained in
      a
      single arrangement, or in related arrangements with the same customer, the
      Company allocates revenue to each element based on its relative fair value,
      provided that such element meets the criteria for treatment as a separate unit
      of accounting. The price charged when the element is sold separately generally
      determines fair value. In the absence of fair value for a delivered element,
      the
      Company allocates revenue first to the fair value of the underlying elements
      and
      allocates the residual revenue to the delivered elements. In the absence of
      fair
      value for an undelivered element, the arrangement is accounted for as a single
      unit of accounting, resulting in a delay of revenue recognition for the
      delivered elements until the undelivered elements are fulfilled. The Company
      limits the amount of revenue recognition for delivered elements to the amount
      that is not contingent on future delivery of products or services or subject
      to
      customer-specified return of refund privileges.





The
      Company recognizes revenue from the sale of manufacturer’s maintenance and
      extended warranty contracts in accordance with EITF 99-19 net of its costs
      of
      purchasing the related contracts.





*Goodwill*





As
      of
      March 31, 2006, the Company had $1,100,000 of goodwill resulting from the
      acquisition of NewBridge Technologies, Inc. Goodwill represents the excess
      of
      cost over the fair value of the net tangible assets acquired and is not
      amortized. However, goodwill is subject to an impairment assessment at least
      annually which may result in a charge to operations if the fair value of the
      reporting segment in which the goodwill is reported declines. In September
      2004,
      the Company recorded impairment expense totaling $391,114 related to a portion
      of the goodwill related to the NewBridge Technologies, Inc. acquisition in
      July
      2003. The Company performed a valuation analysis of the discounted projected
      estimated future cash flows from the reporting unit. Based on the valuation
      analysis, the Company elected to write down the goodwill for NewBridge to
      $1,100,000 resulting in the impairment charge. Due to the large amount of
      goodwill presently included in its financial reports, if impairment is required,
      its financial condition and results would be negatively affected.





*Accounting
      for Stock-Based Compensation*




SFAS
      No.
      123(R) require all share-based payments to employees and directors to be
      recognized in the financial statements based on their fair values, using
      prescribed option-pricing models. Upon adoption pro-forma disclosure will no
      longer be an alternative to financial statement recognition. The Company adopted
      the provisions of SFAS No. 123(R) in the first quarter of 2006. The Company
      uses
      the modified prospective method of adoption and e uses the Black-Scholes option
      pricing model to value share-based payments. The fair value of stock option
      grants under the employee stock purchase plan required expensed for the three
      months ended March 31, 2006 was $34,843.




Statement
      No. 123(R) also requires the benefit related to income tax deductions in excess
      of recognized compensation cost to be reported as a financing cash flow, rather
      than as an operating cash flow as required under current accounting guidance. As
      a
      result of the Company’s net operating losses, the excess tax benefits that would
      otherwise be available to reduce income taxes payable have the effect of
      increasing the Company’s net operating loss carry-forwards. Accordingly, because
      the Company is not currently able to realize these excess tax benefits, such
      benefits have not been recognized in the statement of cash flow for the
      quarterly period ended March 31, 2006.





*Allowance
      for Doubtful Accounts*





The
      Company maintains an allowance for doubtful accounts, which reflects the
      estimate of losses that may result from the inability of some of its customers
      to make required payments. The estimate for the allowance for doubtful accounts
      is based on known circumstances regarding collectability of customer accounts
      and historical collections experience. If the financial condition of one or
      more
      of its customers were to deteriorate, resulting in an impairment of their
      ability to make payments, additional allowances may be required. Material
      differences between the historical trends used to estimate the allowance for
      doubtful accounts and actual collection experience could result in a material
      change to its consolidated results of operations or financial position. As
      of
      March 31, 2006, the Company maintained an allowance for doubtful accounts of
      $152,001, which allowance was 5% of total accounts receivable as of that
      date.





