**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**




ý QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the quarterly period ended June 30, 2006**





**OR**




 ̈ TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


**SECURITIES
      EXCHANGE ACT OF 1934**





**Commission
      File Number**


**0-19562**





**BERMAN
      CENTER, INC.**


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





**Delaware**
              (State
                or other jurisdiction of incorporation or organization)
            
            **58-1865733**
              (I.R.S.
                Employer Identification No.)**211
                EAST ONTARIO, SUITE 800,**
              **CHICAGO,
                ILLINOIS**
            
            **60611**(Address
                of principal executive offices)
            
            (Zip
                Code)





**(312)
      255-8088**


(Registrant’s
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past 90 days. Yes ý No  ̈




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes  ̈ No ý




There
      were 32,693,599 shares (excluding Escrow Shares, as defined below) outstanding
      of registrant’s common stock, par value $.001 per share, as of July 31,
      2006.




Transitional
      Small Business Disclosure Format (check one):    
Yes  ̈ No ý













**BERMAN
      CENTER, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**FORM
      10-QSB QUARTERLY REPORT**





**TABLE
      OF CONTENTS**





**Page**PART
                I - FINANCIAL INFORMATION
            
            3ITEM
                1.
            
            FINANCIAL
                STATEMENTS
            
            3Consolidated
                Balance Sheet as of June 30, 2005 (unaudited)
            
            3Consolidated
                Statements of Operations for the Three Months and Six Months ended
                June
                30, 2006 and 2005 and period from Inception to June 30,
                2006
            
            4Consolidated
                Statement of Cash Flows for the Six Months ended June 30, 2006 and
                2005,
                and period from Inception to June 30, 2006
            
            5Notes
                to the Consolidated Financial Statements
            
            6ITEM
                2.
            
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATION
            
            19ITEM
                3.
            
            CONTROLS
                AND PROCEDURES
            
            29PART
                II - OTHER INFORMATION
            
            30ITEM
                1.
            
            LEGAL
                PROCEEDINGS
            
            30ITEM
                2.
            
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            
            30ITEM
                3.
            
            DEFAULTS
                UPON SENIOR SECURITIES
            
            30ITEM
                4.
            
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            30ITEM
                5.
            
            OTHER
                INFORMATION
            
            30ITEM
                6.
            
            EXHIBITS
            
            31SIGNATURES
            
            32




2




**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**





**BERMAN
                CENTER, INC.****(A
                development stage company)****CONSOLIDATED
                BALANCE SHEET****As
                of June 30, 2006****(unaudited)**


****
              ****
              **June
                    30,**
                **2006****Assets****Current
                  Assets:**Cash
              
              $
              614,890Accounts
                  Receivable
              
              
              5,421Deposits
              
              
              165,250Inventory
              
              
              11,555Prepaid
                  Expenses
              
              
              98,967Total
                  Current Assets
              
              
              896,083Property
                  and Equipment:Furniture
              
              
              190,587Leasehold
                  Improvements
              
              
              253,786Equipment
              
              
              412,910Property
                  and Equipment - Gross
              
              
              857,283Less:
                  Accumulated Depreciation
              
              
              (345,391
              )**Property
                  and Equipment - Net**
              
              
              511,892**Total
                  Assets**
              
              $
              1,407,975**Liabilities
                  and Stockholders’ Equity****Current
                  Liabilities:**Accounts
                  Payable
              
              $
              313,115Deferred
                  Revenue
              
              
              26,125Accrued
                  Expenses
              
              
              579,863Deferred
                  Rent
              
              
              159,091Capital
                  Lease - Current
              
              
              11,572Total
                  Current Liabilities
              
              
              1,089,766**Long-Term
                  Liabilities:**Capital
                  Lease - Non-Current
              
              
              9,177Total
                  Long-Term Liabilities
              
              
              9,177**Total
                  Liabilities**
              
              
              1,098,943**Stockholders’
                  Equity:**Preferred
                  Stock, $0.001 par value 25,000,000 shares authorized0
                  shares outstanding at June 30, 2006
              
              
              0Common
                  Stock, $0.001 par value, 100,000,000 shares authorized32,693,599
                  shares outstanding at June 30, 2006
              
              
              32,693Additional
                  paid-in Capital
              
              
              5,584,905Deficit
                  Accumulated in the Development Stage
              
              
              (5,308,566
              )Total
                  Stockholders’ Equity
              
              
              309,032**Total
                  Liabilities and Stockholders’ Equity**
              
              $
              1,407,975




**The
      accompanying notes are an integral part of these financial
      statements.**




3




**BERMAN
                CENTER, INC.****(A
                development stage company)****CONSOLIDATED
                STATEMENTS OF OPERATIONS****For
                the Three Months and Six Months Ended June 30, 2006 and 2005 (unaudited)
                and****For
                the Period from January 16, 2003 (inception) to June 30, 2006
                (unaudited)**




****
              ****
              **For
                    The Three**
                **Months
                    Ended**
                **June
                  30, 2006**
              ****
              **For
                    The Three**
                **Months
                    Ended**
                **June
                  30, 2005**
              ****
              **For
                    The Six**
                **Months
                    Ended**
                **June
                  30, 2006**
              ****
              **For
                    The Six**
                **Months
                    Ended**
                **June
                  30, 2005**
              ****
              **For
                      the period**
                  **January
                    16, 2003**
                **(Inception)**
                **through**
                **June
                  30, 2006****Revenue**-
                  Clinics
              
              
              
              
              $
              110,999
              
              $
              142,934
              
              $
              228,609
              
              $
              247,430
              
              $
              1,420,400-
                  Seminars and conferences
              
              
              
              
              
              193,375
              
              
              -
              
              
              193,375
              
              
              -
              
              
              660,600-
                  Research, studies and trials
              
              
              
              
              
              -
              
              
              -
              
              
              177,500
              
              
              -
              
              
              424,686-
                  Radio advertising
              
              
              
              
              
              -
              
              
              -
              
              
              -
              
              
              50,000
              
              
              50,000-
                  Publishing
              
              
              
              
              
              427
              
              
              -
              
              
              172,402
              
              
              -
              
              
              174,499-
                  Television
              
              
              
              
              
              116,687
              
              
              -
              
              
              236,073
              
              
              -
              
              
              246,534-
                  Royalty
              
              
              
              
              
              20,668
              
              
              -
              
              
              53,571
              
              
              -
              
              
              83,591-
                  Other
              
              
              
              
              
              31,000
              
              
              -
              
              
              43,000
              
              
              -
              
              
              43,000Total
                  Revenue
              
              
              
              
              
              473,157
              
              
              142,934
              
              
              1,104,530
              
              
              297,430
              
              
              3,103,310**Cost
                  of Services:**Clinics
              
              
              
              
              
              155,893
              
              
              117,652
              
              
              309,725
              
              
              215,379
              
              
              1,717,953Seminars
                  and conferences
              
              
              
              
              
              425,690
              
              
              -
              
              
              425,690
              
              
              -
              
              
              844,895Research,
                  studies and trials
              
              
              
              
              
              -
              
              
              1,225
              
              
              69,320
              
              
              1,725
              
              
              315,059Total
                  Cost of Services
              
              581,583
              
              
              118,877
              
              
              804,735
              
              
              217,104
              
              
              2,877,907**Gross
                  Profit / (Loss)**
              
              
              
              
              
              (108,426
              )
              
              24,057
              
              
              299,795
              
              
              80,326
              
              
              225,403**Selling,
                  General & Administrative Expenses**
              
              474,169
              
              
              814,326
              
              
              941,966
              
              
              1,217,842
              
              
              5,492,492**Loss
                  from Operations**
              
              (582,594
              )
              
              (790,269
              )
              
              (642,171
              )
              
              (1,137,516
              )
              
              (5,267,089
              )**Interest
                  Expense**
              
              685
              
              
              40,493
              
              
              984
              
              
              40,493
              
              
              41,477**Net
                  Loss**
              $
              (583,280
              )
              $
              (830,761
              )
              $
              (643,154
              )
              $
              (1,178,008
              )
              $
              (5,308,567
              )**Basic
                  and Diluted Loss Per Share**
              $
              (0.02
              )
              $
              (0.04
              )
              $
              (0.02
              )
              $
              (0.06
              )**Weighted-Average
                  Shares Outstanding**
              
              31,501,933
              
              
              21,167,763
              
              
              31,452,555
              
              
              19,562,516




**The
      accompanying notes are an integral part of these financial
      statements.**




4




**BERMAN
                CENTER, INC.****(A
                development stage company)****CONSOLIDATED
                STATEMENT OF CASH FLOWS****For
                the Six Months Ended June 30, 2006 and 2005 (unaudited)
                and****For
                the period from January 16, 2003 (inception) to June 30, 2006
                (unaudited)**





****
            **For
                  the Six**
              **Months
                  Ended**
              **June
                  30, 2006**
              **(unaudited)**
            ****
            **For
                  the Six**
              **Months
                  Ended**
              **June
                  30, 2005**
              **(unaudited)**
            ****
            **For
                  the Period**
              **from
                  January 16,**
              **2003**
              **(inception)
                  to**
              **June
                  30, 2006**
              **(unaudited)****Cash
                flows from Operating Activities:**Net
                Loss
            
            $
            (643,154
            )
            $
            (1,178,008
            )
            $
            (5,308,567
            )Adjustments
                to Reconcile Net Loss to Net Cash Used in Operating
                Activities:Depreciation
                and Amortization
            
            
            78,649
            
            
            65,039
            
            
            345,392Issuance
                of Shares for Compensation
            
            
            -
            
            
            95,000
            
            
            120,000(Increase)
                Decrease inAccounts
                Receivable
            
            
            5,041
            
            
            3,100
            
            
            (5,420
            )Deposits
            
            
            56,313
            
            
            (15,000
            )
            
            (165,251
            )Prepaid
                Expenses and Other Current Assets
            
            
            (25,418
            )
            
            (66,431
            )
            
            (98,967
            )Inventory
            
            
            (4,828
            )
            
            2,051
            
            
            (11,555
            )Increase
                (Decrease) inAccounts
                Payable
            
            
            142,005
            
            
            118,651
            
            
            303,012Deferred
                Revenue
            
            
            (178,283
            )
            
            38,243
            
            
            29,506Accrued
                Expenses
            
            
            33,425
            
            
            6,576
            
            
            87,258Deferred
                Rent
            
            
            16,152
            
            
            38,435
            
            
            159,469Net
                Cash Used in Operating Activities
            
            
            (520,098
            )
            
            (892,344
            )
            
            (4,545,127
            )**Cash
                Flows from Investing Activities:**Purchase
                of Property and Equipment
            
            
            -
            
            
            (21,895
            )
            
            (811,051
            )Net
                Cash Used in Investing Activities
            
            
            -
            
            
            (21,895
            )
            
            (811,051
            )**Cash
                Flows from Financing Activities:**Proceeds
                from Issuance of Common Stock
            
            
            388,750
            
            
            2,878,321
            
            
            5,996,552Payments
                on Capital Leases
            
            
            (6,849
            )
            
            -
            
            
            (25,484
            )Net
                Cash Provided by Financing Activities
            
            
            381,901
            
            
            2,878,321
            
            
            5,971,068Net
                Increase (Decrease) in Cash and Cash Equivalents
            
            
            (138,197
            )
            
            1,964,082
            
            
            614,890**Cash
                and Cash Equivalents, Beginning of Period**
            
            
            753,087
            
            
            242,435
            
            
            -**Cash
                and Cash Equivalents, End of Period**
            
            $
            614,890
            
            $
            2,206,517
            
            $
            614,890


**Supplemental
        schedule of non-cash investing and financing
        activities**


During
        the year ended December 31, 2004, the Company issued 628,458 shares as
        compensation to some members of the Board of Directors, valued at $120,000.
        The
        shares were issued as compensation for services performed. During the six
        months
        ended June 30, 2006 and June 30, 2005, $0 and $95,000 was amortized to
        compensation expense, respectively.




