**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10-QSB/A**


**[Amendment
      No. 2]**





**[x]
      Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934**





For
      the
      quarterly period ended **September
      30, 2004**





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





Commission
      File Number: 000-30646





**Industrial
      Enterprises of America, Inc.**


(formerly
      known as Advanced Bio/Chem, Inc.)


(Exact
      name of registrant as specified in its charter)





Nevada      **** **13-3963499**


(State
      or
      jurisdiction of incorporation  (I.R.S.
      Employer Identification No.)


or
      organization)


711
        Third Avenue, Suite 1505, New York, NY10017
 (Address
        of principal executive offices)     (Zip
        Code)
  **(212)
        490-3100**
 (Registrant’s
      telephone number, including area code)





Ciro
      International, Inc., 445 Fifth Avenue, Suite 11A, New York, New York
      10016


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





Indicate
      by check mark whether the registrant (1) filed all reports required to be filed
      by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
      12
      months (or 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 [ ] No [X]





APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY








PROCEEDING
      DURING THE PRECEDING FIVE YEARS





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Securities Exchange Act after the distribution
      of
      securities under a plan confirmed by a court. Yes [ ] No [ ]





APPLICABLE
      ONLY TO CORPORATE ISSUERS





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.





As
          of
          September 11, 2006, 7,618,889 shares of the registrant’s Common Stock were
          outstanding.





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











**Explanatory
          Note**
  As
          previously disclosed by Industrial Enterprises of America, Inc., a Nevada
          corporation (the “Company”), in Amendment No. 1 to the Transition Report on Form
          10-KSB for the six months ended June 30, 2004 (the “Transition Report”), filed
          with the Securities and Exchange Commission (the “SEC”) on September 12, 2006,
          the Company amended and restated its financial statements, including the
          notes
          therein, for the six months ended June 30, 2004, in order to correct an
          error in
          recording the sale of its operating assets under the equity method of accounting
          instead of recording the transaction as an arms length transaction recognizing
          the fair market value of the securities received in the transaction. 
 This Amendment No. 2 (this “Amendment No. 2”) to the Quarterly Report on
          Form 10-QSB for the period ended September 30, 2004 makes the same correction
          to
          the Company’s unaudited financial statements for such period.
  Pursuant
          to the rules of the SEC, Item 6, "Exhibits," of Part III of Amendment No.
          1 to
          the Quarterly Report on Form 10-QSB for the period ended September 30,
          2004
          (“Amendment No. 1”) has been amended to contain updated certifications from our
          Chief Executive Officer and Chief Financial Officer, as required by Sections
          302
          and 906 of the Sarbanes-Oxley Act of 2002.
  Please
          note that the Company filed Amendment No. 1 before the filing of the Transition
          Report; therefore, Amendment No. 1 reflected the Company's financial condition
          for the nine months ended September 30, 2004, while this Amendment No.
          2 relates
          to the three months ended September 30, 2004. The Company has made changes
          within this Amendment No. 2 to take account of this discrepancy. Other
          than
          discussed above, this Amendment No. 2 only amends Amendment No.1 to reflect
          the
          effects of the restatement, and we have not modified or updated other
          disclosures presented in Amendment No. 1.  Accordingly, this Amendment No.
          2 does not reflect events occurring after the filing of Amendment No. 1
          and does
          not modify or update those disclosures affected by subsequent events, except
          as
          specifically referenced herein.  Information not affected by this Amendment
          No. 2 is unchanged and reflects the disclosures  made
          at
          the time of the filing of Amendment No. 1 on January 24,
          2005.








**Table
      of Contents**








**Page**Recent
                Developments................................................................
            1**Part
                I**Item
                1. Financial Statements.........................................................
            3Item
                2. Management’s Discussion and Analysis or Plan of Operations
                ......
            4Item
                3. Controls and Procedures.....................................................
            6**Part
                II**Item
                1. Legal Proceedings.............................................................
            7Item
                2. Unregistered Sales of Equity Securities and Use of Proceeds
                .........
            7Item
                3. Defaults Upon Senior Securities............................................
            7Item
                4. Submission of Matters to a Vote of Security Holders
                ..................
            7Item
                5. Other Information............................................................
            7Item
                6. Exhibits.........................................................................
            7











***Recent
      Developments***





**Name
      Change and Adoption of Amended and Restated Bylaws**





Effective
      as of December 9, 2004, Advanced Bio/Chem, Inc., a Nevada corporation, formerly
      Ciro International, Inc., amended its Articles of Incorporation to change its
      name from “Advanced Bio/Chem, Inc.” to “Industrial Enterprises of America, Inc.”
by filing a Certificate of Amendment with the Secretary of State of the State
      of
      Nevada.





Effective
      as of December 9, 2004, the Board of Directors of the Company adopted the
      Company’s Amended and Restated Bylaws. The Board of Directors desired to amend
      the existing bylaws mainly due to the fact that such bylaws were adopted by
      the
      Company’s predecessor, Mid-Way Medical and Diagnostic Center, Inc., in
      1997.





