**U.S.      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**

**March      31, 2006**

**[      ] Transition Report under Section 13 or 15(d) of the Exchange Act For the      Transition Period from ________ to ___________**

**Industrial      Enterprises of America, Inc.**

|   | ** Nevada**                                                                | ** 13-3963499**                     |
|--------|---------------------------------------------------------------------------------|------------------------------------------|
|   |  (State                or jurisdiction of incorporation                    |  (I.R.S.                Employer    |
|   |  or                organization)                                           |  Identification                No.) |
|   |                                                                            |                                     |
|   |  **711                Third Avenue, Suite 1505, New York, New York**  | **10017**                                |
|   |  (Address                of principal executive offices)                   |  (Zip                Code)          |

**(212)      490-3100**

** **

----

**Table      of Contents**

|                                                                                                                                                                                  | **Page** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Recent                Developments........................................................                            | 1        |
| **Part                I**                                                                                                                                                             |     |
| Item                1. Financial Statements..................................................                                     | 2        |
| Item                2. Management’s Discussion and Analysis or Plan of Operations                ...                                                                        | 15       |
| Item                3. Controls and Procedures.............................................                                               | 17       |
|                                                                                                                                                                                  |     |
| **Part                II**                                                                                                                                                            |     |
| Item                1. Legal Proceedings....................................................                          | 17       |
| Item                2. Unregistered Sales of Equity Securities and Use of Proceeds                ...                                                                             | 18       |
| Item                3. Defaults Upon Senior Securities....................................                                            | 19       |
| Item                4. Submission of Matters to a Vote of Security Holders............                                                                                | 19       |
| Item                5. Other Information......................................................                | 19       |
| Item                6. Exhibits.................................................................. | 19       |
|                                                                                                                                                                                  |     |
|                                                                                                                                                                                  |     |

----

**Recent      Developments**

***Sale      of Springdale Facility***

***Increase      in Earnings Guidance***

***Reverse      Stock Split***

----

**PART      I**

**Item      1. Financial Statements.**

***Critical      Accounting Policies***

----

**INDUSTRIAL      ENTERPRISES OF AMERICA, INC.**

|                                                          |                                                                                                                      |                                                                  |
|---------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|
|                                                          | **March                  31, 2006**                                                                                       |
|                                                          | **(Unaudited)**                                                                                                           |
|                                                          |                                                                                                                      |
| ASSETS                                                        |                                                                                                                      |
|                                                          | Current                  Assets                                                                                           |                                                                  |
|                                                          |                           Cash                                                         | $                  125,505                                            |
|                                                          |                           Accounts receivable, net of allowance of                  $15,000 | 5,977,208                                                             |
|                                                          |                           Other receivables                                            | 181,214                                                               |
|                                                          |                           Inventory, net of reserve of $45,000                    | 10,684,802                                                            |
|                                                          |                           Note receivable                                         | 500,000                                                               |
|                                                          |                           Prepaid expenses                                        | 375,607                                                               |
|                                                          | Total                  Current Assets                                                                                     | $                  17,844,336                                         |
|                                                          | Investment                  in common stock                                                                               | 2,617,034                                                             |
|                                                          | Property,                  plant and equipment net of accumulated depreciation                                            | 6,067,391                                                             |
|                                                          | Other                  Assets                                                                                             | 138,776                                                               |
|                                                          | Other                  intangibles, net of amortization of $28,916                                                        | 83,113                                                                |
|                                                          | Goodwill                                                                                                                  | 8,598,147                                                             |
|  TOTAL                ASSETS                             | $                  35,345,797                                                                                             |
| LIABILITIES                  & SHAREHOLDERS' EQUITY       |                                                                                                                      |
|                                                          | Current                  Liabilities                                                                                      |                                                                  |
|                                                          |                                                                                                                      | Current                  maturities of long term debt                 | $                  2,267,678 |
|                                                          |                                                                                                                      | Accounts                  payable                                     | 7,893,258 |
|                                                          |                                                                                                                      | Payable                  related parties                              | 58,782 |
|                                                          |                                                                                                                      | Accrued                  payables                                     | 717,862 |
|                                                          |                                                                                                                      | Accrued                  interest                                     | 264,033 |
|                                                          |                                                                                                                      | Accrued                  interest to shareholders and related parties | 2,302 |
|                                                          | Total                  Current Liabilities                                                                                | $                  11,203,915                                         |
|                                                          | Long                  Term Liabilities                                                                                    |                                                                  |
|                                                          |                                                                                                                      | Notes                  payable net of current debt                    | 7,494,889 |
|                                                          |                                                                                                                      | Convertible                  notes payable                            | 8,958,494 |
|                                                          |                                                                                                                      | Notes                  payable related parties                        | 1,129,918 |
|                                                          | Total                  Long Term Liabilities                                                                              | $                  17,583,301                                         |
|                                                          | Total                  Liabilities                                                                                        |                                                                  | $                  28,787,216 |
|                                                          | Shareholders'                  Equity                                                                                     |                                                                  |
|                                                          |                                                                                                                      | Preferred                  stock, $0.001 par value,                   |   |
|                                                          |                                                                                                                      |                                                                  | 10,000,000                  shares authorized; -0- shares issued and |   |
|                                                          |                                                                                                                      |                                                                  | outstanding                  as of March 31, 2005 | $                  - |
|                                                          |                                                                                                                      | Common                  stock, $0.001 par value,                      |   |
|                                                          |                                                                                                                      |                                                                  | 150,000,000                  shares authorized; 5,491.928 shares issued and |   |
|                                                          |                                                                                                                      |                                                                  | outstanding                  as of March 31, 2006 | $                  54,919 |
|                                                          |                                                                                                                      | Additional                  paid-in capital                           | 10,990,330 |
|                                                          |                                                                                                                      | Subscribed                  stock payable                             | 433,989 |
|                                                          |                                                                                                                      | Shareholder                  receivable                               | (6,000) |
|                                                          |                                                                                                                      | Director                  fees, unamortized                           | (51,000) |
|                                                          |                                                                                                                      | Equity                  development fees, unamortized                 | (751,888) |
|                                                          |                                                                                                                      | Unrealized                  securities gains (losses)                 | (10,826,978) |
|                                                          |                                                                                                                      | Retained                  (deficit)                                   | 6,715,205 |
|                                                          | Total                  Shareholders' Equity                                                                               | $                  6,558,581                                          |
| TOTAL                  LIABILITIES & SHAREHOLDERS' EQUITY | $                  35,345,797                                                                                             |