**The
      accompanying notes are an integral part of these financial
      statements.**




5





**BERMAN
      CENTER, INC.**


**(A
      development stage company)**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**




**NOTE
      1 - ORGANIZATION AND LINE OF BUSINESS**





Berman
      Center, Inc. and subsidiaries (the “Company”) (a development stage company),
      headquartered in Chicago, Illinois, is a specialized health center for women
      focused on female sexual health. The Company operates through its wholly owned
      subsidiary, Berman Health and Media, Inc. (“BHM”). Dr. Laura Berman, the
      Company’s President, is a researcher in the field of women's sexual health. Dr.
      Berman, who is not a physician, earned her Master's in Clinical Social Work
      and
      Doctorate in Health Education and Therapy (specializing in human sexuality)
      at
      New York University. Berman Center is attempting to leverage Dr. Berman’s
      credentials by creating a portfolio of branded related products and services
      that are marketed through a diversified media platform.





Effective
      July 27, 2006, the medical services portion of the clinic’s business is being
      discontinued and the focus shifts to talk therapy and individual and couples
      therapy retreats. There will be a decrease in clinic revenue as a result of
      this
      change along with a decrease in clinic costs and expenses. It is management’s
      intention to shift the emphasis of the clinic’s business to talk therapy and
      expand these clinic services and to increase clinic revenue by expanding talk
      therapy services and individual and couples therapy retreats.





**NOTE
      2 - THE MERGER**





On
      June
      16, 2005, LBC MergerSub, Inc., a Nevada corporation and wholly owned subsidiary
      of the Company, merged with and into BHM pursuant to an Agreement and Plan
      of
      Merger dated as of June 3, 2005. Pursuant to the merger (the “Merger”), BHM
      became a wholly owned subsidiary of the Company and the issued and outstanding
      shares of common stock of BHM were converted into an aggregate of 19,730,504
      shares of common stock of the Company. After the Merger, the former BHM
      stockholders owned approximately 87% of the Company’s issued and outstanding
      Common Stock, with the Company’s existing stockholders continuing to own the
      remaining 13% of the Company’s issued and outstanding common stock after the
      Merger. Following the Merger, the business conducted by the Company is the
      business conducted by BHM prior to the Merger.




As
      a
      result of the Merger, the 400,000 issued and outstanding warrants and 204,578
      issued and outstanding stock options of BHM became exercisable to purchase
      614,400 shares and 314,230 shares of the Company’s Common Stock, respectively,
      at an exercise price of $0.21 per share and $0.19 per share, respectively.
      No
      other terms of the warrants and options were changed as a result of the
      Merger.




The
      Merger was accounted for as a reverse merger under generally accepted accounting
      principles. Therefore: (1) the Company’s historical accumulated deficit for
      periods prior to June 16, 2005 were eliminated against
      additional-paid-in-capital, and (2) the consolidated financial statements
      present the previously issued shares of common stock of the Company as having
      been issued pursuant to the Merger on June 3, 2005, and the shares of common
      stock of the Company issued to the former BHM stockholders in the Merger as
      having been outstanding since January 16, 2003 (the inception of BHM). No
      goodwill or other intangible asset was recorded as a result of the Merger.
      As
      part of the merger, Berman Center, Inc. assumed $498,000 in accrued expenses
      of
      LB Center.




6




BHM
      was
      formed on January 16, 2003 and operated as a privately held Delaware limited
      liability company under the name Berman Center LLC until June 2, 2005, when
      it
      reorganized into corporate form under the name The Berman Center, Inc., in
      accordance with the provisions of the Delaware Limited Liability Company Act.
      On
      June 20, 2005, the Company changed the name of The Berman Center, Inc. to Berman
      Health and Media, Inc.





**NOTE
      3 - GOING CONCERN**





The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America, which
      contemplate continuation of the Company as a going concern. During the six
      months ended June 30, 2006, the Company incurred a net loss of $643,154
      (unaudited) and had negative cash flows from operations of $520,098 (unaudited).
      In addition, the Company had an accumulated deficit of $5,308,567 (unaudited)
      at
      June 30, 2006. These factors raise substantial doubt about the Company’s ability
      to continue as a going concern.





Recovery
      of the Company’s assets is dependent upon future events, the outcome of which is
      indeterminable. Management plans to continue to provide for its capital needs
      during the year ended December 31, 2006 by issuing debt and equity securities
      and by the continued development of its business. The financial statements
      do
      not include any adjustments relating to the recovery and classification of
      recorded asset amounts or amounts and classification of liabilities that might
      be necessary should the Company be unable to continue in existence.





**NOTE
      4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Principles
      of Consolidation


The
      consolidated financial statements include the accounts of Berman Center, Inc.
      and its wholly-owned subsidiary Berman Health and Media, Inc. In addition,
      the
      consolidated financial statements of Berman Center, Inc. include the accounts
      of
      LB Center, Inc., as described in Note 2. All significant inter-company accounts
      and transactions are eliminated in consolidation.





Basis
      of Presentation


These
      consolidated financial statements have been prepared in accordance with 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 in the
      United States of America have been condensed or omitted pursuant to such rules
      and regulations. These consolidated financial statements should be read in
      conjunction with the consolidated financial statements and the notes thereto
      included in the Company’s Annual Report on Form 10-KSB for the year ended
      December 31, 2005.





Development
      Stage Enterprise


The
      Company is a development stage company as defined in Statement of Financial
      Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
      Stage Enterprises." The Company is devoting substantially all of its present
      efforts to establish a new business, and its planned principal operations have
      not yet commenced. All losses accumulated since inception has been considered
      as
      part of the Company's development stage activities.





Revenue
      Recognition


Revenues
      are recognized when realized or realizable and earned. Patients at the clinic
      are required to pay on the day of their appointment (at the point of service).
      Patients are allowed to pay either with cash, check or credit card. Items for
      bad debt or returned or rejected credit cards are very minimal and are recorded
      as they occur. If the clinic changed its policy in the future and granted credit
      to its patients, a review of the current procedures would be necessary and
      allowances for bad debt write-offs would be warranted.




7




Costs
      for
      these revenues constitute primarily outside lab fees and internal payroll
      expenses for clinical staff. These costs are recognized as they are
      incurred.




Revenue
      related to the hosting of CPE seminars for clinicians is recognized once the
      seminar has been conducted. Costs for these revenues consist primarily of hotel
      charges for the rooms and audio visual equipment as well as payments of
      honorariums to speakers at the seminar. Costs for these revenues are also
      recognized once the seminar has been conducted.




Revenue
      related to the publishing of books is recognized when the book is released
      by
      the publisher. Costs for these revenues consist primarily of internal payroll
      expenses for a staff writer. These costs are recognized as they are
      incurred.




Revenue
      related to research and clinic or (clinical) trials is recognized when the
      work
      is complete. Because of the nature of the contracts, which generally require
      the
      Company to release the results of their studies when complete, release of the
      results of the clinical research is the indicator that the Company uses to
      measure delivery and acceptance of the related services. Therefore, recognition
      of revenue prior to release would be precluded. Costs for these revenues
      constitute primarily research expenses paid to outside contractors. These costs
      are also recognized as they are incurred.




From
      time
      to time, the Company and its executives may be compensated for performing
      certain media appearances. The Company recognizes this income when it is earned,
      the services are performed and collection is probable.





Radio
      and
      other media revenue represents advertising revenue earned from sponsors who
      advertise on the Dr. Laura Berman Radio Show, royalties from products licensed
      by us and publishing of books. All of our revenue from radio advertising for
      the
      year ended December 31, 2005 was received from a single advertiser and was
      a
      single occurrence. Dr. Berman is not paid for hosting her radio show. When
      such
      revenue is generated, we recognize this revenue when it is earned, the services
      are performed and collection is probable.





Television
      revenue represents revenue earned from appearances Dr. Berman has made on Fox
      News in the Morning and from the weekly taping and production of the new reality
      television show ‘Sexual Healing’ which will air on the Showtime cable channel.
      When such revenue is generated, we recognize this revenue when it is earned,
      the
      services are performed and collection is probable.





Cash
      and Cash Equivalents


For
      the
      purpose of the statements of cash flows, the Company considers all highly liquid
      investments purchased with original maturities of three months or less to be
      cash equivalents.





Property
      and Equipment


Property
      and equipment are stated at cost. The Company provides for depreciation and
      amortization using the straight-line method over estimated useful lives of
      five
      to seven years. Expenditures for maintenance and repairs are charged to
      operations as incurred while renewals and betterments are capitalized. Gains
      or
      losses on the sale of property and equipment are reflected in the statements
      of
      operations.





Deferred
      Revenue


The
      Company records deferred revenue on amounts received in advance from clients
      and
      corporate sponsors to support the work of the clinic while it conducts research
      studies or while Dr. Laura Berman writes a book. The Company also receives
      amounts in advance from registrants who plan to attend conferences conducted
      by
      the clinic. The revenue is recognized on the Company’s financial statements when
      the work is complete and the results of the research are released or the book
      is
      published and when the conference has been conducted. As of June 30, 2006,
      the
      deferred revenue liability on the Company’s balance sheet is $26,125
      (unaudited).





8




Fair
      Value of Financial Instruments


The
      Company’s financial instruments include cash and cash equivalents, prepaid
      expenses and other current assets, accounts payable and accrued expenses,
      accrued payroll, and deferred revenue. The book value of all other financial
      instruments is representative of their fair values.





Stock-Based
      Compensation





In
      December 2004, the Financial Accounting Standards Board (FASB) revised
      Statement of Financial Accounting Standards No. 123 (FAS 123R),
“Share-Based Payment,” which establishes accounting for share-based awards
      exchanged for employee services and requires companies to expense the estimated
      fair value of these awards over the requisite employee service period. On
      April 14, 2005, the U.S. Securities and Exchange Commission adopted a new
      rule amending the effective dates for FAS 123R. In accordance with the new
      rule,
      the accounting provisions of FAS 123R are effective for the Company beginning
      in
      the quarter ended March 31, 2006.