14




*Derivative
      Financial Instruments*





The
      Company accounts for all derivative financial instruments in accordance with
      SFAS No. 133. Derivative financial instruments are recorded as liabilities
      in
      the consolidated balance sheet, measured at fair value. When available, quoted
      market prices are used in determining fair value. However, if quoted market
      prices are not available, the Company estimates fair value using either quoted
      market prices of financial instruments with similar characteristics or other
      valuation techniques.





The
      value
      of the derivative liabilities relating to the credit facilities in the quarterly
      financial statements are subject to the changes in the trading value of the
      Company’s common stock and other assumptions. As a result the Company’s
      quarterly financial statements may fluctuate from quarter to quarter based
      on
      factors such as trading value of the Company’s Common Stock, the amount of
      shares converted by Laurus in connection with the Laurus credit facilities
      and
      exercised in connection with the Warrant outstanding. Consequently, the
      Company’s consolidated financial position and results of operations may vary
      from quarter to quarter based on conditions other than the Company’s operating
      revenue and expenses. See Notes 3 and 5 regarding valuation methods used for
      derivative liabilities.





Derivative
      financial instruments that are not designated as hedges or that do not meet
      the
      criteria for hedge accounting under SFAS No. 133 are recorded at fair value,
      with gains or losses reported currently in earnings. All derivative financial
      instruments held by the Company as March 31, 2006 were not
      designated.





**RESULTS
      OF OPERATIONS AND FINANCIAL CONDITION**


**Three
      Months Ended March 31, 2006 and Three Months Ended March 31,
      2005**





*Revenue* Total
      revenue for the three months ended March 31, 2006 was $6,526,417 which was
      an
      increase of 18.4% over the prior year period of $5,512,275. The Company
      concentrates its efforts on building expertise in the areas of convergence
      of
      communications with information technology and in sophisticated information
      security and physical security technologies. Revenue generated from the network
      and storage solutions business segment for the Three Months ended March 31,
      2006
      was $4,442,171, which was relatively flat compared to $4,378,381 for the first
      Three Months of 2005. The network and storage solutions business segment
      contributed 68% of total revenue for the current three month period, down from
      70% in 2005. The Company has begun adding new personnel and is offering new
      service solutions to the market and expects a higher rate of growth in this
      area
      in the future. Revenue from communications solutions more than doubled for
      the
      Three Months of 2006 to $933,721, an increase of 192% for the three months
      ended
      March 31, 2006 compared to the comparable period in 2005, and represented 14%
      of
      total revenue. Security solutions brought in revenue that totaled $1,131,461
      in
      the first Three Months of 2006 which was an increase of 40% over the comparable
      period in 2005.





Of
      the
      revenue generated for the three months Ended March 31, 2006, one customer in
      the
      medical vertical market provided in excess of 10% of the Company's revenue
      contributing 12% of the revenue. No other customer provided more than 10% of
      the
      Company’s revenue for the 2006 period.





*Cost
      of sales* .
      Total
      cost of sales for the and three months ended March 31, 2006 was $5,158,438
      an
      increase of $558,681 or 12%, over the prior year period of $4,599,757. Trends
      in
      cost of goods sold for the company is influenced by how the mix of services
      versus products changes. Lower margin, but high volumes of products are
      reflected in higher cost of goods sold. Cost of Services as a percent of revenue
      was 74% in 2006 versus 93% in the same nine month period in 2005. Product cost
      was 80% of revenue for 2006 compared to 89% in 2005.





For
      the
      network and storage solutions business segment, cost of sales is comprised
      of
      the costs associated with acquiring hardware and software to fill customer
      orders. For the consulting services business segment, cost of sales consists
      of
      full-time personnel and contract employee costs associated with projects eLinear
      provides to its customers for a fee. For the communications deployment business
      segment, cost of sales consists of materials and personnel to build the customer
      infrastructure. The increase in cost of sales was due to the cost of procuring
      hardware and software to fill an expanded number of customer orders. The
      Company’s principal suppliers of hardware and software products are Hewlett
      Packard and Cisco Systems. The Company anticipates they will continue to be
      its
      principal suppliers in the future. Total hardware and software costs amounted
      to
      $4,406,407 for the three months ended March 31, 2006 compared to $4,270,339
      for
      the same period in 2005.