----

**INDUSTRIAL      ENTERPRISES OF AMERICA, INC.**

|                                                                |                                                 |         | **Three                Months Ended** |       | **Nine                Months Ended** |
|---------------------------------------------------------------------|------------------------------------------------------|--------------|---------------------------------------|------------|--------------------------------------|
|                                                                |                                                 |         | **Mar                31, 2006**       |       | **Mar                31, 2005**      |   | **Mar                31, 2006** |   | **Mar                31, 2005** |
|                                                                |                                                 |         |                                  |       | (Restated)                           |   |   |   | (Restated) |
|                                                                |                                                 |         |                                  |       |                                 |   |   |
| Revenues                                                            | $9,030,898                                           |         | $831,831                              |       | $19,567,081                          |   | $2,180,618 |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Cost                of Goods Sold                                   | 8,452,744                                            |         | 740,592                               |       | 16,302,307                           |   | 1,867,097 |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Gross                Profit                                         | $578,154                                             |         | $91,239                               |       | $3,264,774                           |   | $313,521 |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Expenses:                                                           |                                                 |         |                                  |       |                                 |   |   |
|                                                                | Selling,                general & administrative | 956,137      |                                  | $407,867   |                                 | $2,701,162 |   | $1,269,498 |
|                                                                | Salaries                and contract labor           | 865,025      |                                  | 82,640     |                                 | 1,290,995 |   | 198,914 |
|                                                                | Depreciation                and amortization         | 181,956      |                                  | 3,900      |                                 | 305,373 |   | 4,502 |
|                                                                | Legal                and professional fees           | 219,266      |                                  | 237,338    |                                 | 476,748 |   | 540,405 |
|                                                                | Total                Expenses                        | $2,222,384   |                                  | $731,745   |                                 | $4,774,278 |   | $2,013,319 |
|                                                                | Income                (loss) from operations         | $(1,644,230) |                                  | $(640,506) |                                 | $(1,509,504) |   | $(1,699,798) |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Interest                expense                                     | 410,433                                              |         | 65,705                                |       | 1,187,190                            |   | 120,030 |
| Operations                consolidation expense                     | 250,000                                              |         | -                                     |       | 250,000                              |   | - |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Proceeds                from sale of securities                     | 27,024                                               |         | -                                     |       | 533,802                              |   | - |
| Miscellaneous                income                                 | 711                                                  |         | 3,000                                 |       | 8,627                                |   | 6,000 |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Net                income (loss)                                    | $(2,276,928)                                         |         | $(703,211)                            |       | $(2,404,265)                         |   | $(1,813,828) |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Net                income (loss) per share basic and diluted        | $(0.53)                                              |         | $(0.27)                               |       | $(0.56)                              |   | $(0.70) |
|                                                                |                                                 |         |                                  |       |                                 |   |   |   |   |
| Weighted                average number of common shares outstanding | 4,312,712                                            |         | 2,589,419                             |       | 4,312,712                            |   | 2,589,419 |