Under
      FAS
      123R, share-based compensation cost is measured at the grant date, based on
      the
      estimated fair value of the award, and is recognized as expense over the
      employee’s requisite service period. The Company has no awards with market or
      performance conditions. The Company adopted the provisions of FAS 123R on
      January 1, 2006, the first day of the Company’s fiscal year 2006, using a
      modified prospective application, which provides for certain changes to the
      method for valuing share-based compensation. Under the modified prospective
      application, prior periods are not revised for comparative purposes. The
      valuation provisions of FAS 123R apply to new awards and to awards that are
      outstanding on the effective date and subsequently modified or cancelled.
      Estimated compensation expense for awards outstanding at the effective date
      will
      be recognized over the remaining service period using the compensation cost
      calculated for pro forma disclosure purposes under FASB Statement No. 123,
“Accounting for Stock-Based Compensation” (FAS 123).





Stock
      option activity was as follows for the years ended December 31, 2004 and 2005
      and the six months ended June 30, 2006:





**Shares
                Subject**
              **to
                Option**
            ****
            **Weighted
                Average**
              **Exercise
                Price**
            ****
            **Options****Exercisable**Balance
                atJanuary
                1, 2004
            
            
            -
            
            $
            -
            
            
            -Options
                granted
            
            
            314,230
            
            
            0.19
            
            
            314,230Options
                forfeited
            
            
            -
            
            
            -
            
            
            -Options
                expired
            
            
            -
            
            
            -
            
            
            -Options
                exercised
            
            
            -
            
            
            -
            
            
            -Balance
                atDecember
                31, 2004
            
            
            314,230
            
            
            0.19
            
            
            314,230Options
                granted
            
            
            -
            
            
            -
            
            
            -Options
                forfeited
            
            
            -
            
            
            -
            
            
            -Options
                expired
            
            
            -
            
            
            -
            
            
            -Options
                exercised
            
            
            -
            
            
            -
            
            
            -Balance
                atDecember
                31, 2005
            
            
            314,230
            
            $
            0.19
            
            
            314,230Options
                granted
            
            
            -
            
            
            -
            
            
            -Options
                forfeited
            
            
            -
            
            
            -
            
            
            -Options
                expired
            
            
            -
            
            
            -
            
            
            -Options
                exercised
            
            
            -
            
            
            -
            
            
            -June
                30, 2006
            
            
            **314,230**
            
            **$**
            **0.19**
            
            
            **314,230**




9




All
      options as of June 30, 2006 are fully vested. The following table summarizes
      the
      status of the Company’s stock options outstanding and exercisable as of June 30,
      2006:





**Options
                Outstanding**
            
            **Options
                Exercisable****Average**
            
            **Weighted**
            
            
            
            **Weighted****Range
                of**
            
            
            
            **Remaining**
            
            **Average**
            
            
            
            **Average****Exercise**
            
            **Number**
            
            **Contractual**
            
            **Exercise**
            
            **Number**
            
            **Exercise****Prices**
            
            **Outstanding**
            
            **Life**
            
            **Price**
            
            **Exercisable**
            
            **Price**$0.19
            
            
            314,230
            
            
            7.90
                years
            
            $
            0.19
            
            
            314,230
            
            $
            0.19





The
      fair
      value of each stock option granted is estimated on the date of the grant using
      the Black-Scholes option pricing model and factors in an estimated forfeiture
      based on management assessment of historical employee termination experience.
      The Black-Scholes option pricing model has assumptions for risk free interest
      rates, dividends, stock volatility and expected life of an option grant. The
      risk free interest rate is based the U.S. Treasury Bill rate with a maturity
      based on the expected life of the options and on the closest day to an
      individual stock option grant. Dividend rates are based on the Company's
      dividend history. The stock volatility factor is based on the past three years
      of market prices of the Company's common stock. The expected life of an option
      grant is based on its vesting period. The fair value of each option grant is
      recognized as compensation expense over the expected life of the option on
      a
      straight line basis.





The
      foregoing impact of option value was determined using Black-Scholes methodology
      and the following assumptions:





****
            ****
            ****
            **Weighted**
            ****
            ****
            ****
            ****
            ****
            ****
            ********
            ****
            **Risk-Free**
            ****
            **Average**
            ****
            ****
            ****
            **Expected**
            ****
            **Fair
                Value**
            ********
            ****
            **Interest**
            ****
            **Expected**
            ****
            **Expected**
            ****
            **Dividend**
            ****
            **at
                Grant**
            ********
            **Rate**
            ****
            **Life**
            ****
            **Volatility**
            ****
            **Yield**
            ****
            **Date**2004
                Director
                options
            
            
            3.07
            %
            
            0.9
                years
            
            
            29.00
            %
            
            0.00
            %
            $
            0.00





10




The
      weighted average exercise prices for options granted and exercisable and
      weighted average remaining contractual life for options outstanding as of June
      30, 2005 and June 30, 2006 was as follows:





****
            ****
            ****
            ****
            ****
            ****
            **Weighted**
            ****
            ****
            ********
            ****
            ****
            ****
            **Weighted**
            ****
            **Average**
            ****
            ****
            ********
            ****
            **Number**
            ****
            **Average**
            ****
            **Remaining**
            ****
            ****
            ********
            ****
            **of**
            ****
            **Exercise**
            ****
            **Contractual**
            ****
            **Intrinsic**
            ********
            ****
            **Shares**
            ****
            **Price**
            ****
            **Life
                (Years)**
            ****
            **Value***As
                of June 30, 2005:*Employees
                - Outstanding
            
            
            314,230
            
            $
            0.19
            
            
            1.9
            
            $
            -Employees
                - Expected to Vest
            
            
            314,230
            
            $
            0.19
            
            
            1.9
            
            $
            -Employees
                - Options Exercisable
            
            
            314,230
            
            $
            0.19
            
            
            1.9
            
            $
            -*As
                of June 30, 2006:*Employees
                - Outstanding
            
            
            314,230
            
            $
            0.19
            
            
            0.9
            
            $
            -Employees
                - Expected to Vest
            
            
            314,230
            
            $
            0.19
            
            
            0.9
            
            $
            -Employees
                - Options Exercisable
            
            
            314,230
            
            $
            0.19
            
            
            0.9
            
            $
            -





The
      Company did not record any compensation expense during the three and six months
      ended June 30, 2006, as all employee stock options were fully
      vested.





No
      comparable information is presented for the three and six month periods ended
      June 30, 2005 as the Company adopted the disclosure requirements for SFAS No.
      123R using the modified prospective approach effective with periods commencing
      on January 1, 2006.





The
      following table illustrates the effect on net loss and loss per share if the
      Company had applied the fair value recognition provisions of SFAS 123 to
      stock-based awards for the three and six months ended June 30, 2005.  For
      purposes of this pro-forma disclosure, the fair value of the options is
      estimated using the Black-Scholes option-pricing formula (Black-Scholes model)
      and amortized to expense over the options’ contractual term.




****
            ****
            **For
                The Six**
            ****
            **For
                The Three**
            ********
            ****
            **Months
                Ended**
            ****
            **Months
                Ended**
            ********
            ****
            **June
                30, 2005**
            ****
            **June
                30, 2005**Net
                income (loss):As
                reported
            
            
            ($1,178,008
            )
            
            ($830,761
            )Deduct:
                Total stock-based employee
                compensation  expense
                determined under  fair
                value based method for  all
                awards, net of related taxeffects
            
            
            ($9,460
            )
            
            ($8,279
            )Pro
                forma
            
            
            ($1,187,468
            )
            
            ($839,040
            )Basic
                and diluted earnings (loss) per shares
                of common stock:As
                reported
            
            
            ($0.06
            )
            
            ($0.04
            )Pro
                forma
            
            
            ($0.06
            )
            
            ($0.04
            )




11




Loss
      Per Share


The
      Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per share is
      computed by dividing loss available to common shareholders by the
      weighted-average number of common shares outstanding. Diluted loss per share
      is
      computed similar to basic loss per share except that the denominator is
      increased to include the number of additional common shares that would have
      been
      outstanding if the potential common shares had been issued and if the additional
      common shares were dilutive. Common equivalent shares are excluded from the
      computation if their effect is anti-dilutive.





At
      June
      30, 2006 and 2005, the following common equivalent shares were excluded from
      the
      computation of loss per share since their effect is anti-dilutive.





****
            ****
            **For
                  The Six Months Ended**
              **June
                30,**
            ****
            **For
                  The Three Months Ended**
              **June
                30,******
            ****
            **2006**
            ****
            **2005**
            ****
            **2006**
            ****
            **2005**Options
            
            
            314,230
            
            
            314,230
            
            
            314,230
            
            
            314,230Warrants
            
            
            9,900,114
            
            
            10,591,085
            
            
            9,900,114
            
            
            10,591,085




Income
      Taxes


Current
      income tax expense is the amount of income taxes expected to be payable for
      the
      current year. A deferred income tax asset or liability is established for the
      expected future consequences resulting from the differences in the financial
      reporting and tax bases of assets and liabilities. Deferred income tax expense
      (benefit) is the change during the year in the deferred income tax asset or
      liability.




Valuation
      allowances are established when necessary to reduce deferred tax assets to
      the
      amount expected to be “more likely than not” realized in the future based on the
      Company’s current and expected operating results.





The
      significant components of the provision for income taxes for the six months
      ended June 30, 2006 and 2005 were $0 and $0, respectively, for the current
      state
      provision. There was no state deferred and federal tax provision.





Due
      to
      its current net loss position, the Company has provided a valuation allowance
      in
      full on its net deferred tax assets in accordance with SFAS 109 and in light
      of
      the uncertainty regarding ultimate realization of the net deferred tax
      assets.





Estimates


The
      preparation of financial statements requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenue and expenses during the reporting
      period. Actual results could differ from those estimates.





12




Concentrations
      of Credit Risk


Financial
      instruments which potentially subject the Company to concentrations of credit
      risk consist of cash and cash equivalents. The Company places its cash and
      cash
      equivalents with high credit, quality financial institutions. At times, such
      cash and cash equivalents may be in excess of the Federal Deposit Insurance
      Corporation insurance limit of $100,000. The Company has not experienced any
      losses in such accounts and believes it is not exposed to any significant credit
      risk on cash and cash equivalents.





Recently
      Issued Accounting Pronouncements


In
      March
      2005, the FASB issued FASB Interpretation (“FIN”) No. 47, “Accounting for
      Conditional Asset Retirement Obligations”. FIN No. 47
      clarifies that the term conditional asset retirement obligation as
      used in FASB Statement No. 143, “Accounting for Asset Retirement Obligations,”
refers to a legal obligation to perform an asset retirement activity in
      which the timing and (or) method of settlement are conditional on a future
      event
      that may or may not be within the control of the entity.  The obligation to
      perform the asset retirement activity is unconditional even though uncertainty
      exists about the timing and (or) method of settlement.  Uncertainty about
      the timing and/or method of settlement of a conditional asset retirement
      obligation should be factored into the measurement of the liability when
      sufficient information exists.  This interpretation also
      clarifies when an entity would have sufficient information to reasonably
      estimate the fair value of an asset retirement obligation. Fin No. 47 is
      effective no later than the end of fiscal years ending after December 15, 2005
      (December 31, 2005 for calendar-year companies). Retrospective application
      of
      interim financial information is permitted but is not required. Management
      does
      not expect adoption of FIN No. 47 to have a material impact on the Company’s
      financial statements.