*Gross
      profit.* Total
      gross profit increased from $912,518 for the three months ended March 31, 2005,
      to $1,367,979 for the three months ended March 31, 2006, an increase of $455,461
      or 49.9%. Total gross profit as a percentage of revenue increased from 17%
      for
      the three months ended March 31, 2005 to 21% for the current year period. More
      emphasis on higher margin services relative to product sales resulted in higher
      gross profit percentages overall as the total volume of services grew from
      $625,800 for the first three months of 2005 to $1,020,160 for the comparable
      period in 2006.





*Operating
      expenses.* Total
      operating expenses for the Three Months ended March 31, 2006 were $2,496,922,
      a
      decrease of $1,619,284, or 39% less than prior year period of $4,116,206. The
      various components of this decrease are as follows:





•  The
      Company spent $64,326 more for professional services for the first three months
      of 2006 as compared to 2005. This increase was primarily for accounting services
      related to the restatement of financial statements relating to the adoption
      of
      new accounting treatment and disclosures for borrowings. Payroll expense
      decreased 20% or by $369,409 for the three months ended March 31, 2006 versus
      the comparable period in 2005 due to the implementation of a cost cutting
      program which reduced the number of personnel in all areas.





•  Office
      administration expenses remained relatively flat at $373,100 for the Three
      Months ended March 31, 2006 compared to $370,742 for the comparable prior year
      period. The components of office administration are office rent expense, office
      expenses, staff development and dues and subscriptions.





•  Other
      expenses decreased by 91% in the first three months of 2006 or $1,267,772.
      The
      primary reason for the decrease was that the Company conducted an investor
      awareness/marketing program in 2005 which was not continued in 2006. The Company
      spent approximately $1,048,000 for this program for the 2005 period.





15




*Depreciation.* Depreciation
      expense decreased to $84,264 for the three months ended March 31, 2006 from
      $133,051 for the same period in 2005 due to a decrease in the value of assets
      being depreciated in the three months ended March 31, 2006 compared to the
      same
      period in 2005.





*Interest
      expense* .
      Interest expense for the three months ended March 31, 2006 increased to $399,352
      from $(205,746) reflecting the interest paid on the revolving and term credit
      facilities including amortizations of discounts.





*Change
      in fair value of derivative.* Derivative
      liabilities in connection with the Laurus credit facility and common stock
      warrants resulted in income of $382,130 for the three months ended March 31,
      2006 compared to income of $1,511,805 for the same period of 2005. The changes
      in valuation of the derivatives is the result of changes in valuation variables
      such as interest rates, underlying common stock prices and volatility in
      addition to changes in the number of warrants issued in relation to the host
      debt.





*Net
      loss* .
      The net
      loss for the three month ended March 31, 2006,was $1,108,375 or $(0.04) per
      share basic and diluted, compared to net loss of $1,802,954 or $(0.08) per
      share
      basic and diluted, for the previous year period.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      following summary table presents comparative cash flows of the Company for
      the
      Three Months ended March 31, 2006 and 2005:





Three
                Months Ended
              March
                31,2006
            
            2005Net
                cash provided by (used in) operating activities
            
            $
            758,543
            
            $
            (520,381
            )Net
                cash provided by (used in) investing activities
            
            $
            236,025
            
            $
            (78,694
            )Net
                cash provided by (used in) financing activities
            