----

**INDUSTRIAL      ENTERPRISES OF AMERICA, INC.**

|                                                                                                    |                                                                       |                                            |                           | **Nine                Months Ended** |
|---------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|-------------------------------------------------|--------------------------------|--------------------------------------|
|                                                                                                    |                                                                       |                                            |                           | **March                31, 2006**    |   | **March                31, 2005** |
| **Operating                activities**                                                                 |                                                                       |                                            | (Restated)                |
|                                                                                                    | Net                income (loss)                                           | $                (2,404,265)                    |                           | $                (1,813,828)         |
|                                                                                                    | Non-cash                items                                              |                                            |                           |                                 |
|                                                                                                    |                                                                       | Depreciation                and amortization    | 305,373                        |                                 | 12,052 |
|                                                                                                    |                                                                       | Stock                based compensation         | 413,750                        |                                 | 363,000 |
|                                                                                                    |                                                                       | Stock                based interest expense     | 16,514                         |                                 | - |
|                                                                                                    |                                                                       | Stock                sales for notes receivable | (451,425)                      |                                 | - |
|                                                                                                    | Net                changes in working capital accounts                     | 1,461,630                                       |                           | 982,709                              |
|                                                                                                    | **Net                cash (used) by operating activities**                 | **$                (658,423)**                  |                           | **$                (456,067)**       |
| **Investing                activities**                                                                 |                                                                       |                                            |                           |
|                                                                                                    | Additions                to property, plant and equipment                  | (234,890)                                       |                           | (5,283)                              |
|                                                                                                    | Proceeds                from sale of Power 3 Medical Products stock        | 55,988                                          |                           | -                                    |
|                                                                                                    | Investment                in subsidiaries                                  | (7,838,901)                                     |                           | -                                    |
|                                                                                                    | Other                                                                      | -                                               |                           | (1,013)                              |
|                                                                                                    | **Net                cash (used) by investing activities**                 | **$                (8,017,803)**                |                           | **$                (6,296)**         |
| **Financing                activities**                                                                 |                                                                       |                                            |                           |
|                                                                                                    | Bank                account over-extension                                 | -                                               |                           | $                502                 |
|                                                                                                    | Proceeds                from issuance of debt                              | 26,474,828                                      |                           | -                                    |
|                                                                                                    | Principal                payments on debt                                  | (18,451,888)                                    |                           | (313,136)                            |
|                                                                                                    | Proceeds                from notes payable related party and shareholders  | 1,129,918                                       |                           | 300,000                              |
|                                                                                                    | Payments                on related party loans                             | (1,250,442)                                     |                           | -                                    |
|                                                                                                    | Proceeds                from issuance of common stock                      | 295,690                                         |                           | 365,000                              |
|                                                                                                    | Subscribed                stock                                            | 410,000                                         |                           | 2,000                                |
|                                                                                                    | Equity                development fees                                     | (161,000)                                       |                           | -                                    |
|                                                                                                    | **Net                cash provided by Financing Activities**               | **$                8,447,106**                  |                           | **$                354,366**         |
| **Net                cash increase for period**                                                         | **$                (229,120)**                                             |                                            | **$                (107,997)** |
| Cash                at beginning of period                                                              | 354,583                                                                    |                                            | 123,531                        |
| **Cash                at end of period**                                                                | **$                125,463**                                               |                                            | **$                15,534**    |
| **SUPPLEMENTAL                DISCLOSURES RELATED TO CASH FLOWS:**                                      |                                                                       |                                            |                           |
|                                                                                                    | Interest                paid                                               | $                407,864                        |                           | $                73,521              |
|                                                                                                    | Income              taxes paid                                             | $              -                           |                           | $              -                |
| **SUPPLEMENTAL                SCHEDULE OF NON-CASH INVESTING AND FINANCING                ACTIVITIES:** |                                                                       |                                            |
|                                                                                                    | Notes                receivable for Power 3 Medical Products stock sales   | $                500,000                        |                           | $                -                   |
|                                                                                                    | Notes                payable for Unifide and Today Way’s acquisition | $                3,750,000                      |                           | $                -                   |
|                                                                                                    | Debt                converted to common stock                              | $                52,500                         |                           | $                50,258              |
|                                                                                                    | Accrued                interest converted to stock                         | $                -                              |                           | $                40,217              |
|                                                                                                    | Stock                issued for Unifide acquisition                        | $                1,050,000                      |                           | $                -                   |
|                                                                                                    | Stock                issued for Today’s Way acquisition              | $                450,000                        |                           | $                -                   |
|                                                                                                    | Stock                issued for services                                   | $                173,750                        |                           | $                7,500               |
|                                                                                                    | Stock                issued for employment agreement                       | $                42,500                         |                           | $                -                   |
|                                                                                                    | Stock                issued for equity development fees                    | $                628,890                        |                           | $                -                   |
|                                                                                                    | Stock                issued for director fees                              | $                45,000                         |                           | $                -                   |
|                                                                                                    | Stock                cancelled                                             | $                5,000                          |                           | $                -                   |