In
      May
      2005, the FASB issued Statement of Financial Accounting Standards (SFAS) No.
      154, “Accounting Changes and Error Corrections”, an amendment to Accounting
      Principles Bulletin (APB) Opinion No. 20, “Accounting Changes”, and SFAS No. 3,
“Reporting Accounting Changes in Interim Financial Statements”. Though SFAS No.
      154 carries forward the guidance in APB No.20 and SFAS No.3 with respect to
      accounting for changes in estimates, changes in reporting entity, and the
      correction of errors, SFAS No. 154 establishes new standards on accounting
      for
      changes in accounting principles, whereby all such changes must be accounted
      for
      by retrospective application to the financial statements of prior periods unless
      it is impracticable to do so. SFAS No. 154 is effective for accounting changes
      and error corrections made in fiscal years beginning after December 15, 2005,
      with early adoption permitted for changes and corrections made in years
      beginning after May 2005. The Company will implement SFAS No. 154 in its fiscal
      year beginning January 1, 2006. The Company is currently evaluating the impact
      of this new standard, but believes that it will not have a material impact
      upon
      the Company’s financial position, results of operations or cash
      flows.




In
      February 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      155, “Accounting for Certain Hybrid Financial Instruments” (“SFAS 155”), which
      amends SFAS No. 133, “Accounting for Derivatives Instruments and Hedging
      Activities” (“SFAS 133”) and SFAS No. 140, “Accounting for Transfers and
      Servicing of Financial Assets and Extinguishment of Liabilities” (“SFAS 140").
      SFAS 155 amends SFAS 133 to narrow the scope exception for interest-only and
      principal-only strips on debt instruments to include only such strips
      representing rights to receive a specified portion of the contractual interest
      or principle cash flows. SFAS 155 also amends SFAS 140 to allow qualifying
      special-purpose entities to hold a passive derivative financial instrument
      pertaining to beneficial interests that itself is a derivative instruments.
      The
      Company is currently evaluating the impact this new Standard, but believes
      that
      it will not have a material impact on the Company’s financial position, results
      of operations or cash flows.




13




In
      March
      2006, the FASB issued SFAS No. 156, “ Accounting
      for Servicing of Financial Assets” (“SFAS NO. 156”), which provides an approach
      to simplify efforts to obtain hedge-like (offset) accounting. This Statement
      amends FASB Statement No. 140, “Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities”, with respect to the
      accounting for separately recognized servicing assets and servicing liabilities.
      The Statement (1) requires an entity to recognize a servicing asset or servicing
      liability each time it undertakes an obligation to service a financial asset
      by
      entering into a servicing contract in certain situations; (2) requires that
      a
      separately recognized servicing asset or servicing liability be initially
      measured at fair value, if practicable; (3) permits an entity to choose either
      the amortization method or the fair value method for subsequent measurement
      for
      each class of separately recognized servicing assets or servicing liabilities;
      (4) permits at initial adoption a one-time reclassification of
      available-for-sale securities to trading securities by an entity with recognized
      servicing rights, provided the securities reclassified offset the entity’s
      exposure to changes in the fair value of the servicing assets or liabilities;
      and (5) requires separate presentation of servicing assets and servicing
      liabilities subsequently measured at fair value in the balance sheet and
      additional disclosures for all separately recognized servicing assets and
      servicing liabilities. SFAS No. 156 is effective for all separately recognized
      servicing assets and liabilities as of the beginning of an entity’s fiscal year
      that begins after September 15, 2006, with earlier adoption permitted in certain
      circumstances. The Statement also describes the manner in which it should be
      initially applied. The Company does not believe that SFAS No. 156 will have
      a
      material impact on its financial position, results of operations or cash
      flows.




In
      June
      2006, the FASB issued Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes — An Interpretation of FASB Statement
      No. 109,* (FIN 48).  FIN 48 clarifies the accounting for uncertainty in
      income taxes recognized in an enterprise’s financial statements in accordance
      with FASB Statement No. 109, *Accounting
      for Income Taxes.* FIN 48 also prescribes a recognition threshold and measurement attribute
      for the financial statement recognition and measurement of a tax position taken
      or expected to be taken in a tax return that results in a tax benefit.
      Additionally, FIN 48 provides guidance on de-recognition, income statement
      classification of interest and penalties, accounting in interim periods,
      disclosure, and transition. This interpretation is effective for fiscal years
      beginning after December 15, 2006. The Company is currently evaluating the
      effect that the application of FIN 48 will have on its results of
      operations and financial condition.





**NOTE
      5 - PROPERTY AND EQUIPMENT**





Property
      and equipment at June 30, 2006 consisted of the following:




****
            ****
            **June
                30,**
              **2006**
              **(unaudited)**Equipment
            
            $
            412,910Furniture
                and fixtures
            
            
            190,587Leasehold
                improvements
            
            
            253,786857,283Less
                accumulated depreciation and amortization345,391**Total**
            
            **$**
            **511,892**




Depreciation
        and amortization expense for the six months ended June 30, 2006 and 2005
        was
        $78,649 (unaudited) and $65,038 (unaudited), respectively.


14







**NOTE
      6 - COMMITMENTS AND CONTINGENCIES**





Operating
      and Capital Leases





The
      Company leases an office in Chicago, Illinois which serves as the main clinic
      facility as well as the administrative and corporate office. The lease is
      scheduled to expire in August of 2014. A $250,000 letter of credit was
      originally required to provide credit support for the lease. The letter of
      credit was provided by LaSalle Bank. In November 2005, the letter of credit
      was
      replaced with a cash deposit. At December 31, 2005 the cash deposit balance
      paid
      to the landlord was $206,563. This amount is included in the balance for
      Deposits reported on the Balance Sheet at December 31, 2005. At June 30, 2006,
      the deposit balance was $165,250 (unaudited). Total rent expense incurred for
      the six months ended June 30, 2006 and 2005 was $136,300 (unaudited) and
      $129,258 (unaudited) respectively. Total rent expense for the three months
      ended
      June 30, 2006 and 2005 was $67,204 and 67,179 (unaudited) respectively The
      Company’s lease for the Naperville office space expired at the end of May 2006
      and was not renewed and, as a result, this office was closed at that time.
      The
      Naperville office (a suburb of Chicago) served as a smaller second clinic
      facility. Total rent expense incurred for this facility was $10,000 (unaudited)
      and $0 (unaudited) for the six months ended June 30, 2006 and 2005, respectively
      Total rent expense incurred for this facility for the three months ended June
      30, 2006 and 2005 was $4,000 and $0 (unaudited) respectively.





At
      June
      30, 2006 the Company is obligated under several capital equipment leases with
      various vendors. The capital leases are calculated using a 4.0% interest rate
      per annum. The monthly capital lease payments range between $563 and $1,292
      and
      terminate through December 2008.





Future
      minimum lease payments under operating and capital leases at June 30, 2006
      were
      as follows:




**Year
                Ending**
            
            **Operating**
            ****
            **Capital**
            ******December
                31,**
            ****
            **Lease**
            ****
            **Lease**2006
            
            $
            185,445
            
            $
            7,7512007
            
            
            247,958
            
            
            8,2172008
            
            
            255,443
            
            
            6,7592009
            
            
            263,061
            
            
            -2010
            
            
            270,946
            
            
            -Thereafter
            
            
            1,020,007Total
                minimum lease payments
            
            $
            2,242,860
            
            
            22,727Less
                amounts representing interest
            
            
            
            
            
            1,97820,749Less
                current portion
            
            
            
            
            
            11,572Long-term
                portion
            
            
            
            
            $
            9,177





15





Employment
      Agreements





On
      June
      16, 2005, the Company and Dr. Laura Berman entered into a three-year employment
      agreement. Pursuant to such agreement, Dr. Berman will receive an annual salary
      of $200,000, provided that under certain circumstances the Board of Directors
      may increase her salary. In May 2006 the employment agreement with Dr. Laura
      Berman was amended and had been extended to a four-year agreement. In addition,
      Dr. Berman has also agreed to contribute to the Company all income, revenue
      and
      other compensation received by Dr. Berman in connection with activities related
      to the business operations of the Company during her employment, including,
      without limitation, all revenue from media sources, talent agreements with
      television production companies or other media sources and authorship royalties.
      These items are the sole property of the Company and may not be removed from
      the
      Company without approval of at least a majority in interest of the Company’s
      stockholders and adequate compensation to the Company. The contribution of
      income and revenues describe above, however, does not include income, revenue
      and other compensation derived by Dr. Berman from honorarium fees and speaking
      engagements.





In
      the
      event that Dr. Berman performs services and earns compensation that would fall
      under this agreement, such amounts would be recorded when the contribution
      is
      considered due to the Company and the services have been completed by Dr.
      Berman. Contributions will be recorded as revenue or expense as
      appropriate.





Escrow
      Shares





LB
      Center
      also issued 2,303,999 shares of common stock into escrow for a period of 24
      months to cover indemnification obligations, if any, to BHM and its stockholders
      (the “Escrow Shares”) in connection with the Merger.  If a valid claim for
      indemnification is made against LB Center resulting from a breach of any of
      the
      representations, warranties or covenants, all or a portion of the Escrow Shares
      would be issued on a pro rata basis to those parties who were BHM stockholders
      of record immediately prior to the Merger. To the extent that the Escrow Shares
      are not distributed to former holders of BHM stock as a result of
      indemnification claims made prior to the end of the 24 month period following
      the Merger, those Escrow Shares will be canceled.





**NOTE
      7 - STOCKHOLDERS' EQUITY**





Common
      Stock





During
      the six months ended June 30, 2006, the Company completed the following
      transactions:








·
            Issued
                1,290,971 shares to third party investors for a cash total of $388,750.
                The shares issued were in relation to the exercise of 384,000 bridge
                warrants and 906,971 placement agent warrants previously issued as
                described below. In connection with the issuance, the Company also
                issued
                600,000 warrants to the placement
                agent.





The
      exercise price of the newly issued 600,000 placement agent warrants is $1.00
      per
      warrant and will have a three year term. The fair value of each warrant has
      been
      calculated with the following assumptions at the grant date; dividend yield
      of
      0%, expected volatility of 50%, risk free interest rate of 5.23% and an expected
      life of 3 years and was determined to not be material.





During
      the year ended December 31, 2005, the Company completed the following
      transactions:





·
            Issued
                1,653,147 shares for a cash total of $236,742 to third party
                investors.




16




·
            Issued
                497,531 shares of common stock to several members of the board of
                directors as compensation for services earned. Compensation expense
                recognized in the year ended December 31, 2005 was $95,000. This
                amount
                was previously recorded as deferred compensation at December 31,
                2004 and
                was earned upon the completion of the reverse merger. Of the 497,531
                shares of common stock issued to the board of directors, 392,787
                were
                rescinded. There was no subsequent adjustment made to the compensation
                expense for the rescission of these
                shares.