            $
            (1,016,903
            )
            $
            1,468,227





*Changes
      in cash flow* .
      Net
      cash provided in operating activities for the three months ended March 31,
      2006,
      was $758,543 compared to net cash used in operating activities of $520,381
      for
      the prior year period. This was an increase of $1,278,924 over the prior year
      period. The primary components of net cash provided (used) in operating in
      activities for fiscal 2006 were a net loss of $1,108,375 decreases in accounts
      receivable resulting from increased collection activity when compared to the
      prior fiscal period and decreases in inventory as a result of better inventory
      management . The cash provided by operating activities also included an increase
      in accrued liabilities and accounts payable. Cash provided in investing
      activities increased by $314,719 primarily due to proceeds from a sale of
      property and equipment and the acquisition of a joint venture decrease of
      capital expenditures, increase in deposits for the current fiscal period The
      Company purchased $45,149 equipment and furniture, during the current period
      compared to $68,089 in the three months ended March 31, 2005. Cash used by
      financing activities increased from a net provision of cash of $1,468,227 to
      a
      use of $1,016,903 for the prior year fiscal period due primarily to a reduction
      in the use of the revolving line of credit.





*Capital
      Resources* .
      The
      Company has funded its operations through the sale of common stock, the exercise
      of stock options and warrants, lines of credit, the Laurus financing agreement
      and the February 2005 financing agreement. During February 2005, the Company
      obtained a financing agreement with for up to $12,000,000 certain investors
      and
      received gross proceeds of $2,736,000, the remaining $9,264,000 is held by
      the
      Investors in a restricted account. This financing agreement is more fully
      described in Note 3 to the financial statements. The Company also has a
      financing agreement with Laurus Master Fund and a line of credit with Textron
      Financial Corporation.





*Liquidity.* As of
      March 31, 2006, the Company had cash balances in non-restricted accounts of
      $422,476 and negative working capital of approximately $3,800,000. On July
      14,
      2005, the Company supplemented its February 2005 financing agreement and will
      transfer $2,736,000 classified as “Notes payable and rescission liability” to
      long-term debt on its financial statements as of July 31, 2005. The Company
      has
      completed two financings and two sales of stock during 2004 and 2005, all of
      which included warrants. If all the warrants outstanding are exercised the
      Company could raise up to approximately $9.5 million.




The
      Company
      believes it has sufficient capital sources to implement its business plan during
      fiscal 2006; however, a new investment capital will be sought to fund operations
      during fiscal 2006, if necessary. If the Company is required to obtain
      additional financing, it will be required to do so on a best efforts basis.
      The
      Company regularly considers new proposals for additional financing. In November,
      2005 the Company entered into an agreement to sell 5,355,946 shares of its
      common stock at a price of $0.378 per share to net the Company $4,024,548 upon
      closing. The shares are a part of a pool of shares marketed in the United States
      Global Equities Fund on the Luxembourg Exchange. The shares will not be issued
      until funding has occurred. There is no guarantee that the fund will be
      successfully marketed and that the shares will be sold. Alternative sources
      of
      capital are currently being considered.  As of the date of this filing no
      shares have been issued.  The Company's auditors have expressed a going
      concern in their audit opinion.




16





The
      Company's
      management intends to raise additional operating funds through equity and/or
      debt offerings. However, there can be no assurance management will be successful
      in its endeavors. Ultimately, the Company will need to achieve profitable
      operations in order to continue as a going concern.




There
      are no
      assurances that the Company will be able to either (1) achieve a level of
      revenues adequate to generate sufficient cash flow from operations; or (2)
      obtain additional financing through either private placement, public offerings
      and/or bank financing necessary to support the Company's working capital
      requirements. To the extent that funds generated from operations and any private
      placements, public offerings and/or bank financing are insufficient, the Company
      will have to raise additional working capital. No assurance can be given that
      additional financing will be available, or if available, will be on terms
      acceptable to the Company. If adequate working capital is not available, the
      Company may be required to curtail its operations.




The
      Company's auditors have expressed a going concern in their audit opinion.