**Sale
      to Power3 Medical Products, Inc.**





In
      May
      2004, the Company entered into an Asset Purchase Agreement (the “Agreement”),
      among the Company, Power3, and Steven B. Rash and Ira Goldknopf (collectively,
      the "Shareholders"). The sale was approved by the Company’s shareholders by
      proxy. As provided in the Agreement, the Company sold to Power3 all of the
      Company’s assets in consideration for 15,000,000 shares of the common stock, par
      value $.001 per share, of Power3. The assets disposed of by the Company included
      all tangible personal property, intellectual property, rights in contracts
      that
      the Company is a party to, along with intangible property, including goodwill.
      In consideration for the benefits that they received by virtue of the
      transaction, each of the Shareholders agreed to make the representations,
      warranties, and indemnifications in the Agreement jointly and severally, along
      with the Company, and each of the Shareholders agreed to enter into and be
      bound
      by a Non-Competition Agreement and an Employment Agreement containing, among
      other things, covenants respecting confidentiality, non-competition and
      non-solicitation. The terms of the Agreement were determined by arms' length
      negotiations between the parties.





**Appointment
      of New Directors and Officers**





In
      May
      2004, Steven B. Rash, the Company’s Chief Executive Officer, and Ira Goldknopf,
      the Company’s Chief Science Officer, resigned. In July 2004, the sole director
      of the Company, Helen Park, resigned and Crawford Shaw was appointed as sole
      director, President and Chief Executive Officer. The Company’s current
      management has no information as to the departure or service of Eric Becker
      and
      Gene Thomas. The Company will continue to research to see if such information
      is
      available. In August 2004, John Mazzuto and Michael Collyer were appointed
      as
      directors to fill the vacancies on the Board of Directors. On October 15, 2004,
      the Board of Directors elected Crawford Shaw as the Company’s Chairman of the
      Board, Chief Executive Officer and President, John D. Mazzuto as Vice Chairman
      of the Board, Chief Financial Officer and Assistant Secretary, Michael Collyer
      as Secretary and General Counsel, Dennis O’Neill as Controller and Ilene
      Engelberg as Assistant Controller. Unfortunately, Mr. Collyer, a director,
      member of the Company’s Compensation Committee and the Company’s Secretary and
      General Counsel, passed away on December 15, 2004.


Page
          1


**2004
      Stock Option Plan**





In
      August
      2004, the Company’s Board of Directors approved the adoption of the 2004 Stock
      Option Plan. The 2004 Stock Option Plan permits the grant of (i) options exercisable for shares
      of the Company’s common stock, (ii) stock appreciation rights entitling the
      recipient to receive cash or shares of our common stock and (iii) restricted
      shares of our common stock to our officers and other employees, outside
      directors and consultants, upon such terms, including exercise price and
      conditions and vesting schedule, as may be determined by the Compensation
      Committee of our Board of Directors. The plan authorizes the granting of awards
      of up to a maximum of 15,000,000 shares of the Company’s common stock.





**Purchase
      of EMC Packaging, Inc.**





In
      October 2004, the Company purchased all of the issued and outstanding capital
      stock (the “EMC Shares”) of EMC Packaging, Inc., a Delaware corporation (“EMC”),
      from the holders of all of the issued and outstanding capital stock of EMC
      (the
“EMC Stockholders”). On the effective date of the purchase of the EMC Shares,
      EMC became the Company’s wholly owned subsidiary. In consideration for their EMC
      Shares, the EMC Stockholders received an aggregate of 2,296,800 shares of the
      Company’s common stock.








**Departure
      of Independent Auditors and Retention of New Independent
      Auditors**





The
      independent auditors of Ciro International, Inc., Lazar Levine and Felix LLP,
      predecessor auditor of the legal acquirer, for accounting purposes, in a reverse
      merger, resigned as the independent auditors of Ciro International, Inc.
      effective December 7, 2004 because such auditors had no dealings with the
      Company since July 24, 2003. In October 2003, the Company filed a Form 15 with
      the Securities and Exchange Commission (the “Commission”) under Rule 12g-4(a)(1)(i) **** of
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), electing to
      become a non-reporting company on the basis that its common stock was held
      by
      fewer than 300 persons. On February 28, 2003, the board of directors of Advanced
      Bio/Chem, Inc., a Texas corporation (“ABC Texas”), approved the retention of Fitts,
      Roberts & Co., P.C to audit the financial statements of ABC Texas for the
      years ended December 31, 2002 and 2001. On June 3, 2004, the board of directors
      of ABC Texas again approved the retention of Fitts, Roberts & Co., P.C. to
      audit the financial statements of ABC Texas for the year ended December 31,
      2003. On December 29, 2004, Fitts, Roberts & Co., P.C. informed the Company
      that it would not stand for reelection as the Company’s independent auditors.
      The Company received certain observations from Fitts, Roberts & Co., P.C.,
      including, but not limited to, the following: (i) the Company lacks specific
      policies and a procedure guide; (ii) the separation of duties to support
      internal controls is lacking; (iii) there is poor documentation and a lack
      of
      trained accounting staff; and (iv) the Company has a lack of reconciliation
      of
      accounts and has a number of audit adjusting journal entries. On December 9,
      2004, the Company’s Board of Directors approved the retention of Beckstead and
      Watts, LLP as the Company’s independent auditors going forward. There have been
      no disagreements with any of the Company’s independent auditors to the knowledge
      of the Company’s Board of Directors.