·
            Issued
                9,069,712 shares of common stock to third party investors for a cash
                total
                of $2,641,579 net of offering costs of $458,421. In connection with
                the
                issuance, the Company issued 4,534,857 Class A warrants, 4,534,857
                Class B
                warrants and 906,971 warrants to a placement
                agent.




The
      Class
      A Warrants shall be redeemable by the Company at a price of five (5) cents
      per
      warrant in the event (i) there is an effective registration statement covering
      the shares of Common Stock underlying the Class A Warrants and (ii) the closing
      market price of shares of Common Stock listed on a national securities market
      equals or exceeds 300% of the price (the “Issue Price”) of the shares of Common
      Stock issued further to the Private Placement Unit Offering for twenty of the
      thirty consecutive trading days immediately preceding the Company’s notice of
      redemption. The exercise price of the Class A warrants is $0.684 per warrant
      and
      will have a three year term. The fair value of each warrant has been calculated
      with the following assumptions at the grant date; dividend yield of 0%, expected
      volatility of 29%, risk free interest rate of 3.07% and an expected life of
      3
      years.





The
      Class
      B Warrants shall be redeemable by the Company at a price of five (5) cents
      per
      warrant in the event (i) there is an effective registration statement covering
      the shares of Common Stock underlying the Class B Warrants and (ii) the closing
      market price of shares of Common Stock listed on a national securities market
      equals or exceeds 400% of the Issue Price for twenty of the thirty consecutive
      trading days immediately preceding the Company’s notice of redemption. The
      exercise price of the Class B warrants is $1.025 per warrant and will have
      a
      three year term. The fair value of each warrant has been calculated with the
      following assumptions at the grant date; dividend yield of 0%, expected
      volatility of 29%, risk free interest rate of 3.07% and an expected life of
      3
      years.




The
      Placement Warrants will receive registration rights identical to the rights
      granted to the holders of Class A Warrants and Class B Warrants. The warrants
      will be exercisable at a price of $0.341 per share and will have a three year
      term. The fair value of these warrants have been calculated at $2,182 and have
      been included in offering costs. The fair value of each warrant has been
      calculated with the following assumptions at the grant date; dividend yield
      of
      0%, expected volatility of 29%, risk free interest rate of 3.07% and an expected
      life of 3 years.





There
      were also warrants issued on April 11, 2005 in conjunction with a bridge loan
      the Company received in order to finance the expenses related to the reverse
      merger transaction. The warrants associated with the bridge loan are referenced
      in note # 3 to the financial statements (‘The Merger’ note).





During
      the year ended December 31, 2004, the Company completed the following
      transactions:




·
            Issued
                628,462 restricted shares to several members of the Board of Directors,
                as
                compensation for future employment of three years, valued at $120,000.
                A
                total of 130,930 shares vested during 2004. Total compensation expense
                recorded for the year ended December 31, 2004 is
                $25,000.




17




·
            Issued
                12,766,370 shares for a cash total of $2,729,481 to third party
                investors.




Warrants





The
      following table summarizes the status of the Company’s warrants outstanding and
      exercisable as of June 30, 2006:




**Warrants
                Outstanding**
            
            **Warrants
                Exercisable****Average**
            
            
            **Weighted**
            
            
            
            
            
            **Weighted****Range
                of**
            
            
            
            
            
            **Remaining**
            
            
            **Average**
            
            
            
            
            
            **Average****Exercise**
            
            
            **Number**
            
            
            **Contractual**
            
            
            **Exercise**
            
            
            **Number**
            
            
            **Exercise****Prices**
            
            
            **Outstanding**
            
            
            **Life**
            
            
            **Price**
            
            
            **Exercisable**
            
            
            **Price**$0.21
                - $1.03
            
            
            9,900,114
            
            
            2.01
                years
            
            $
            0.85
            
            
            9,900,114
            
            $
            0.85




It
      is the
      Company’s policy to state the warrants at their fair value which was determined
      to be zero. The foregoing impact of warrant value was determined using a
      modified Black-Scholes methodology and the following assumptions:





****
            ****
            **Weighted**
            ****
            ****
            ****
            ****
            ****
            ****
            ********
            ****
            **Risk-Free**
            
            **Average**
            ****
            ****
            ****
            **Expected**
            ****
            **Fair
                Value**
            ********
            ****
            **Interest**
            ****
            **Expected**
            ****
            **Expected**
            ****
            **Dividend**
            ****
            **at
                Grant**
            ******Rate**
            ****
            **Life**
            ****
            **Volatility**
            ****
            **Yield**
            ****
            **Date**Class
                A Warrants
            
            
            3.07
            %
            
            2.0
                years
            
            
            29.00
            %
            
            0.00
            %
            $
            0.00Class
                B Warrants
            
            
            3.07
            %
            
            2.0
            
            
            29.00
            %
            
            0.00
            %
            $
            0.00Placement
                Warrants
            
            
            3.07
            %
            
            3.0
            
            
            29.00
            %
            
            0.00
            %
            $
            0.00Bridge
                Warrants
            
            
            3.07
            %
            
            2.0
            
            
            29.00
            %
            
            0.00
            %
            $
            0.00





**NOTE
      8 - SUBSEQUENT EVENTS**





On
      July
      25, 2006, William McDunn, the Chief Financial Officer of Berman Center, Inc.
      (the “Company”), resigned from his position effective August 15, 2006. Carlos
      Bernal, 37, will replace Mr. McDunn as the Chief Financial Officer of the
      Company beginning on August 16, 2006.




Effective
      July 27, 2006, the medical services portion of the clinic’s business
      is
      being discontinued and the focus shifts to talk therapy and individual and
      couples therapy retreats.





18




**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION**





*The
      following discussion should be read in conjunction with our Financial
      Statements, including the notes related thereto, and other financial information
      included herein. The analysis set forth below is provided pursuant to applicable
      Securities and Exchange Commission regulations and is not intended to serve
      as a
      basis for projections of future events. In addition, the information in this
      report includes forward-looking statements. These statements involve known
      and
      unknown risks, uncertainties and other factors that may cause our actual
      results, levels of activity, performance or achievements to be materially
      different from any future results, levels of activity, performance, or
      achievements expressed or implied by such forward-looking statements. Such
      factors include, among other things, those described under "Risk Factors" in
      our
      Annual Report on Form 10-KSB for the year ended December 31, 2005 and in this
      Quarterly Report on Form 10-QSB. In some cases, you can identify forward-looking
      statements by terminology such as "may," "will," "should," "could," "expects,"
      "plans," "intends," "anticipates," "believes," "estimates," "predicts,"
      "potential" or "continue" or the negative of such terms or other comparable
      terminology.*





*Although
      we believe that the expectations reflected in the forward-looking statements
      are
      reasonable, it cannot guarantee future results, levels of activity, performance,
      or achievements. Moreover, neither we nor any other person assumes
      responsibility for the accuracy and completeness of such statements. We are
      under no duty to update any of the forward-looking statements after the date
      of
      this report.*





**Overview**





We
      are a
      specialized health center for women focused on female sexual health. Dr. Laura
      Berman, our President, is a researcher in the field of women's sexual health.
      Dr. Berman, who is not a physician, earned her Master's in Clinical Social
      Work
      and Doctorate in Health Education and Therapy (specializing in human sexuality)
      at New York University. Effective July 27, 2006, the medical services portion
      of
      the clinic’s business is being discontinued and the focus of clinical services
      shifts to talk therapy and individual and couples therapy retreats.





Our
      principal source of revenue is from the clinical services that we provide out
      of
      our downtown Chicago clinic, comprising of approximately 10,000 square feet.
      Our
      clinical staff works to improve our patients’ quality of life, health and
      relationships. Clinical services include talk therapy performed by licensed
      clinical social workers, medicine, as practiced by physicians and nurse
      practitioners, serum and saliva testing services, nutritional counseling and
      yoga classes. Until July 27, 2006, we operated a hormonal management clinic,
      counseling center and sexual function testing center. Our hormone management
      clinic was a facility that could treat a variety of female hormone deficiency
      cases including menopausal symptom relief and sexual function improvement.
      Our
      sexual function testing center was a facility that measures hormone levels,
      nerve function and other sensory impairment issues, blood flow abnormalities
      in
      the genital region, and signs of emotional difficulty, relationships discord
      and
      past trauma and abuse. Our clinical staff included one nurse practitioner,
      one
      medical assistant and two talk therapists, all of whom work for us. The nurse
      practitioner and assistant are no longer with the Company.





Clinical
      services accounted for 65% and 60% of our revenue for the years ended December
      31, 2005 and 2004, respectively, and 21% and 83% respectively for the six months
      ended June 30, 2006 and 2005. The amount of our losses since we began our
      current operations in the female sexual health business in January 2003 through
      June 30, 2006 is $5,308,567. Revenue from clinic operations for the six months
      ended June 30, 2006 decreased by $18,821 as compared to the six months ended
      June 30, 2005, from $247,430 to $228,609. The decrease is due to a small
      reduction of demand for our clinic services as compared to the same period
      from
      the previous year. Effective July 27, 2006, the medical services portion of
      the
      clinic’s business is being discontinued and the focus shifts to talk therapy and
      individual and couples therapy retreats. There will be a decrease in clinic
      revenue as a result of this change along with a decrease in clinic costs and
      expenses. It is management’s intention to shift the emphasis of the clinic’s
      business to talk therapy and expand these clinic services and to increase clinic
      revenue by expanding talk therapy services and individual and couples therapy
      retreats





We
      generate additional revenue from medical education courses. We hold continuing
      medical education courses, which accounted for 23% and 25% of our revenue for
      the years ended December 31, 2005 and 2004, respectively and 18% and 0%
      respectively for the six months ended June 30, 2006 and 2005. Costs for these
      revenues primarily consist of hotel charges for the rooms and audio-visual
      equipment as well as payments of honorariums to speakers at the seminar. The
      revenue generated from our clinical services and medical education courses
      accounted for approximately 89% and 85% of our revenue for the years ended
      December 31, 2005 and 2004, respectively and 38% and 83% respectively for the
      six months ended June 30, 2006 and 2005.




19




In
      addition to clinical services and medical education courses, we generate revenue
      from books authored by Dr. Berman. Pursuant to our employment agreement with
      Dr.
      Berman dated June 16, 2005, her residual rights and her ongoing rights in her
      books are pledged to the Berman Center. Dr. Berman’s book *The
      Passion Prescription* ,
      which
      is a do-it-yourself guide to sexual wellness, was released during January 2006.
      In connection with the book’s release, Dr. Berman received a final advance
      payment of $77,916, after deducting her literary agent’s commission, during
      January 2006; and, the payment has been paid to our company in
      accordance with Dr. Berman’s employment agreement. At December 31, 2005, there
      was a balance of $88,958 in deferred revenue related to amounts received
      previously to support the book. Dr. Berman’s book was released in January 2006
      and total revenue of $166,874 from the book is recognized for the six months
      ended June 30, 2006. In addition to the payment that we received in connection
      with *The
      Passion Prescription* ,
      we have
      received various smaller amounts of publishing revenue from a few magazine
      companies from allowing them to publish excerpts of Dr. Berman’s book in their
      respective magazines. Costs that we incur in connection with book publishing
      primarily consist of internal payroll expenses for our staff writer who assists
      Dr. Berman in authorship of a book. Our writer’s annual salary is approximately
      $75,000.