----

**Industrial      Enterprises of America, Inc.**

**Notes      to Interim Consolidated Financial Statements**

**Note      1 - Basis of presentation**

|                                                                          | June                  30,              |
|-------------------------------------------------------------------------------|----------------------------------------|
|                                                                          | 2005                                   | 2004 |
| Net                  (loss) as previously reported                            | $(3,727,810)                           | $(419,798) |
| Error                  correction in valuation method                         |                                   |   |
| Gain                  from discontinuance of operations                       | 455,514                                | 15,549,305 |
|                                                                          |                                   |   |
| Net                  income as restated                                       | $(3,272,296)                           | $15,129,507 |
|                                                                          |                                   |   |
| Accumulated                  (deficit) at beginning of period                 | 12,391,766                        | (2,737,741)  |
|                                                                          |                                   |   |
| Accumulated                  earnings (deficit) at end of period, as restated | $                 9,119,470  | $                12,391,766  |

**Note      2 - Inventory**

| Raw                materials   | $4,062,901  |
|--------------------------------|-------------|
| Work-in-process                | 2,167,641   |
| Finished                goods  | 4,454,260   |
| Total                inventory | $10,684,802 |

----

**Note      3 - Property and equipment**

| Equipment                       | 7                -                10 years |
|---------------------------------|--------------------------------------------|
| Vehicles                        | 3                -                5 years  |
| Office                equipment | 7                years                     |

|                                          |   | March                31, 2006 |   | March                31, 2005 |
|-----------------------------------------------|--------|-------------------------------|--------|-------------------------------|
| Plant                & equipment          |   | $2,653,883                    |   | $                240,718      |
| Office                equipment               |   | 130,089                       |   | 36,249                        |
| Vehicles                                      |   | 30,483                        |   | -                             |
| Leasehold                improvements         |   | 3,412,382                     |   | 5,501                         |
| Less:                Accumulated depreciation |   | (163,109)                     |   | (72,516)                      |
| Net                fixed assets               |   | $6,063,728                    |   | $                209,952      |

**Note      4 - Goodwill**

|                                                  | EMC                      |   | Unifide     |   | Today’s                Way |   | Spinwell                Holdings |   | Total        |
|-------------------------------------------------------|--------------------------|--------|-------------|--------|----------------------------------|--------|----------------------------------|--------|--------------|
| Purchase                price                         | $                808,474 |   | $3,050,000  |   | $                950,000         |   | $7,339,918                       |   | $12,148,392  |
| Less                assets acquired                   | (1,321,135)              |   | (4,895,477) |   | (399,257)                        |   | (15,626,660)                     |   | (22,242,529) |
| Add                liabilities assumed                | 1,339,880                |   | 5,017,960   |   | 441,783                          |   | 11,889,661                       |   | 18,689,284   |
|                                                  |                     |   |        |   |                             |   |                             |   |         |
| Costs                in excess of net assets acquired | $                827,219 |   | $3,172,483  |   | $                992,526         |   | $3,602,919                       |   | $8,595,147   |