Page
          2


**2004
      Private Placement**





In
      September 2004, the Company offered and sold an aggregate of 1,000,000 shares
      of
      its common stock to several accredited investors for $0.05 per share. The
      purchasers in this private placement represented his or her intention to acquire
      the securities for investment only and not with a view toward distribution.
      These securities were not sold through an underwriter and there were no
      underwriting discounts or commissions involved. These sales and purchases in
      the
      private placement were exempt from registration under the Securities Act of
      1933, as amended (the “Securities Act”) and the regulations promulgated
      thereunder, on the basis that the private placement did not involve a public
      offering.





**Item
      1. Financial Statements.**





***Critical
      Accounting Policies***





The
      Company believes that the following critical accounting policies reflect its
      more significant judgments and estimates used in the preparation of its
      consolidated financial statements:







Revenue
      Recognition





The
      Company recognizes revenue principally from contract services performed in
      the
      area of protein identification as the services are completed. Payments by
      customers for services not yet performed are classified as deferred revenue.
      Revenue recognition, in part, depends on management’s assessment of when
      services are deemed completed.





Income
      Tax





The
        Company recognizes deferred tax assets and liabilities based on differences
        between the financial reporting and tax bases of assets and liabilities using
        the enacted tax rates and laws that are expected to be in effect when the
        differences are expected to be recovered. The Company provides a valuation
        allowance for deferred tax assets for which it does not consider realization
        of
        such assets to be more likely than not. Management has determined as
        of June 30, 2004 that it is not probable that the Company will realize
        a future tax benefit from its deferred tax assets.





Accounting
      for Stock-Based Compensation





The
      Company has adopted the disclosure provisions of SFAS No. 123, “Accounting for
      Stock-Based Compensation.” In accordance with the provisions of SFAS No. 123,
      the Company applies Accounting Principles Board Opinion 25 and related
      interpretations in accounting for stock issued to its employees and consultants.
      Management exercises judgment in its determination of when significant non-cash
      stock transactions have occurred.





Please
      see the Financial Statements beginning on page F-1 **.**


Page
          3


**Item
          2. Management’s Discussion and Analysis or Plan of
          Operations.**
 
 **Note
          Regarding Ciro and ABC Texas**


The
        Company’s discussion and analysis of its financial condition for the three
        months ended September 30, 2004 treats the assets of Ciro International Inc.
        (the Company’s predecessor (“Ciro”), as existing prior to the merger (the
“Merger”) between Ciro Acquisition Corp., a Texas corporation and a wholly owned
        subsidiary of Ciro formed for purposes of the Merger (“Ciro Acquisition”), and
        ABC Texas, consummated pursuant to an Agreement and Plan of Merger (the “Merger
        Agreement”) among Ciro, Ciro Acquisition (which was inappropriately identified
        in the Merger Agreement as Advanced Bio/Chem Acquisition Corp. and ABC Texas,
        on
        their own, as immaterial, as illustrated in the Company’s unaudited financial
        statements contained herein. Under the Merger Agreement, Ciro Acquisition
        merged
        with and into ABC Texas in a tax free exchange of shares at which time ABC
        Texas
        became a wholly owned subsidiary of Ciro. Prior June 12, 2003, the effective
        date of the Merger, Ciro was in essence a “shell” company since, as of December
        31, 2002, all licenses issued by the Company expired. Following the
        effectiveness of the Merger, the Company became a holding company for ABC
        Texas
        and all of the Company’s assets consisted of the assets of ABC Texas. As a
        result, comparisons of the three months ended March 31, 2004 and 2003 are
        solely
        of ABC Texas.





Cash
            $
                3,796Accounts
                receivable - trade
            5,785Equipment,
                net of accumulated depreciation
            128,881Patents,
                net of accumulated amortization
            16,844Leasehold
                security deposit
            2,968Total
                Assets disposed of
            $
                158,274Capital
                leases
            147,639Accounts
                payable
            80,437Accrued
                expenses
            31,675Total
                Liabilities disposed of
            $
                259,751Liabilities
                due to discontinued operations
            $(101,477)





*Results
      of Operations*








On
        May
        11, 2004, by unanimous consent of the Board of Directors and a majority of
        the
        shareholders of the Company, the Company entered into an Asset Purchase
        Agreement with Power 3 Medical Products, Inc selling substantially all of
        the
        Company’s operations, and operating assets. Effective May 18, 2004, the purchase
        agreement was finalized and the assets and certain liabilities were acquired
        by
        Power 3 for 15,000,000 shares of common stock of Power 3. The
        transaction is recognized as an arms' length transaction recognizing the
        fair
        market value of the securities received in the transaction during the fiscal
        year ended June 30, 2004, the transition period. (See
        financials footnote Note 12 - “Mergers and Acquisitions” for further
        details.)




Page
          4


The
      operating results of this discontinued operation for the period ended May 17,
      2004, consisted of the following:







Revenues
              $
                  141,362Operating
                  expenses
              (353,291)Interest
                  expense
              (
                  58,221)Net
                  (loss)
              $(270,150)





As
          a
          result of this transaction, the Company recorded net income (loss) of $(152,062)
          and $(1,244,566) for the three month periods ending September 30, 2004
          and 2003,
          respectively. Loss
          from
          operations (including discontinued) for the three months ended September
          30,
          2004 was $(150,049) compared to a loss of $(1,190,317) in the same period
          in
          2003. The decrease is attributed to decreased salaries and contract labor,
          as
          well as decreased expenses overall since the sale of operations.
 