We
      have
      recently entered into the television production business. We executed an
      agreement with Gantz Brothers' View Film Productions to furnish Dr. Laura Berman
      for a television series to be produced by View Film Productions for the Showtime
      Network. The show, which is entitled *Sexual
      Healing* ,
      will
      track three couples' progress through intensive couples therapy at the Berman
      Center over a one-week period. We expect there to be nine such weekly episodes.
      The ShowTime Network picked up the series in September 2005 and premier the
      show in July 2006. We are entitled to a payment from View Films Production
      equal to 10% of the production budgets paid by Showtime to View Film
      Productions. The production budget payments are guaranteed by Showtime Network
      for the first season of the show. Showtime Network is not obligated to renew
      the
      show for a second season. Television production is a speculative business
      because revenues and income depend primarily on the continued acceptance of
      that
      programming from the public, and if our Showtime series fails to secure a
      sufficient audience, our programming could be canceled and the revenues we
      generate and anticipate generating from television programming would decline.
      During the six months ended June 30, 2006, the Company has earned total revenue
      of $236,073 and received payment for the eight weekly shows produced from our
      television production business in connection with the Showtime series. The
      pilot
      show was produced in 2005.




We
      recently entered into an agreement with Waterfront Media, Inc., an online
      publisher of self-help media, to create a subscription-based website featuring
      content from Dr. Laura Berman's book *The
      Passion Prescription* .
      In
      addition to subscription revenue, if any, the website offers for sale Dr.
      Berman's line of Kegel exercise and sexual aid products under the brand name
      "Berman Center Intimate Accessories," which was created in partnership with
      California Exotics Novelties, LLC. Dr. Berman and our management team designed
      the products and California Exotics is distributing and managing the products.
      We are entitled to an 8% share or royalty of the revenue of the product line
      paid to California Exotics. For the year ended December 31, 2005, we received
      $28,453 in revenue from the commission on sales of the Berman Center Intimate
      Accessories line of products. For the six months ended June 30, 2006 and 2005
      we
      recognized revenue of $53,571 and $0 respectively from such royalties.





**Critical
      Accounting Policies Used in Financial Statements**





We
      prepare our financial statements in accordance with accounting principles
      generally accepted in the United States. The preparation of these financial
      statements requires management to make estimates and assumptions that affect
      the
      reported amounts of assets and liabilities and the disclosure of contingent
      assets and liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Management's
      estimates and judgments are based on historical experience and various other
      factors that are believed to be reasonable under the circumstances, the results
      of which form the basis for making judgments about the carrying values of assets
      and liabilities that are not readily apparent from other sources. Actual results
      may differ from these estimates under different assumptions or
      conditions.





**Revenue
      Recognition**





Revenues
      are recognized when realized or realizable and earned. Patients at the clinic
      are required to pay on the day of their appointment (at the point of service).
      Patients are allowed to pay either with cash, check or credit card. Items for
      bad debt or returned or rejected credit cards are very minimal and are recorded
      as they occur. If the clinic changed its policy in the future and granted credit
      to its patients, a review of the current procedures would be necessary and
      allowances for bad debt write-offs would be warranted. Costs for these revenues
      primarily consist of outside lab fees and internal payroll expenses for clinical
      staff. These costs are recognized as they are incurred.




20




Revenue
      related to the hosting of continuing medical education seminars for clinicians
      is recognized once the seminar has been conducted. Costs for these revenues
      primarily consist of hotel charges for the rooms and audio visual equipment
      as
      well as payments of honorariums to speakers at the seminar. Costs for these
      revenues are also recognized once the seminar has been conducted.





Revenue
      related to the publishing of books is recognized when the book is released
      by
      the publisher. Costs for these revenues constitute primarily internal payroll
      expenses for a staff writer. These costs are recognized as they are
      incurred.





Revenue
      related to research and clinic or (clinical) trials is recognized when the
      work
      is complete. Because of the nature of the contracts, which generally require
      us
      to release the results of our studies when complete, release of the results
      of
      the clinical research is the indicator that we use to measure delivery and
      acceptance of the related services. Therefore, recognition of revenue prior
      to
      release would be precluded. Costs for these revenues constitute primarily
      research expenses paid to outside contractors. These costs are also recognized
      as they are incurred.





Radio
      and
      royalty revenue represents advertising revenue earned from sponsors who
      advertise on the Dr. Laura Berman Radio Show, royalties from products licensed
      by us. All of our revenue from radio advertising for the year ended December
      31,
      2005 was received from a single advertiser and was a single occurrence. Dr.
      Berman is not paid for hosting her radio show. We earn revenue at times, from
      television appearances that are made by Dr. Berman and from the taping of a
      new
      reality television series called ‘Sexual Healing’ which will air on the Showtime
      cable channel. Publishing revenue represents revenue earned from releasing
      of a
      new book written by Dr. Berman. Revenue from research projects represent revenue
      generated from a study conducted by Dr. Berman. When such revenue is generated,
      we recognize the revenue when it is earned, the services are performed and
      collection is probable.





**Results
      of Operations**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our financial statements, which have been prepared in accordance
      with
      U.S. generally accepted accounting principles. The preparation of these
      financial statements requires us to make estimates and judgments that affect
      the
      reported amounts of assets, liabilities, revenues and expenses, and related
      disclosure of contingent assets and liabilities. On an on-going basis, we
      evaluate our estimates, including those related to inventories, any expected
      bad
      debts and long-lived assets. We base our estimates on historical experience
      and
      on various other assumptions that we believe to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying values of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions.




**Comparison
      of the Three Months ended June 30, 2006 to the Three Months ended June 30,
      2005**





***Revenue***
            ****
            **For
                the three months ended June 30,**
            ********
            ****
            **2006**
            ****
            **2005**
            ********
            ****
            **(unaudited)**
            ****
            **(unaudited)**Clinic
                revenue
            
            $
            110,999
            
            $
            142,934Conference
                revenue
            
            
            193,375
            
            
            -Research,
                studies and trials
            
            
            -
            
            
            -Radio
                Advertising
            
            
            -
            
            
            -Publishing
            
            
            427
            
            
            -Television
            
            
            116,687
            
            
            -Royalty
            
            
            20,669
            
            
            -Other
            
            
            31,000
            
            
            -**Total
                Revenue**
            
            **$**
            **473,157**
            
            **$**
            **142,934**





21




Total
      revenue increased significantly in the three months ended June 30, 2006 to
      $473,157 as compared to $142,934 for the three months ended June 30, 2005.
      This
      is primarily due to revenue generated by the two conferences the company hosted
      and the production of the final four episodes of the Showtime television series
      entitled ‘Sexual Healing’ during the three months ended June 30, 2006. By
      comparison, there was no conference revenue and no television revenue for the
      three months ended June 30, 2005. Revenue from clinic operations for the three
      months ended June 30, 2006 decreased by $31,935 as compared to the three months
      ended June 30, 2005, from $142,934 to $110,999. The decrease is due to a decline
      in the demand for our clinic services as compared to the same period from the
      previous year. Effective July 27, 2006, the medical services portion of the
      clinic’s business is being discontinued and the focus shifts to talk therapy and
      individual and couples therapy retreats. There will be a decrease in clinic
      revenue as a result of this change along with a decrease in clinic costs and
      expenses. It is management intention to shift the emphasis of the clinic’s
      business to talk therapy and expand these clinic services and to increase clinic
      revenue by expanding talk therapy services and individual and couples therapy
      retreats




Revenue
      for the three months ended June 30, 2006 also included royalty revenue of
      $20,669 (royalty revenue is derived from arrangements with our manufacturer
      and
      distributor for our line of products for which royalties are based on a
      percentage of products sold); public relations revenue of $31,000 (this revenue
      is generated by the Company’s public relation employees spending a portion of
      their time providing public relation services to outside clients and invoicing
      those clients for these services), and a small portion of publishing revenue
      from magazine excerpts concerning Dr. Berman’s most recent book ‘The Passion
      Prescription’). In comparison, there was no revenue for these activities during
      the three months ended June 30, 2005. As such, the aforementioned revenue
      activities comprise the $330,223 increase in revenue for the three months ended
      June 30, 2006 as compared to the same period in 2005.




*Expenses*





*Cost
      of Goods Sold*





****
            ***For
                the three months ended***
            ********
            ****
            **June
                30**
            ****
            **June
                30**
            ********
            ****
            **2006**
            ****
            **2005**
            ********
            ****
            **(unaudited)**
            ****
            **(unaudited)**Clinics
            
            $
            155,893
            
            $
            117,652Conference
                expense
            
            
            425,690
            
            
            -Research,
                Studies and Trials
            
            $
            0
            
            $
            1,225**$**
            **581,583**
            
            **$**
            **118,877****Gross
                Margin**
            
            
            **($108,426**
            **)**
            **$**
            **24,057****Gross
                Margin %**
            
            
            **-23.0**
            **%**
            
            **16.8**
            **%**





Cost
      of
      goods sold during the three months ended June 30, 2006 of $581,583 was $462,706
      higher than cost of goods sold during the three months ended June 30, 2005
      of
      $118,877. This is due mainly to expenses related to the two conferences the
      Company hosted during the three months ended June 30, 2006. The total conference
      expenses for the two conferences were $425,690. By comparison, there were no
      conference expenses for the three months ended June 30, 2005. Also, there were
      higher staffing levels for the three months ended June 30, 2006 as compared
      to
      the three months ended June 30, 2005. Staff reductions and salary cuts had
      been
      put in place by the latter part of 2004 that carried over to 2005. Management
      implemented these reductions in an effort to bring expenses more in line with
      revenue at that time. By the second half of 2005, management began increasing
      staff levels. One Medical Assistant was added in the 2nd quarter of 2005. In
      the
      3 rd quarter
      of 2005, a Patient Concierge was added along with a second Talk Therapist.
      These
      staff addition expenses continued into the following year and are included
      in
      the three month period ended June 30, 2006.




22




For
      the
      three months ended June 30, 2005, cost of services consisted of $108,768 in
      payroll related costs, outside lab costs of $8,884 and research expenses of
      $1,225. For the three months ended June 30, 2006, cost of services consisted
      of
      $146,926 in payroll related costs, $425,690 in conference expenses and outside
      lab fees of $8,567.