**OFF-BALANCE
      SHEET ARRANGEMENTS**





The
      Company does not have any off-balance sheet arrangements.




Item
      3. Controls and Procedures





In
      accordance with the Securities Exchange Act of 1934 (Exchange Act”) the Company
      carried out an evaluation, under supervision and with the participation of
      management, including its Chief Executive Officer and Principal Accounting
      Officer, of the effectiveness of its disclosure controls and procedures as
      of
      the end of the period covered by this report. Based on this evaluation, the
      Company’s Chief Executive Officer and Principal Accounting Officer concluded
      that the Company’s disclosure controls and procedures were effective as of March
      31, 2006, to provide reasonable assurance that information required to be
      disclosed in its reports filed or submitted under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in the
      Securities and Exchange Commission’s rules and forms.





**PART
      II OTHER INFORMATION**





Item
      1. Legal Proceedings




From
      time to
      time, the Company may become involved in litigation arising in the ordinary
      course of its business. The Company is presently not subject to any material
      legal proceedings outside of the ordinary course of business except as set
      forth
      below:




On
      December
      16, 1999, eLinear and Imagenuity were served with a complaint captioned Chris
      Sweeney v. Kinetics.com, Inc. and Imagenuity, Inc., Circuit Court, Duval County,
      Florida, Civil Case Number 1999-7252-CA. The complaint alleged a breach of
      an
      alleged oral modification of a written employment agreement between the
      plaintiff, Chris Sweeney, and Imagenuity and alleged breaches by eLinear and
      Imagenuity of fiduciary obligations which the plaintiff claims were owed to
      him.
      Plaintiff is seeking as damages 20% of our common stock received by the sole
      shareholder of Imagenuity in connection with the merger of Imagenuity with
      and
      into eLinear's subsidiary. After the filing of the complaint, eLinear’s
      subsidiary, eLinear Corporation, was added as a defendant. The Company intends
      to vigorously contest the case. While the Company believes the case to have
      no
      merit, at this stage it is impossible to predict the amount or range of
      potential loss, if any.




In
      December
      1999, the Company counter-sued Chris Sweeney in a lawsuit captioned eLinear
      Corporation v. Chris Sweeney, United States District Court, District of
      Colorado, Case Number 99-WM-2434. The complaint sought a determination of the
      rights of the parties with respect to the termination of Chris Sweeney’s
      employment agreement with Imagenuity. The lawsuit was indefinitely stayed
      pending resolution of the Florida litigation discussed above.











Item
      2. Changes in Securities and Use of Proceeds.





**RECENT
      SALES OF UNREGISTERED SECURITIES**





All
      of
      the following transactions were completed pursuant to Section 4(2) of the
      Securities Act. With respect to issuances made pursuant to Section 4(2) of
      the
      Securities Act, the transactions did not involve any public offering and were
      sold to a limited group of persons. Each recipient either received adequate
      information about the Company or had access, through employment or other
      relationships, to such information, and the Company determined that each
      recipient had such knowledge and experience in financial and business matters
      that they were able to evaluate the merits and risks of an investment in the
      Company.





During
      March of 2006 the Company issued 588,000 shares to each of two individuals
      for a
      total of 1,196,000 shares as part of an adjustment of the Company’s ownership
      and capital investment in eLinear Middle East, FZ, LLC. at a value of $100,000
      each or $200,000.





During
      the three months ended March 31, 2006, the Company issued 351,000 shares of
      common stock for services valued at $125,763.





Except
      as
      otherwise noted, all sales of the Company's securities were made by officers
      of
      the Company who received no commission or other remuneration for the
      solicitation of any person in connection with the respective sales of securities
      described above. The recipients of securities represented their intention to
      acquire the securities for investment only and not with a view to offer for
      sale
      in connection with any distribution thereof and appropriate legends were affixed
      to the share certificates and other instruments issued in such
      transactions.





During
      the quarter ended March 31, 2006, the Company did not make any repurchases
      of
      its common stock.