 Included
          in the three and nine month amounts in 2003 was a current period expense
          of
          $660,000 for the stock grant of 825,000 shares (at $0.80 per share) to
          the
          former CEO of the Company. In addition, an additional 200,000 shares (at
          $0.80
          per share) was promised under an option agreement entered into on September
          5,
          2003 but not yet executed; nor are they anticipated to be executed since
          the
          officer is no longer employed by the Company.
 
 Net
          income (loss) for the three month periods ended September 30, 2004 and
          2003,
          respectively, was $(152,062) and $(1,244,566).
 
 Net
          income (loss) per share basic and diluted for the three month periods ended
          September 30, 2004 and 2003, respectively, was $(0.01) and $(0.15) per
          share.
  Page
            5


*Liquidity
          and Capital Resources*
 
 The
          Company had working capital of $34,677 as at September 30, 2004. This compares
          to a working capital deficit of $(1,977,216) at the fiscal year end, June
          30,
          2004. The majority of the increase in the deficit is attributed to the
          asset sale described above.
 
 Net
          cash
          used by operations for the three months ended September 30, 2004 was $(196,244)
          compared to a negative cash flow in the same period in 2003 of $(567,503).


The
        Company obtained funds to operate in the three months ended September 30,
        2004 from the issuance of common stock in
        the
        amount of $98,475, stock subscriptions for $50,000 and increased notes payable
        to shareholders and related parties of $50,000.





CAUTIONARY
      STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
      LITIGATION REFORM ACT OF 1995





It
      should
      be noted that in this Management's Discussion and Analysis or Plan of Operations
      contains "forward-looking statements" within the meaning of Section 27A of
      the
      Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of
      the Exchange Act and are made pursuant to the safe harbor provisions of the
      Private Securities Litigation Reform Act of 1995. The terms "believe",
      "anticipate", "intend", "goal", "expect" and similar expressions may identify
      forward-looking statements. These forward-looking statements represent the
      Company's current expectations or beliefs concerning future events. The matters
      covered by these statements are subject to certain risks and uncertainties
      that
      could cause actual results to differ materially from those set forth in the
      forward-looking statements, including the Company's dependence on
      weather-related factors, introduction and customer acceptance of new products,
      the impact of competition and price erosion, as well as supply and manufacturing
      constraints and other risks and uncertainties. The foregoing list should not
      be
      construed as exhaustive, and the Company disclaims any obligation to
      subsequently revise any forward-looking statements to reflect events or
      circumstances after the date of such statements, or to reflect the occurrence
      of
      anticipated or unanticipated events. The Company wishes to caution readers
      not
      to place undue reliance on any such forward-looking statements, which speak
      only
      as of the date made.





**Item
      3. Controls and Procedures.**





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





The
      Company's Chief Executive Officer and Chief Financial Officer, after evaluating
      the effectiveness of the Company's disclosure controls and procedures (as
      defined in Exchange Act Rule 13a-15(e)) as of the end of the period being
      reported (the "Evaluation Date"), have concluded that as of the Evaluation
      Date,
      the Company's disclosure controls and procedures were not effective in ensuring
      that information required to be disclosed by the Company in the reports it
      files
      or submits under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Commission's rules and forms.
      Such officers reached this conclusion because the Company’s records, prior to
      the recent change in management, had not been maintained and processed to meet
      both financial reporting and other Commission disclosure needs and requirements.
      Management has reviewed the recommendations set forth in a letter from the
      Company’s auditors and have set March 30, 2005 as a deadline to bring the
      Company’s disclosure controls and procedures in line with such recommendations.
      The Company’s


Page
          6


independent
      auditors have made a number of recommendations including, but not limited to,
      the following: (i) the Company should improve accounting controls through the
      formalization of accounting practices through promulgation of accounting
      policies and procedures, and (ii) additional recommendations related to
      improving internal controls through the separation of duties within the
      accounting function. Management has hired outside consultants to help with
      this
      process.





***Changes
      in Internal Controls***





No
      significant changes in the Company's internal controls or in other factors
      that
      could significantly affect these controls following the date of evaluation
      came
      to management's attention.





**PART
      II**


**Item
      1. Legal Proceedings.**





As
      of
      September 30, 2004, the Company was neither a party nor were any of its
      properties subject to any legal proceedings.





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





The
      following sets forth information relating to all sales of our common stock
      during the quarter ended September 30, 2004, which sales were not registered
      under the Securities Act.





During
      the quarter ended September 30, 2004, the Company offered and sold an aggregate
      of 3,193,475 shares of its common stock to several accredited investors and
      for
      accrued interest and services for between $0.002 and $1.625 per share. The
      purchasers in this private placement represented his or her intention to acquire
      the securities for investment only and not with a view toward distribution.
      These securities were not sold through an underwriter and there were no
      underwriting discounts or commissions involved. These sales and purchases in
      the
      private placement were exempt from registration under the Securities Act and
      the
      regulations promulgated thereunder, on the basis that the private placement
      did
      not involve a public offering.





Other
      than the securities mentioned above, the Company did not issue or sell any
      securities during the quarter ended September 30, 2004.





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





None.





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





None





**Item
      5. Other Information.**





Please
      see “Recent Developments” on page 1.