*Selling,
      General and Administrative Expenses*





*For
                the three months ended***June
                30**
            
            **June
                30****2006**
            
            **2005****(unaudited)**
            
            **(unaudited)**Selling,
                    General & Administrative Expenses and Interest Expense:
            
            $
            474,854
            
            $
            854,818S,G&A
                (as a % of revenue)
            
            
            100.4
            %
            
            598.1
            %





Selling,
      general and administrative expenses and interest expense during the three months
      ended June 30, 2006 of $474,854 was $379,964 lower than selling, general and
      administrative expenses and interest expense for the three months ended June
      30,
      2005 of $854,818. This is mainly due to expenses related to the reverse merger
      and equity financing transaction which occurred during the three months ended
      June 30, 2005. The expenses for the reverse merger and equity financing
      transaction during the three months ended June 30, 2005 amounted to $460,741
      and
      consisted on the following expense categories: audit and legal fees pertaining
      to our registration statement on Form SB-2, subsequent amendment filings of
      Form
      SB-2, placement fees, roadshow expenses, filing fees stock transfer agent fees,
      various state and federal filing fees and interest expense .





For
      the
      three months ended June 30, 2005, the remaining significant components of
      selling, general and administrative expenses and interest expense consisted
      of
      the following: $145,443 in payroll related costs, $53,203 in expenses related
      to
      public relations, promotions and advertising, $10,959 in consultant and broker
      fees, $69,490 in rent expense, $12,150 in costs for systems and technology,
      $32,610 in depreciation expense and $22,234 in legal expenses.





The
      significant components of selling, general and administrative expenses and
      interest expense for the three months ended June 30, 2006 include: $178,501
      in
      expenses related to payroll related costs, $71,781 in rent expense, $39,324
      in
      depreciation expense, $41,233 in consultant fees, $26,500 in audit fees, $26,601
      in legal fees, $25,496 in supplies, utilities, postage and subscriptions and
      $23,514 in commercial insurance expenses.




*Net
      Loss*





*For
                the three months ended***June
                30**
            
            **June
                30****2006**
            
            **2005****(unaudited)**
            
            **(unaudited)**Net
                Profit / (Loss)
            
            
            ($583,280
            )
            
            ($830,761
            )%
                of Revenue
            
            
            -123.3
            %
            
            -581.2
            %





Net
      loss
      decreased from $830,761 in the three months ended June 30, 2005 to $583,280
      for
      the three months ended June 30, 2006. The positive change is mainly due to
      the
      increase in Media revenue in the three months ended June 30, 2006. The total
      revenue from media activities of $148,114 breaks down as follows: $116,687
      revenue from the production of the Showtime television series entitled ‘Sexual
      Healing’ (this revenue represents 4 weekly shows produced out of 8 shows
      produced in total), public relations revenue of $31,000 and a small portion
      of
      publishing revenue. The Company hosted two conferences that generated 193,375
      in
      revenue. The Company also recognized Royalty revenue of $20,669 which have
      no
      costs associated with it. By comparison, in the three months ended June 30,
      2005, the Company recognized only $142,934 in clinic revenue. There was no
      revenue from television, the hosting of conferences, publishing, or royalties
      during the related period in 2005. The losses the Company incurred during the
      three months ended June 30, 2006 would have been significantly less had the
      Company not hosted the two conferences. The losses from hosting the two
      conferences during the three months ended June 30, 2006 were $232,315. The
      losses incurred from the conferences were primarily due to an insufficient
      number of registrants attending the conferences.




23




For
      the
      three months ended June 30, 2005, cost of services amounted to $118,877
      resulting in a positive gross margin of $24,057. Selling, general and
      administrative expenses and interest expense totaled $854,818 which resulted
      in
      a net loss for the three months ended June 30, 2005 of $830,761.





For
      the
      three months ended June 30, 2006, cost of services amounted to $581,583
      resulting in a negative gross margin of $108,426. Selling, general and
      administrative expenses and interest expense totaled $474,854 which resulted
      in
      a net loss for the three months ended June 30, 2006 of $583,280.




**Comparison
      of the Six Months ended June 30, 2006 to the Six Months ended June 30,
      2005**





***Revenue***
            ****
            **For
                the six months ended June 30,**
            ********
            ****
            **2006**
            ****
            **2005**
            ********
            ****
            **(unaudited)**
            ****
            **(unaudited)**Clinic
                revenue
            
            $
            228,609
            
            $
            247,430Conference
                revenue
            
            
            193,375
            
            
            -Research,
                studies and trials
            
            
            177,500
            
            
            -Radio
                Advertising
            
            
            -
            
            
            50,000Publishing
            
            
            172,402
            
            
            -Television
            
            
            236,073
            
            
            -Royalty
            
            
            53,571
            
            
            -Other
            
            
            43,000
            
            
            -**Total
                Revenue**
            
            **$**
            **1,104,530**
            
            **$**
            **297,430**





Total
      revenue increased significantly in the six months ended June 30, 2006 to
      $1,104,530 as compared to $297,430 for the six months ended June 30, 2005.
      This
      is primarily due to the revenue generated by the two conferences the company
      hosted, the Media activities performed by the company and a research study
      conducted in the six months ended June 30, 2006. Revenue from clinic operations
      for the six months ended June 30, 2006 decreased by $18,821 as compared to
      the
      six months ended June 30, 2005, from $247,430 to $228,609. The decrease is
      due
      to a decline in the demand for our clinic services as compared to the same
      period from the previous year. Effective July 27, 2006, the medical services
      portion of the clinic’s business is being discontinued and the focus shifts to
      talk therapy and individual and couples therapy retreats. There will be a
      decrease in clinic revenue as a result of this change along with a decrease
      in
      clinic costs and expenses. It is management intention to shift the emphasis
      of
      the clinic’s business to talk therapy and expand these clinic services and to
      increase clinic revenue by expanding talk therapy services and individual and
      couples therapy retreats.





Revenue
      for the six months ended June 30, 2006 also included $451,475 in Media revenue,
      which breaks down as follows: publishing revenue of $172,402 (primarily from
      the
      release of Dr. Berman’s new book ‘The Passion Prescription’); $233,373 of
      revenue from the production of the Showtime television series entitled ‘Sexual
      Healing’ (this revenue represents 8 weekly shows produced in total); public
      relations revenue of $43,000 (this revenue is generated by the Company’s public
      relation employees spending a portion of their time providing public relation
      services to outside clients and invoicing those clients for these services);
      and
      $2,700 of revenue for television appearances by Dr. Laura Berman on the Fox
      News
      in the Morning TV show. In comparison, there was no Media revenue for the six
      months ended June 30, 2005. The Company earned Research revenue of $177,500
      in
      the six months ended June 30, 2006. The research project focused on sexual
      intimacy and was sponsored by Johnson & Johnson. There was no research
      revenue for the six months ended June 30, 2005. Revenue for the six months
      ended
      June 30, 2005 also included $50,000 in radio advertising revenue. There was
      no
      radio advertising revenue for the six months ended June 30, 2006. Royalty
      revenue for the six months ended June 30, 2006 was $53,571. There was no Royalty
      revenue for the six months ended June 30, 2005. We reported royalty revenue
      for
      the first time in the third quarter of 2005. Royalty revenue is derived from
      arrangements with our manufacturer and distributor for our line of products
      for
      which royalties are based on a percentage of products sold. As such, the
      aforementioned revenue activities comprise the $807,100 increase in revenue
      for
      the six months ended June 30, 2006 as compared to the same period in 2005.





24





*Expenses*





*Cost
      of Goods Sold*





***For
                the six months ended*****June
                30**
            
            **June
                30****2006**
            
            **2005****(unaudited)**
            
            **(unaudited)**Clinics
            
            $
            309,725
            
            $
            215,379Conference
                expense
            
            
            425,690
            
            
            -Research,
                Studies and Trials
            
            $
            69,320
            
            $
            1,725**$**
            **804,735**
            
            **$**
            **217,104****Gross
                Margin**
            
            **$**
            **299,795**
            
            **$**
            **80,326****Gross
                Margin %**
            
            
            **27.0**
            **%**
            
            **27.0**
            **%**





Cost
      of
      goods sold during the six months ended June 30, 2006 of $804,735 was $587,631
      higher than cost of goods sold during the six months ended June 30, 2005 of
      $217,104. This is due mainly to expenses related to the two conferences the
      Company hosted during the six months ended June 30, 2006. The total conference
      expenses for the two conferences were $425,690. By comparison, there were no
      conference expenses for the six months ended June 30, 2005. Also, there were
      higher staffing levels for the six months ended June 30, 2006 as compared to
      the
      six months ended June 30, 2005. Staff reductions and salary cuts had been put
      in
      place by the latter part of 2004 that carried over to 2005. Management
      implemented these reductions in an effort to bring expenses more in line with
      revenue at that time. By the second half of 2005, management began increasing
      staff levels. One Medical Assistant was added near the end of the 2nd quarter
      of
      2005. In the 3 rd quarter
      of 2005, a Patient Concierge was added along with a second Talk Therapist.
      These
      staff addition expenses continued into the six month period ended June 30,
      2006.
      Another reason for higher cost of goods sold in the six months ended June 30,
      2006 is due to research expenses of $69,320. These expenses represent outside
      costs incurred associated with the sexual intimacy study conducted by the
      company in the six months ended June 30, 2006. The Company earned revenue of
      $177,500 on the research project. By comparison, there was no research expenses
      in the six months ended June 30, 2005.





For
      the
      six months ended June 30, 2005, cost of services consisted of $203,289 in
      payroll related costs, outside lab costs of $12,090 and research expenses of
      $1,725. For the six months ended June 30, 2006, cost of services consisted
      of
      $291,159 in payroll related costs, conference expenses of $425,690, outside
      lab
      fees of $18,566 and research expenses of $69,320.




*Selling,
      General and Administrative Expenses*





****
            ****
            ***For
                the six months ended***
            ********
            ****
            **June
                30**
            ****
            **June
                30**
            ********
            ****
            **2006**
            ****
            **2005**
            ********
            ****
            **(unaudited)**
            ****
            **(unaudited)**Selling,
                  General & Administrative Expenses and Interest Expense:
            
            $
            942,949
            
            $
            1,258,334S,G&A
                (as a % of revenue)
            
            
            85.4
            %
            
            423.1
            %




25




Selling,
      general and administrative expenses and interest expense during the six months
      ended June 30, 2006 of $942,949 was $315,385 lower than selling, general and
      administrative expenses and interest expense for the six months ended June
      30,
      2005 of $1,258,334. This is mainly due to expenses related to the reverse merger
      and equity financing transaction which occurred during the six months ended
      June
      30, 2005. The expenses for the reverse merger and equity financing transaction
      during the six months ended June 30, 2005 amounted to $460,741 and consisted
      on
      the following expense categories: audit and legal fees pertaining to our
      registration statement on Form SB-2, subsequent amendment filings of Form SB-2,
      placement fees, roadshow expenses, filing fees stock transfer agent fees,
      various state and federal filing fees and interest expense .





For
      the
      six months ended June 30, 2005, the remaining significant components of selling,
      general and administrative expenses and interest expense consisted of the
      following: $251,611 in payroll related costs, $112,790 in expenses related
      to
      public relations, promotions and advertising, $138,623 in rent expense, $72,360
      in consultant and broker fees, $43,929 in supplies, utilities, postage and
      subscriptions, $12,147 in commercial insurance expenses, $16,270 in costs for
      systems and technology, $65,038 in depreciation expense and $30,358 in legal
      expenses.