Item
      3. Defaults Upon Senior Securities - None





Item
      4. Submission of Matters to a Vote of Security Holders -
      None





Item
      5. Other Information - None










Item
      6. Exhibits




Exhibit
                  No.
              
              Description2.1
              
              Agreement
                  and Plan of Merger, dated October 11, 1999, between Registrant,
                  eLinear
                  Corporation and Imagenuity, Inc. (incorporated by reference to
                  Exhibit A-1
                  to Registrant's Current Report on Form 8-K, dated October 25,
                  1999)2.2
              
              Agreement
                  and Plan of Merger, dated April 15, 2003, between Registrant, NetView
                  Acquisition Corp. and NetView Technologies, Inc. (incorporated
                  by
                  reference to Exhibit 2.2 to Registrant's Annual Report on form
                  10-KSB,
                  dated April 15, 2002)3.1
              
              Articles
                  of Incorporation of Registrant (incorporated by reference to Registrant's
                  Form 10-KSB for the period ended December 31, 1995)3.2
              
              Bylaws
                  of Registrant (incorporated by reference to Registrant's Form 10-KSB
                  for
                  the period ended December 31, 1995)3.3
              
              Amended
                  and Restated Certificate of Incorporation of Registrant (incorporated
                  by
                  reference to Registrant's Form 10-QSB for the period ended June
                  30,
                  2000)4.1
              
              Specimen
                  of Registrant's Common Stock Certificate (incorporated by reference
                  to
                  Registrant's Form 10-KSB for the period ended December 31,
                  1995)10.1
              
              Employment
                  Agreement with Tommy Allen (incorporated by reference to Exhibit
                  10.3 to
                  Registrant's Annual Report on Form 10-KSB, dated April 15, 2003)
                  *10.2
              
              2000
                  Stock Option Plan (incorporated by reference to Exhibit 4.1 to
                  Registrant's Definitive Proxy Statement on Schedule 14A, dated
                  June 30,
                  2000) *10.3
              
              Amendment
                  No. 1 to Registrant's 2000 Stock Option Plan (incorporated by reference
                  to
                  Exhibit 4.2 to Registrant's Form S-8, dated July 31, 2001)
                  *10.4
              
              Amended
                  and Restated 2003 Stock Option Plan (incorporated by reference
                  to Exhibit
                  10.1 to Registrant's Form S-8, dated January 14, 2003)
                  *10.5
              
              Form
                  of Indemnification Agreement for all officers and directors of
                  Registrant
                  (incorporated by reference to Registrant's Form 10-QSB filed with
                  the
                  Commission on October 24, 2000)10.6
              
              Securities
                  Purchase Agreement dated as of January 12, 2004 between eLinear,
                  Inc. and
                  the Investors named therein (incorporated by reference to Exhibit
                  10.1 to
                  Registrant's Form 8-K, dated January 28, 2004)10.7
              
              Form
                  of Class A Warrant issued to each of the Investors in the Securities
                  Purchase Agreements dated as of January 12, 2004 (incorporated
                  by
                  reference to Exhibit 10.2 to Registrant's Form 8-K, dated January
                  28,
                  2004)10.8
              
              Form
                  of Class B Warrant issued to each of the Investors in the Securities
                  Purchase Agreements dated as of January 12, 2004 (incorporated
                  by
                  reference to Exhibit 10.3 to Registrant's Form 8-K, dated January
                  28,
                  2004)10.9
              
              Registration
                  Rights Agreement issued to each of the Investors in the Securities
                  Purchase Agreements dated as of January 12, 2004 (incorporated
                  by
                  reference to Exhibit 10.4 to Registrant's Form 8-K, dated January
                  28,
                  2004)
 10.10
              