**Item
      6. Exhibits.**


Page
          7


***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.





Page
          8





**Signatures**





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





**Industrial
      Enterprises of America, Inc** .


(Registrant)





Dated: **September
      13, 2006**


By:  /s/ John D.
      Mazzuto


**John
      D. Mazzuto** ,
      Chief
      Executive


Officer,
      President, Assistant Secretary and Director





Dated: **September
        13, 2006**
              By: /s/ James W. Margulies


**James
      W. Margulies** ,
      Chief
      Financial Officer





Page
          9


**INDUSTRIAL
      ENTERPRISES OF AMERICA, INC.**


**(formerly
      Advanced Bio/Chem, Inc.)**


**Balance
      Sheet**


**September
      30, 2004**


**(unaudited)**


**(restated)**





ASSETSCurrent
                  AssetsCash
              
              $
                  36,690Due
                  from Power 3 Medical Products, Inc.
              
              97,716Allowance
                  for doubtful account
              
              (97,716)Total
                  Current Assets
              36,690Investment
                  in common stock
              33,450,000TOTAL
                  ASSETS
              
              
              $
                  33,486,690LIABILITIES
                  & SHAREHOLDERS' EQUITYCurrent
                  LiabilitiesAccrued
                  interest payable shareholders
              $
                  2,013Total
                  Current Liabilities
              $
                  2,013Long
                  Term LiabilitiesNotes
                  payable related parties and shareholders
              50,000Total
                  Long Term Liabilities
              $
                  50,000Total
                  Liabilities
              $
                  52,013Shareholders'
                  EquityCommon
                  stock, $0.001 par value,50,000,000
                  shares authorized,18,577,750
                  shares issued and outstandingat
                  September 30, 2004
              18,578Additional
                  paid-in capital
              2,727,006Subscribed
                  stock
              97,489Unrealized
                  securities gain
              19,950,000Retained
                  earnings
              10,641,604Total
                  Shareholders' Equity
              $
                  33,434,677TOTAL
                  LIABILITIES & SHAREHOLDERS' Equity
              $
                  33,486,690








**See
                accompanying footnotes to financial statements.**
              F-1







**INDUSTRIAL
        ENTERPRISES OF AMERICA, INC.**
 **(formerly
      Advanced Bio/Chem, Inc.)**


**Statements
      of Operations**


**(unaudited)**


**(restated)**




**Three
                  Months Ended****September
                  30, 2004**
              
              **September
                  30, 2003**Revenues
              
              
              
              
              $
                  -
              
              $
                  25,399Expenses:Selling,
                  general & administrative
              118,549
              
              79,807Salaries
                  and contract labor
              31,000
              
              1,029,094Depreciation
                  and amortization
              -
              
              23,318Legal
                  and professional fees
              500
              
              83,497Total
                  Expenses
              
              
              $
                  150,049
              
              $
                  1,215,716(Loss)
                  from operations
              $
                  (150,049)
              
              $
                  (1,190,317)Interest
                  expense
              
              
              2,013
              
              54,249Net
                  income (loss)
              
              $
                  (152,062)
              
              $
                  (1,244,566)Net
                  income (loss) per share basic and diluted
              $
                  (0.01)
              
              $
                  (0.15)Weighted
                  average number of common shares outstanding
              15,186,421
              
              8,543,818








**See
                accompanying footnotes to financial statements.**
              F-2







**INDUSTRIAL
        ENTERPRISES OF AMERICA, INC.**
 **(formerly
      Advanced Bio/Chem, Inc.)**


**Statements
      of Cash Flows**


**(unaudited)**


**(restated)**


**Three
                    Months Ended****September
                    30,**
                  **2004**
                
                **September
                    30,**
                  **2003**Net
                    income (loss)
                $
                    (152,062)
                
                $
                    (1,244,566)Non-cash
                    itemsDepreciation
                    and amortization
                -
                
                23,318Allowance
                    for doubtful account
                97,716
                
                -Stock
                    based compensation
                -
                
                660,000Net
                    changes in working capital accountsAccounts
                    receivable
                -
                
                (2,755)Due
                    from Power 3 Medical Products, Inc.
                (143,911)
                
                -Prepaid
                    expenses
                -
                
                966Accounts
                    payable
                -
                
                82,717Bank
                    credit card debt
                -
                
                (560)Accrued
                    interest
                -
                
                31,995Accrued
                    interest related parties
                2,013
                
                12,096Accrued
                    expenses
                -
                
                216,859Deferred
                    revenues
                -
                
                (5,000)Net
                    cash used by operating activities
                (196,244)
                
                (224,930)Financing
                    activitiesProceeds
                    from bank line of credit
                -
                
                20,562Payments
                    towards bank line of credit
                -
                
                (14,892)Proceeds
                    from issuance of debt
                -
                
                55,000Principal
                    payments on notes payable
                -
                
                (1,658)Proceeds
                    from note payable shareholders and related parties
                50,000
                
                -Proceeds
                    from issuance of common stock
                98,475
                
                32,000Stock
                    subscriptions
                50,000
                
                100,000Net
                    cash provided by Financing Activities
                $
                    198,475
                
                $
                    191,012Net
                    cash increase for period
                $
                    2,231
                
                $
                    (33,918)Cash
                    at beginning of period
                34,459
                
                68,171Cash
                    at end of period
                $
                    36,690
                
                $
                    34,253SUPPLEMENTAL
                    DISCLOSURES RELATED TO CASH FLOWS:Interest
                    paid
                $
                    -
                
