Ownership Submission
FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person *
Cappel Kenneth
 2. Issuer Name and Ticker or Trading Symbol
INTERPHARM HOLDINGS INC [IPA] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Executive VP/General Counsel
(Last)
(First)
(Middle)

75 ADAMS AVENUE		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
06/30/2006
(Street)


HAUPPAUGE, NY 11788		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option to Purchase Common Stock $ 1.23 (1)     3     02/11/2005 06/30/2010 Common Stock
40,000
  40,000
D
 
Option to Purchase Common Stock $ 1.23 (1)     3     02/28/2006 06/30/2010 Common Stock
22,000
  22,000
D
 
Option to Purchase Common Stock $ 1.23 (1)     3     02/28/2007 06/30/2010 Common Stock
22,000
  0
D
 
Option to Purchase Common Stock $ 1.23 (1)     3     02/28/2008 06/30/2010 Common Stock
22,000
  0
D
 
Option to Purchase Common Stock $ 1.23 (1)     3     02/28/2009 06/30/2010 Common Stock
22,000
  0
D
 
Option to Purchase Common Stock $ 1.23 (1)     3     02/28/2010 06/30/2010 Common Stock
22,000
  0
D
 
Option to Purchase Common Stock $ 1.23 06/30/2005   A4 19,125   07/01/2006 06/30/2012 Common Stock
19,125
$ 1.23 19,125
D
 
Option to Purchase Common Stock $ 1.23 06/30/2005   A4 19,125   07/01/2007 06/30/2012 Common Stock
19,125
$ 1.23 0
D
 
Option to Purchase Common Stock $ 1.23 06/30/2005   A4 19,125   07/01/2008 06/30/2012 Common Stock
19,125
$ 1.23 0
D
 
Option to Purchase Common Stock $ 1.23 06/30/2005   A4 19,125   07/01/2009 06/30/2012 Common Stock
19,125
$ 1.23 0
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
Cappel Kenneth
75 ADAMS AVENUE
HAUPPAUGE, NY 11788		       Executive VP/General Counsel  

Signatures

Kenneth Cappel 10/11/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Such options were originally granted at an exercise price of $1.94 per share, but the exercise price was reset to $1.23 per share.

Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

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