              Securities
                  Purchase Agreement dated as of February 4, 2004 between eLinear,
                  Inc. and
                  the Investors named therein (incorporated by reference to Exhibit
                  10.13 to
                  Registrant's Annual Report on Form 10-KSB, dated February 13,
                  2004)10.13
              
              Form
                  of Class A Warrant issued to each of the Investors in the Securities
                  Purchase Agreements dated as of February 4, 2004 (incorporated
                  by
                  reference to Exhibit 10.14 to Registrant's Annual Report on Form
                  10-KSB,
                  dated February 13, 2004)10.14
              
              Form
                  of Class B Warrant issued to each of the Investors in the Securities
                  Purchase Agreements dated as of February 4, 2004 (incorporated
                  by
                  reference to Exhibit 10.15 to Registrant's Annual Report on Form
                  10-KSB,
                  dated February 13, 2004)10.15
              
              Registration
                  Rights Agreement issued to each of the Investors in the Securities
                  Purchase Agreements dated as of February 4, 2004 (incorporated
                  by
                  reference to Exhibit 10.16 to Registrant's Annual Report on Form
                  10-KSB,
                  dated February 13, 2004)10.16
              
              Common
                  Stock Purchase Warrant Agreement dated as of February 23, 2004
                  by and
                  between eLinear, Inc. and Laurus Master Fund, LLC (incorporated
                  by
                  reference to Exhibit 10.18 to Registrant's Form 8-K, dated February
                  26,
                  2004)10.17
              
              Secured
                  Revolving Note Agreement dated as of February 23, 2004 by and between
                  eLinear, Inc., NetView Technologies, Inc. and NewBridge Technologies,
                  Inc.
                  and Laurus Master Fund, LLC (incorporated by reference to Exhibit
                  10.19 to
                  Registrant's Form 8-K, dated February 26, 2004)10.18
              
              Secured
                  Convertible Minimum Borrowing Note Agreement dated as of February
                  23, 2004
                  by and between eLinear, Inc., NetView Technologies, Inc. and NewBridge
                  Technologies, Inc. and Laurus Master Fund, LLC (incorporated by
                  reference
                  to Exhibit 10.20 to Registrant's Form 8-K, dated February 26,
                  2004)10.19
              
              Minimum
                  Borrowing Note Registration Rights Agreement dated as of February
                  23, 2004
                  by and between eLinear, Inc. and Laurus Master Fund, LLC (incorporated
                  by
                  reference to Exhibit 10.21 to Registrant's Form 8-K, dated February
                  26,
                  2004)10.20
              
              Funds
                  Escrow Agreement dated as of February 23, 2004 by and between eLinear,
                  Inc., NetView Technologies, Inc. and NewBridge Technologies, Inc.
                  and
                  Laurus Master Fund, LLC (incorporated by reference to Exhibit 10.22
                  to
                  Registrant's Form 8-K, dated February 26, 2004)10.21
              
              eLinear,
                  Inc. 2004 Stock Option Plan (incorporated by reference to Exhibit
                  A to
                  Registrant's Definitive Information Statement, dated October 15,
                  2004)
                  *10.22
              
              Amendment
                  to the Security Agreement and Ancillary Agreement with Laurus Master
                  Funs,
                  LLC (incorporated by reference to Exhibit 10.24 to Registrant's
                  Form SB-2
                  dated November 5, 2004)10.23
              
              Stock
                  Purchase Agreement of TanSeco Systems, Inc. (incorporated by reference
                  to
                  Exhibit 10.25 to Registrant's Form SB-2 dated November 5,
                  2004)10.24
              
              Service
                  Agreement with RadioShack Corporation (incorporated by reference
                  to
                  Exhibit 10.26 to Registrant's Form SB-2 dated November 5,
                  2004)10.25
              
              Form
                  of Master Security Agreement, dated as of February 28, 2005, by
                  and
                  between eLinear, Inc., NetView Technologies, Inc., NewBridge Technologies,
                  Inc., TanSeco Systems, Inc. and Investor (incorporated by reference
                  to
                  Exhibit 10.1 to Registrant's Form 8-K dated March 3,
                  2005)
 10.26
                