                $
                    58,827SUPPLEMENTAL
                    SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:Debt
                    converted to common stock
                $
                    -
                
                $
                    10,000Accrued
                    interest converted to stock
                $
                    -
                
                $
                    2,487Accrued
                    interest - notes payable capitalized
                $
                    -
                
                $
                    13,354Accrued
                    interest - notes payable shareholders capitalized
                $
                    -
                
                $
                    19,248Stock
                    issued for services
                $
                    -
                
                $
                    660,000




**See
                accompanying footnotes to financial statements.**
              F-3





**INDUSTRIAL
      ENTERPRISES OF AMERICA, INC.**


**(formerly
      Advanced Bio/Chem, Inc.)**


**Notes
      to Interim Financial Statements**


**(restated)**





**Note
          1 - Basis of presentation**
 
 Effective
          April, 2003, the Company elected to file as a non-reporting entity in accordance
          with Rule 12g-4 of the Securities Exchange Act of 1934. The Company has
          currently elected to reinstate as a filing entity and, as such, reference
          to
          year-end financial statements should be referred to the Company’s Form 10-KSB
          for the fiscal year ended June 30, 2004.
 
 The
          condensed financial statements included herein have been prepared by the
          Company
          pursuant to the rules and regulations of the Securities and Exchange Commission.
          Certain information and footnote disclosures normally included in financial
          statements prepared in accordance with generally accepted accounting principles
          have been condensed or omitted pursuant to such rules and regulations,
          although
          the Company believes that the disclosures are adequate to make the information
          presented not misleading.
 
 These
          statements reflect all adjustments, consisting of normal recurring adjustments,
          which, in the opinion of management, are necessary for fair presentation
          of the
          information contained therein. It is recommended that these condensed financial
          statements be read in conjunction with the financial statements and notes
          thereto included in the Company’s June 30, 2004 Form 10-KSB.
 
 Results
          of operations for the interim periods are not indicative of annual results.
 
 **Note
          2 - Restatement of financial statements due to accounting
          error**
 
 After
          lengthy discussions with the Securities and Exchange Commission personnel
          and
          the Company’s auditors, the Company has determined that it should restate the
          financial statements for the three months ended September 30, 2004, due
          to an
          error in recording the sale of its operating assets under the equity method
          of
          accounting instead of recording the transaction as an arms length transaction
          recognizing the fair market value of the securities received in the transaction
          during the fiscal year ended June 30, 2004, the transition period. (See
          Footnote 12 - Mergers and Acquisitions.) The effect of the change required
          a restatement of the September 30, 2004, financial statements in order
          to
          properly reflect the asset value and the related adjustment to current
          and prior
          period earnings. The effect of this change was to increase the net loss
          for the
          period ended September 30, 2004, by $34,971, increase assets by $33,304,275,
          decrease total liabilities by $2,691,791, and increase shareholders’ equity by
          $35,996,066.
 **Note
            3 - Going concern**
 
 As
            shown
            in the accompanying financial statements, the Company has incurred recurring
            losses from operations. This raises substantial doubt about the Company’s
            ability to continue as a going concern. Management is seeking business
            opportunities as discussed in Note 13 - Subsequent Events. Management
            believes
            these factors will contribute toward achieving profitability. The accompanying
            financial statements do not include any adjustments that might be necessary
            if
            the Company is unable to continue as a going concern.
  **Note 4
          - Earnings per share**
 
 Basic
          earnings per share (EPS) includes dilution and is determined by dividing
          income
          available to common stockholders by the weighted average number of shares
          of
          common stock outstanding. Diluted EPS reflects the potential dilution that
          could
          occur if options and other contracts to issue shares of common stock were
          exercised or converted into common stock. There are no warrants or options
          outstaned as of September 30, 2004 and September 30, 2003.
  F-4
  
 **Note 5
          - Stock based compensation**
 
 As
          permitted under generally accepted accounting principles, stock-based awards
          granted to employees are accounted for following APB 25. Accordingly, the
          Company has not recognized compensation expense for its stock-based awards
          to
          employees. Outlined below are pro forma results had compensation costs
          for the
          Company’s stock-based compensation plans been determined based on the fair value
          approach of SFAS 123.
 
 For
                      the Three Months Ended
                    September
                      30th2004
                  
                  2003Net
                      income (loss), as reported
                  $(152,062)
                  
                  $(1,244,566)Less
                      compensation cost determined under the fair value method
                  -
                  
                  -Pro
                      forma net income (loss)
                  $(152,062)
                  
                  $(1,244,566)
 
 Basic
                    and dilutive (loss) per share:As reported
                $
                    (0.01)
                
                $
                    (0.15)Pro forma
                $
                    (0.01)
                
                $
                    (0.15)
 
 These
          pro
          forma amounts may not be representative of future disclosures since the
          estimated fair value of stock options is amortized to expense over the
          vesting
          period and options may be granted in future years.
 
 Steven
          Rash, former CEO, was granted 825,000 shares of common stock at $0.80 per
          share
          for a charge of $660,000 against operations for the quarter ended September
          30,
          2003. In addition, pursuant to Mr. Rash’s September 5, 2003, employment
          contract, an option agreement for an additional 200,000 shares at the exercise
          price of $0.80 was promised, but as yet not executed. No charge to current
          operations has been made for the unexecuted option. These options are not
          anticipated to be executed.
 