**Note      5 - Earnings per share**

----

**Note      6 - Stock based compensation**

|                                                                         |  For                the Nine Months                Ended |
|------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                                                         |  March                31                                 |
|                                                                         | 2006                                                          |   | 2005 |
| Net                (loss), as reported                                       | $(2,404,265)                                                  |   | $(1,813,828) |
| Less                compensation cost determined under the fair value method | -                                                             |   | - |
| Pro                forma net (loss)                                          | $(2,404,265)                                                  |   | $(1,813,828) |

| Basic                and dilutive net (loss) per share: |    |   |                    |
|---------------------------------------------------------|---------|--------|-------------------------|
| As                reported                              | $(0.56) |   | $                (0.70) |
| Pro                forma                                | $(0.56) |   | $                (0.70) |

**Note          7 - Warrants**

----

|                                                 |   | Number                  of Warrants |   | Average                  Exercise Price |   | Warrants                  Exercisable |   | Weighted                  Average Exercise Price |
|------------------------------------------------------|--------|-------------------------------------|--------|-----------------------------------------|--------|---------------------------------------|--------|--------------------------------------------------|
|                                                 |   |                                |   |                                    |   |                                  |   |                                             |
| Outstanding                  at June 30, 2005        |   | 295,000                             |   | $0.39                                   |   | 295,000                               |   | $0.02060                                         |
| Warrants                  issued since June 30, 2005 |   | 5,964,042                           |   | $0.28                                   |   | 3,567,286                             |   | $0.08469                                         |
| Outstanding                  at March 31, 2006       |   | 6,254,042                           |   | $0.30                                   |   | 3,862,286                             |   | $0.27467                                         |

|                              |   | Warrants                  Outstanding |   | Warrants                  Exercisable |
|-----------------------------------|--------|---------------------------------------|--------|---------------------------------------|
| Range                  of Warrant |   |                                  |   | Weighted                  Average     |   | Weighted                  Average |   |   |   | Weighted                  Average |
| Exercise                  Prices  |   | Number                  of Warrants   |   | Exercise                  Price       |   | Remaining                  Contractual Life |   | Number                  of Warrants |   | Exercise                  Price |
| $0.50                             |   | 310,000                               |   | $0.50                                 |   | 4.76                  yrs |   | 310,000 |   | $0.50 |
| $0.34                             |   | 1,165,417                             |   | $0.34                                 |   | 2.91                  yrs |   | 1,165,417 |   | $0.34 |
| $0.33                             |   | 115,000                               |   | $0.33                                 |   | 5.56                  yrs |   | 115,000 |   | $0.33 |
| $0.30                             |   | 60,978                                |   | $0.30                                 |   | 4.33                  yrs |   | 60,978 |   | $0.30 |
| $0.29                             |   | 931,250                               |   | $0.29                                 |   | 4.30                  yrs |   | 931,250 |   | $0.29 |
| $0.25                             |   | 12,500                                |   | $0.25                                 |   | 4.21                  yrs |   | 12,500 |   | $0.25 |
| $0.24                             |   | 2,865,972                             |   | $0.24                                 |   | 2.91                  yrs |   | 2,865,972 |   | $0.24 |
| $0.23                             |   | 250,000                               |   | $0.23                                 |   | 9.17                  yrs |   | 250,000 |   | $0.23 |
| $0.18                             |   | 557,917                               |   | $0.18                                 |   | 4.57                  yrs |   | 557,917 |   | $0.18 |
| $0.12                             |   | 20,000                                |   | $0.12                                 |   | 6.91                  yrs |   | 20,000 |   | $0.12 |

**Note 8        - Interest Expense**

**Note 9      - Debt issuances**

----

**Note 10      - Related party transactions**

|                                                                             | March                31, 2006 |   | March                31, 2005 |
|----------------------------------------------------------------------------------|-------------------------------|--------|-------------------------------|
| Shareholders,                unsecured, 5% interest per month, due July 15, 2005 | $                -            |   | $350,000                      |
| Shareholders,                unsecured, 18% interest , due October 30, 2007      | -                             |   | 100,000                       |
| Shareholders,                unsecured, 18% interest, due November 3, 2007       | -                             |   | 50,000                        |
| Shareholders,                unsecured, 18% interest, due November 16, 2007      | -                             |   | 50,000                        |
| Shareholders,                unsecured, 18% interest, due November 26, 2007      | -                             |   | 50,000                        |
| Shareholders,                unsecured, 8% interest, due December 1, 2007        | 1,129,918                     |   | -0-                           |
|                                                                             |                          |   |                          |
|                                                                             | $1,129,918                    |   | $600,000                      |