                Form
                    of Common Stock Purchase Warrant Agreement, dated as of February
                    28, 2005,
                    by and between eLinear, Inc. and Investor (incorporated by reference
                    to
                    Exhibit 10.2 to Registrant's Form 8-K dated March 3,
                    2005)10.27
                
                Form
                    of Secured Convertible Term Note, dated as of February 28, 2005,
                    by and
                    between eLinear, Inc. and Investor (incorporated by reference
                    to Exhibit
                    10.3 to Registrant's Form 8-K dated March 3, 2005)10.28
                
                Form
                    of Restricted Account Agreement, dated as of February 28, 2005,
                    by and
                    between eLinear, Inc., the bank and Investor (incorporated by
                    reference to
                    Exhibit 10.4 to Registrant's Form 8-K dated March 3,
                    2005)10.29
                
                Form
                    of Registration Rights Agreement, dated as of February 28, 2005,
                    by and
                    between eLinear, Inc. and Investor (incorporated by reference
                    to Exhibit
                    10.5 to Registrant's Form 8-K dated March 3, 2005)10.30
                
                Form
                    of Stock Purchase Agreement, dated as of February 28, 2005, by
                    and between
                    eLinear, Inc. and Investor (incorporated by reference to Exhibit
                    10.6 to
                    Registrant's Form 8-K dated March 3, 2005)10.31
                
                Consulting
                    Agreement dated December 22, 2005 with Kevan Casey (incorporated
                    by
                    reference to Exhibit 10.31 to Registrant's Annual Report on Form
                    10-KSB,
                    dated March 18, 2005) *10.32
                
                Form
                    of Supplement, dated July 14, 2005, by and between Company and
                    Investor.
                    (incorporated by reference to Exhibit 10.1 to Registrant's Form
                    8-K dated
                    July 20, 2005)10.33
                
                Form
                    of Warrant, dated as of July 14, 2005, by and between eLinear,
                    Inc. and
                    Investor. . (incorporated by reference to Exhibit 10.1 to Registrant's
                    Form 8-K dated July 20, 2005)10.34
                
                Form
                    of Warrant, dated as of July 14, 2005, by and between eLinear,
                    Inc. and
                    Investor. . (incorporated by reference to Exhibit 10.1 to Registrant's
                    Form 8-K dated July 20, 2005)10.35
                
                Form
                    of Amended and Restated Secured Convertible Term Note, dated
                    as of July
                    14, 2005, by and between the eLinear, Inc. and Investor. (incorporated
                    by
                    reference to Exhibit 10.1 to Registrant's Form 8-K dated July
                    20,
                    2005)10.36
                
                2005
                    Employee Stock Purchase Plan (incorporated by reference to Exhibit
                    A to
                    Registrant's Definitive Information Statement, dated May 6, 2005)
                    *10.37
                
                2005
                    Stock Option Plan (incorporated by reference to Exhibit A to
                    Registrant's
                    Definitive Information Statement, dated May 6, 2005) *31.1
                
                Certification
                    of Tommy Allen31.2
                
                Certification
                    of Phillip Michael
                    Hardy32.1
                
                Certification
                    for Sarbanes-Oxley Act of Tommy
                    Allen32.2
                
                Certification
                    for Sarbanes-Oxley Act of Phillip Michael
                    Hardy*
                    Indicates management contract or compensatory plan or
                    arrangement.











In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereto duly
      authorized.


**eLINEAR,
                INC.**Date: July
                18, 2006
              By:
              /s/ Tommy
                AllenTommy
                AllenChief
                Executive Officer




**eLINEAR,
              INC.**Date: July
              18, 2006
            By:
            /s/ Phillip
              Michael HardyPhillip
              Michael HardyPresident
              and
              Principal Financial and Accounting
              Officer