 Kamy
          Behzadi, former Vice-President Product and Business Development, was granted
          500,000 shares of common stock on May 13, 2004, for a charge of $500 against
          operations for the quarter ended June 30, 2004. Mr. Behzadi resigned from
          the
          Company effective May 16, 2004, and accepted a similar position with Power
          3
          Medical Products, Inc. (See additional footnote disclosure for Power 3
          at
          Footnote 12, Mergers and Acquisitions.)
 
 Disclosures
          required by Statement of Financial Accounting Standards No. 123, "Accounting
          for
          Stock-Based Compensation" ("SFAS No. 123"), including pro forma operating
          results had the Company prepared its financial statements in accordance
          with the
          fair value based method of accounting for stock-based compensation prescribed
          therein are shown below. Exercise prices and weighted-average contractual
          lives
          of stock options outstanding as of September 30, 2004 are as follows:
 
 Options
                    Outstanding
                
                Options
                    ExercisableWeighted
                    Average
                
                Weighted
                    Average
                
                
                
                Weighted
                    AverageExercise
                    Prices
                
                Number
                    Outstanding
                
                Remaining
                    Contractual Life
                
                Exercise
                    Prices
                
                Number
                    Exercisable
                
                Exercise
                    Price$0.00
                
                -0-
                
                -0-
                
                $0.00
                
                -0-
                
                $0.00
 
  F-5
  Summary
          of Options Granted and Outstanding:
 
 For
                    the three months ended September 302004
                
                2003Shares
                
                Weighted
                    Average Exercise Price
                
                Shares
                
                Weighted
                    Average Exercise PriceOptions:Outstanding at beginning of period
                
                200,000
                
                $
                    0.80
                
                -
                
                $
                    -Granted
                
                -
                
                $
                    -
                
                200,000
                
                $
                    0.80Cancelled
                
                (200,000)
                
                $
                    (0.80)
                
                -
                
                $
                    -Outstanding at end of period
                
                -
                
                $
                    -
                
                200,000
                
                $
                    0.80
 
 The
          following table summarizes the pro forma operating results of the Company
          for
          September 30, 2004, had compensation costs for the stock options granted
          to
          employees been determined in accordance with the fair value based method
          of
          accounting for stock based compensation as prescribed by SFAS No. 123.
  Proforma net income (loss) available
                  to
                  common stockholders
                
                $ (152,062)Proforma basic and diluted loss
                  per
                  share
                
                $
                  (0.01)
  A
            summary
            of warrant activity for the three months ended September 30, 2004, is
            as
            follows:
 
 Number
                      of Warrants
                  
                  Weighted
                      Average Exercise Price
                  
                  Warrants
                      Exercisable
                  
                  Weighted
                      Average Exercise PriceOutstanding
                      at June 30, 2004
                  
                  2,500,000
                  
                  $
                      0.50
                  
                  2,500,000
                  
                  $0.50Warrants
                      cancelled
                  
                  (2,500,000)
                  
                  $(0.50)
                  
                  (2,500,000)
                  
                  $(0.50)Granted
                  
                  -
                  
                  -
                  
                  -
                  
                  -Outstanding
                      at September 30, 2004
                  
                  -
                  
                  
                  
                  -
 **Note 6
          - Shareholder and related party debt**
 
 The
          Company received $50,000 convertible debt from a shareholder. The note
          bears
          interest at the rate of 18% and matures October 18, 2005. There was an
          outstanding balance as of September 30, 2004, of $50,000. The
          note
          is convertible into the Company’s common stock, par value $.001 per share at the
          lesser of (i) $0.10 per share or (ii) sixty-five (65%) percent of the average
          closing price of the common shares for the five (5) trading days prior
          to the
          date of the conversion provided, however, the Payee does not become the
          beneficial owner of ten (10%) percent or more of the voting securities
          of the
          Company, or otherwise be considered an “affiliate” of the Company. The Company
          shall not be obligated to issue the common stock in such an
          event.
  The
          Company recorded interest expense totaling $2,013 and $54,249 for the three
          months ended September 30, 2004 and 2003, respectively.
 F-6
  **Note
            7 - Due from Power 3 Medical Products, Inc.**
 
 In
            May
            2004, the Company entered into an Asset Purchase Agreement (the “Agreement”),
            among the Company, Power3, and Steven B. Rash and Ira Goldknopf (collectively,
            the "Shareholders"). The sale was approved by the Company’s shareholders by
            proxy. As provided in the Agreement, the Company sold to Power3 all of
            the
            Company’s assets in consideration for 15,000,000 shares of the common stock,
            par
            value $.001 per share, of Power3. The assets disposed of by the Company
            included
            all tangible personal property, intellectual property, rights in contracts
            that
            the Company is a party to, along with intangible property, including
            goodwill.
            In consideration for the benefits that they received by virtue of the
            transaction, each of the Shareholders agreed to make the representations,
            warranties, and indemnifications in the Agreement jointly and severally,
            along
            with the Company, and each of the Shareholders agreed to enter into and
            be bound
            by a Non-Competition Agreement and an Employment Agreement containing,
            among
            other things, covenants respecting confidentiality, non-competition and
            non-solicitation. The terms of the Agreement were determined by arms'
            length
            negotiations between the parties. Various amounts were expended subsequent
            to
            the transaction that are deemed to be the responsibility of Power3 et
            al. The
            total of those amounts are $97,715. Due to the nature of the ongoing
            discussions
            with the management team at Power3, this receivable has been determined
            to be
            impaired and a like amount has been recorded as Bad Debt.
  **Note 8
          - Changes in common shares outstanding**
 
 Included
          in the table below are the changes in common shares since June 30, 2004.
          See
          Note 12 for discussion of mergers and acquisitions affecting common
          shares.
 