**Note      11 - Changes in common shares outstanding**

|                                                       | Common    |
|------------------------------------------------------------|-----------|
|                                                       | Shares    |
| Outstanding                common shares at June 30, 2005  | 3,713,919 |
| Debt                converted to stock                     | 407,019   |
| Stock                issued to Unifide members             | 418,800   |
| Stock                issued to Today’s Way members   | 181,200   |
| Stock                issued for services                   | 1,068,240 |
| Stock                issued for cash                       | 198,750   |
| Stock                issued for shareholder receivable     | 4,000     |
| Stock                cancelled                             | (500,000) |
| Outstanding                common shares at March 31, 2006 | 5,491,928 |

**Note      12 - Gain on sale of securities**

**Note      13 - Mergers and acquisitions**

----

**Note      14 - Disputed Liabilities and Cancellation of Debt**

----

**Note        15 - Proforma Statement of Operations for the three months ended March 31,        2006        and March**
** **
**31,        2005.**

**(in      US $)**

|                                                         | **ILNP                  & Subsidiaries**           |   | **SPINWELL                  HOLDING**                  |   |             |   | **COMBINED**                                           |
|--------------------------------------------------------------|--------------------------------------------------------|--------|--------------------------------------------------------|--------|------------------|--------|--------------------------------------------------------|
|                                                         | **Three                  months ended March 31, 2005** |   | **Three                  months ended March 31, 2005** |   | **Eliminations** |   | **Three                  months ended March 31, 2005** |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  sales                                   | 4,408,315                                              |   | 8,770,688                                              |   | -213,744         |   | 12,965,259                                             |
| Cost                  of goods sold                          | 3,646,417                                              |   | 8,100,587                                              |   | -213,744         |   | 11,533,260                                             |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Gross                  profit                                | 761,898                                                |   | 670,101                                                |   | -                |   | 1,431,999                                              |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Selling                  & admin                         | 718,498                                                |   | 360,606                                                |   | -                |   | 1,079,104                                              |
| Salaries                  & contract labor               | 198,727                                                |   | 193,993                                                |   | -                |   | 392,720                                                |
| Depreciation                  & amortization             | 16,356                                                 |   | 39,383                                                 |   | -                |   | 55,739                                                 |
| Legal                  & professional                    | 278,628                                                |   | 63,173                                                 |   | -                |   | 341,801                                                |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Total                  expenses                              | 1,212,209                                              |   | 657,155                                                |   | -                |   | 1,869,364                                              |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss) from operations           | -450,311                                               |   | 12,946                                                 |   | -                |   | -437,365                                               |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Interest                  expense                            | 100,582                                                |   | 128,224                                                |   | -                |   | 228,806                                                |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss) before income tax expense | -550,893                                          |   | -115,278                                               |   | -                |   | -666,171                                               |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Income                  tax expense                          | -                                                      |   | -                                                      |   | -                |   | -                                                      |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss)                           | -550,893                                               |   | -115,278                                               |   | -                |   | -666,171                                               |