 CommonSharesOutstanding
                    common shares at June 30, 2004
                15,384,275Stock
                    issued for cash
                193,475Stock
                    issued for services
                3,000,000Outstanding
                    common shares at September 30, 2004
                18,577,750
 **Note
            9 - Stock subscriptions**
 
 A
            subscription for 1,000,000 shares of the common stock of the Company
            at $0.05
            has been paid. Also, a debt of $43,689 incurred during the year ended
            June 30,
            2004, was agreed to be converted to common stock. In addition, services
            valued
            at $3,800 rendered under consulting agreements during the fiscal year
            ended June
            30, 2004, are to be settled with common stock. As of 09-30-04, the total
            value
            of these subscriptions for common stock was $97,489 .
 F-7
 **Note 10
          - **Investment
          in common stock****
 The
            following table shows the Company’s fair market value method of investments’
gross unrealized gains and fair value, aggregated by length of time that
            individual securities have been in a continuous unrealized gain position,
            at
            September 30, 2004:
 
 Less
                      Than 12 Months
                  
                  12
                      Months or More
                  
                  TotalDescription
                      of Securities
                  
                  Fair
                      Value
                  
                  Unrealized
                      Gains
                  
                  Fair
                      Value
                  
                  Unrealized
                      Losses
                  
                  Fair
                      Value
                  
                  Unrealized
                      GainsInvestments
                      in equity securities carried at fair market value
                  
                  $33,450,000
                  
                  $19,950,000
                  
                  $
                      -0-
                  
                  $
                      -0-
                  
                  $33,450,000
                  
                  $19,950,000
 
 The
            aggregate fair market value of the Company’s investments totaled $33,450,000 at
            September 30, 2004. The investments were evaluated for impairment pursuant
            to
            FAS-107, *Disclosures
            about Fair Value of Financial Instruments* ,
            and the Company did not identify any events or changes in circumstances
            that may
            have had a significant adverse effect on the fair value of those investments.
 
 **Note
            11 - Unrealized securities gains**
 
 The
            Company classifies its debt and marketable equity securities into
            held-to-maturity, trading, or available-for-sale categories. Debt securities
            are
            classified as held-to-maturity when the Company has the positive intent
            and
            ability to hold the securities to maturity. Debt securities for which
            the
            Company does not have the intent or ability to hold to maturity are classified
            as available for sale. Held-to-maturity securities are recorded as either
            short-term or long-term on the balance sheet based on contractual maturity
            date
            and are stated at amortized cost. Marketable securities that are bought
            and held
            principally for the purpose of selling them in the near term are classified
            as
            trading securities and are reported at fair value, with unrealized gains
            and
            losses recognized in earnings. Debt and marketable equity securities
            not
            classified as held-to-maturity or as trading are classified as
            available-for-sale and are carried at fair market value, with the unrealized
            gains and losses, net of tax, included in the determination of comprehensive
            income and reported in shareholders’ equity. The fair value of substantially all
            securities is determined by quoted market prices. The estimated fair
            value of
            securities for which there are no quoted market prices is based on similar
            types
            of securities that are traded in the market. Gains or losses on securities
            sold
            are based on the specific identification method.
 
 **Note
            12 - Mergers and acquisitions**
 
 On
            May 5, 2003, the Company and GESJ, Inc. (“GESJ”), a Texas corporation, owned by
            four officers of the Company, entered into an agreement and plan of merger
            in
            which GESJ merged into the Company in a tax-free exchange of shares.
            1,903,000
            shares of common stock of the Company were exchanged for all the issued
            and
            outstanding shares of GESJ. The Company continued as the surviving entity.
            The
            purpose of the merger was to acquire the management team of GESJ. GESJ
            had no
            assets or liabilities as of the merger date. The Company has not recorded
            the
            transaction as stock issued for compensation to the officers involved
            due to the
            cancellation of the shares.
 F-8
 On
            June 12, 2003, the Company’s directors approved a merger with Ciro
            International, Inc. (“Ciro”), a Nevada Corporation, whereby the Company would be
            the surviving entity in a reverse acquisition with Ciro, a public shell
            company.
            For accounting purposes, the combination was treated as an issuance of
            shares
            for cash by the Company and has not been considered a business
            combination.
 
 On
            May 18, 2004, all fixed assets and intellectual property were acquired
            by Power
            3 Medical Products, Inc. (Power 3), a Nevada corporation, for 15,000,000
            restricted shares of Power 3 common stock, plus employment of certain
            of the
            Company’s employees, and assumption of liabilities of the Company.
 
 **Note 13
          - Subsequent events**
 
 On
          October 7, 2004, the Company’s Board of Directors approved a merger with EMC
          Packaging, Inc. whereby the Company would be the surviving entity in a
          reverse
          acquisition. In consideration for each EMC share, the EMC stockholders
          received
          an aggregate of 2,296,800 shares of the Company’s common stock valued at
          $808,474. For accounting purposes, the merger has not been considered a
          business
          combination.
  
 F-9