----

**(in      US $)**

|                                                         | **ILNP                  & Subsidiaries**           |   | **SPINWELL                  HOLDING**                  |   |             |   | **COMBINED**                                           |
|--------------------------------------------------------------|--------------------------------------------------------|--------|--------------------------------------------------------|--------|------------------|--------|--------------------------------------------------------|
|                                                         | **Three                  months ended March 31, 2006** |   | **Three                  months ended March 31, 2006** |   | **Eliminations** |   | **Three                  months ended March 31, 2006** |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  sales                                   | 4,510,058                                              |   | 7,778,760                                              |   | -631,858         |   | 11,656,960                                             |
| Cost                  of goods sold                          | 3,779,680                                              |   | 8,230,303                                              |   | -631,858         |   | 11,378,125                                             |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Gross                  profit                                | 730,378                                                |   | -451,543                                               |   |             |   | 278,835                                                |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Selling                  & admin                         | 675,272                                                |   | 438,091                                                |   |             |   | 1,113,343                                              |
| Salaries                  & contract labor               | 702,562                                                |   | 373,893                                                |   |             |   | 1,076,455                                              |
| Depreciation                  & amortization             | 93,739                                                 |   | 92,226                                                 |   |             |   | 185,965                                                |
| Legal                  & professional                    | 169,050                                                |   | 191,005                                                |   |             |   | 360,055                                                |
| Operations                  consolidation expense            | 250,000                                                |   | -                                                      |   |             |   | 250,000                                                |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
|  Total                expenses                          | 1,890,603                                         |   | 1,095,215                                         |   |             |   | 2,985,818                                         |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss) from operations           | -1,160,225                                             |   | -1,546,758                                             |   |             |   | -2,706,983                                             |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Interest                  expense                            | 310,194                                                |   | 145,104                                                |   |             |   | 455,298                                                |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss) before income tax expense | -1,470,418                                             |   | -1,691,862                                             |   |             |   | -3,162,281                                             |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Other                  Income                                | 27,735                                                 |   | -                                                      |   |             |   | 27,735                                                 |
| Income                  tax expense                          | -                                                 |   | -                                                      |   |             |   | -                                                      |
|                                                         |                                                   |   |                                                   |   |             |   |                                                   |
| Net                  income (loss)                           | -1,442,683                                             |   | -1,691,862                                             |   |             |   | -3,134,546                                             |

----

**Note      16 - Balance sheet variances since June 30, 2005**

**(in      US $)**

|                             | **ILNP                  & Subsidiaries** |   | **SPINWELL                HOLDING** |   |             |   | **COMBINED**                      |
|----------------------------------|----------------------------------------------|--------|-------------------------------------|--------|------------------|--------|-----------------------------------|
|                             | **March                31, 2005**            |   | **March                31, 2005**   |   | **Eliminations** |   | **March                31, 2005** |
|                             |                                         |   |                                |   |             |   |                              |
| Total                assets      | 16,502,512                                   |   | 13,087,145                          |   | -1,058,727       |   | 28,530,930                   |
|                             |                                         |   |                                |   |             |   |                              |
| Total                Liabilities | 6,360,131                                    |   | 11,911,244                          |   | -656,570         |   | 17,614,805                   |

**(in      US $)**

|                             | **ILNP**                          |   | **SPINWELL                HOLDING** |   |             |   | **COMBINED**                      |
|----------------------------------|-----------------------------------|--------|-------------------------------------|--------|------------------|--------|-----------------------------------|
|                             | **March                31, 2006** |   | **March                31, 2006**   |   | **Eliminations** |   | **March                31, 2006** |
|                             |                              |   |                                |   |             |   |                              |
| Total                assets      | 25,176,848                        |   | 15,190,889                          |   | -5,021,941       |   | 35,345,796                        |
|                             |                              |   |                                |   |             |   |                              |
| Total                Liabilities | 17,653,290                        |   | 12,038,129                          |   | -904.202         |   | 28,787,217                        |

**Note      17 - Subsequent events**

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**Item      2. Management’s Discussion and Analysis or Plan of      Operations.**

*Three      Months Ended March 31, 2006 as Compared to Three Months Ended March 31, 2005      *

----

*Nine      Months Ended March 31, 2006 as Compared to Nine Months Ended March 31, 2005      *

***Liquidity      and Capital Resources***

**Item      3. Controls and Procedures.**

***Evaluation      of Disclosure Controls and Procedures***

----

***Changes      in Internal Controls***

**PART      II**

**Item      1. Legal Proceedings.**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds.**

----

** **

**Item      3. Defaults Upon Senior Securities.**

**Item      4. Submission of Matters to a Vote of Security Holders.**

**Item      5. Other Information.**

**Item      6. Exhibits.**

***Exhibit      Index***

| 31.1 | Certification                of the Principal Executive Officer pursuant to Rule                13a-14(a). |
|------|------------------------------------------------------------------------------------------------------------|
| 31.2 | Certification                of the Principal Financial Officer pursuant to Rule                13a-14(a). |
| 32.1 | Section                1350 Certification of the Chief Executive Officer.                                  |
| 32.2 | Section                1350 Certification of the Chief Financial                Officer.                   |

----

|   |   |
|--------|--------|

**Signatures**

**Industrial      Enterprises of America, Inc**

**Date:      May 22, 2006**

**James      W. Margulies**

**Date:      May 22, 2006**

**John      D. Mazzuto**