The
      significant components of selling, general and administrative expenses and
      interest expense for the six months ended June 30, 2006 include: $328,086 in
      expenses related to payroll related costs, $145,575 in rent expense, $78,649
      in
      depreciation expense, $85,850 in consultant and broker fees, $49,888 in
      commercial insurance expenses, $46,456 in supplies, utilities, postage and
      subscriptions, $30,804 in public relations and travel and entertainment
      expenses, $73,122 in audit fees, 61,850 in legal fees, $10,724 in filing fees,
      4,500 in stock transfer agent fees, and $12,476 in costs related to systems
      and
      technology.




*Net
      Loss*





****
            ****
            ***For
                the six months ended***
            ********
            ****
            **June
                30**
            ****
            **June
                30**
            ********
            ****
            **2006**
            ****
            **2005**
            ********
            ****
            **(unaudited)**
            ****
            **(unaudited)**Net
                Profit / (Loss)
            
            
            ($643,154
            )
            
            ($1,178,008
            )%
                of Revenue
            
            
            -58.2
            %
            
            -396.1
            %





Net
      loss
      decreased from $1,178,008 in the six months ended June 30, 2005 to $643,154
      for
      the six months ended June 30, 2006. The positive change is mainly due to the
      significant increase in Media revenue in the six months ended June 30, 2006.
      The
      total revenue from media activities of $451,475 breaks down as follows:
      publishing revenue of $172,402 (primarily from the release of Dr. Berman’s new
      book ‘The Passion Prescription’); $233,373 revenue from the production of the
      Showtime television series entitled ‘Sexual Healing’ (this revenue represents 8
      weekly shows produced in total) and public relations revenue of $43,000 (this
      revenue is generated by the Company’s public relation employees spending a
      portion of their time providing public relation services to outside clients
      and
      invoicing those clients for these services); and $2,700 of revenue for
      television appearances by Dr. Laura Berman on the Fox News in the Morning TV
      show. There was no Media revenue for the six months ended June 30, 2005. The
      Company conducted a research project in the six months ended June 30, 2006.
      This
      study produced a net profit of $108,180. The Company also recognized Royalty
      revenue of $53,571 which have no costs associated with it. By comparison, in
      the
      six months ended June 30, 2005, the Company recognized only $50,000 of radio
      advertising revenue and $247,430 in clinic revenue. There was no revenue from
      television, the hosting of conferences, publishing, a research study or
      royalties during the related period in 2005. The losses the Company incurred
      during the six months ended June 30, 2006 would have been significantly less
      had
      the Company not have hosted the two conferences. The losses from hosting the
      two
      conferences during the six months ended June 30, 2006 were $232,315. The losses
      incurred from the conferences were primarily due to an insufficient number
      of
      registrants attending the conferences.





For
      the
      six months ended June 30, 2005, cost of services amounted to $217,104 resulting
      in a positive gross margin of $80,326. Selling, general and administrative
      expenses and interest expense totaled $1,258,334 which resulted in a net loss
      for the six months ended June 30, 2005 of $1,178,008.




26




For
      the
      six months ended June 30, 2006, cost of services amounted to $804,735 resulting
      in a positive gross margin of $299,795. Selling, general and administrative
      expenses and interest expense totaled $942,949 which resulted in a net loss
      for
      the six months ended June 30, 2006 of $643,154.





**Liquidity
      and Capital Resources**





At
      June
      30, 2006, we had current assets of $896,082 consisting of cash and cash
      equivalents of $614,890 and other current assets of $281,192. At June 30, 2006,
      we also had current liabilities of $1,089,766 consisting of accounts payable
      of
      $313,115 and other current liabilities of $776,651. This resulted in a negative
      net working capital at June 30, 2006 of $193,684. During the six months ended
      June 30, 2006, we used cash in operating activities of $520,098. From the date
      of inception (January 2003) to June 30, 2006, we have had a net loss of
      $5,308,568 and have used cash in the amount of $4,545,128 in operating
      activities. Effective July 27, 2006, the medical services portion of the
      clinic’s business is being discontinued and the focus shifts to talk therapy and
      individual and couples therapy retreats. There will be a decrease in clinic
      revenue as a result of this change along with a decrease in clinic costs and
      expenses. It is management intention to shift the emphasis of the clinic’s
      business to talk therapy and expand these clinic services and to increase clinic
      revenue by expanding talk therapy services and individual and couples therapy
      retreats.




During
      the six months ended June 30, 2006, the Company issued 1,290,971 shares to
      a
      warrant holder upon the exercise of warrants by such holder for a cash total
      exercise price of $388,750. In connection with this issuance, the Company issued
      600,000 warrants with respect to the execution of a placement agent
      agreement.




On
      June
      16, 2005, Berman Health and Media, Inc. closed a private placement offering
      of
      common stock and warrants (the “Units”) each consisting of (i) two shares of
      common stock, (ii) one three-year warrant exercisable into one share of common
      stock at an exercise price of $1.05 and (iii) one three year warrant exercisable
      into one share of common stock at an exercise price of $1.575. The price per
      Unit was $1.05. Berman Health and Media, Inc. sold an aggregate of 2,952,381
      Units and received $3,100,000 in gross proceeds from such sale. We have agreed
      to assume the warrants issued by Berman Health and Media, Inc. in the private
      placement. Each warrant is now exercisable into 1.535999487 shares of our common
      stock. These warrants are currently exercisable into an aggregate of 9,069,714
      shares of our common stock.





In
      connection with the private placement, Berman Health and Media, Inc. entered
      into an agreement with Hunter World Markets, Inc. (“HWM”), our former
      controlling stockholder and one of our current stockholders, pursuant to which
      HWM offered for sale the Units on a “best efforts” basis. As consideration for
      HWM’s services, we have paid HWM a $372,000 commission on the sale of the Units
      and three-year warrants exercisable into 906,971 shares of our common stock.




As
      a
      result of this private placement and the warrant exercise, we currently have
      sufficient funds on hand to fund our operations for the next quarter. We intend
      to seek additional financing in the future to fund our operations. Failure
      to
      secure additional financing in a timely manner and on favorable terms if and
      when needed in the future could have a material adverse effect on our financial
      performance, results of operations and stock price and require us to implement
      cost reduction initiatives and curtail operations.





The
      net
      proceeds from our recent private placement transaction in June 2005 was $2.3
      million. We have and intend to use the net proceeds from the private placement
      for expenses related to the private placement and reverse merger, for working
      capital and general corporate purposes. Since June of 2005 (the month of the
      reverse merger / private placement), we have hired eleven new employees with
      annual salaries of approximately $574,000. Some of these employees were
      subsequently terminated as a reduction-in-staff for purposes of cost savings
      which occurred during the 4 th quarter
      of 2005. We also have used approximately $60,000 to provide equipment and
      supplies for our new clinical office in Naperville, a suburb of Chicago,
      Illinois. The Company’s lease for the Naperville office space expired at the end
      of May 2006 and was not renewed and, as a result, this office was closed at
      that
      time. The Naperville office (a suburb of Chicago) served as a smaller second
      clinic facility. In addition, we used a portion of the net proceeds to market
      our services more aggressively than we have in the past. Beginning in September
      of 2005, the Company began aggressively advertising its services in magazines
      and on the radio. As of December 31, 2005, the Company spent $278,479 for such
      advertisements. Due to the high expense of advertising and its unsatisfactory
      level of effectiveness, the Company eliminated a major portion of its
      advertising campaign (for the three months ended March 31, 2006, the Company
      spent only $5,000 for advertising). In addition, we have and intend to use
      the
      net proceeds from the private placement to pay for ongoing legal and audit
      services and other fees related to our public filings with the Securities and
      Exchange Commission.




27




We
      currently lose approximately $200,000 per month. The Company’s lease for our
      Naperville office space expired at the end of May 2006 and was not renewed
      and,
      as a result, this office was closed at that time. The Naperville office (a
      suburb of Chicago) served as a smaller second clinic facility. The Company
      has
      incurred additional internal public relations costs through the hiring of three
      additional public relations employees during 2006. The company now has four
      public relation employees in house. The salaries, payroll taxes and benefits
      of
      four public relations employees is approximately $250,000 annually. These
      additional costs replace much of the promotional and advertising costs paid
      to
      outside firms in the past. Our independent registered public accounting firm
      has
      added an explanatory paragraph to their audit opinion issued in connection
      with
      the financial statements for the year ended December 31, 2005 relative to our
      ability to continue as a going concern. We plan to overcome the circumstances
      that impact our ability to remain a going concern through a combination of
      increased revenues and decreased costs, with interim cash flow deficiencies
      being addressed through additional equity financing. Our ability to obtain
      additional funding in year 2006 and thereafter will determine our ability to
      continue as a going concern. There can be no assurances that these plans for
      additional financing will be successful. Failure to secure additional financing
      in a timely manner and on favorable terms if and when needed in the future
      could
      have a material adverse effect on our financial performance, results of
      operations and stock price and require us to implement cost reduction
      initiatives and curtail operations.





Prior
      to
      converting into corporate form, Berman Center LLC sold in 2003, 2004 and 2005
      an
      aggregate of 3,767,390 membership interests in Berman Center LLC and received
      an
      aggregate of $2,966,223 in proceeds from such sales. These securities converted
      into 19,730,504 shares of our common stock upon consummation of the merger
      on
      June 16, 2005.




In
      addition, prior to converting into corporate form, Berman Center LLC issued
      to
      certain investors providing $400,000 in working capital in a bridge loan to
      Berman Center LLC, three and a half year (bridge) warrants exercisable into
      117,315 membership interests in Berman Center LLC at an exercise price of
      $1.074034786. These (bridge) warrants converted into warrants exercisable into
      400,000 shares of Berman Health and Media, Inc.’s common stock at an exercise
      price of $0.315 upon the reorganization of Berman Center LLC into corporate
      form. We agreed to assume these warrants in connection with the merger. Each
      warrant is now exercisable into 1.535999487 shares of our common stock. These
      warrants were exercisable into an aggregate of 614,400 shares of our common
      stock. On June 23, 2006, 384,000 of the 614,400 (bridge) warrants (associated
      with the working capital provided) were exercised and shares were issued. The
      transaction infused cash and paid-in-capital of $78,750 into the Company.
      Another 906,971 of placement agent warrants were also exercised on June 23,
      2006
      and shares were issued. This transaction resulted in $310,000 in cash and
      paid-in-capital being infused into the company.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements.





**RISK
      FACTORS**





Other
      than with respect to the following risk factors, which have been updated and
      restated in their entirety below, there have been no material changes from
      the
      risk factors disclosed in the “Risk Factors” section of our annual report on
      Form 10-KSB for the year ended December 31, 2005. With respect to this
      discussion, the terms “Berman Center,”  “Company”, "we," "us," and "our"
      refer to the registrant, Berman Center, Inc., and our wholly owned subsidiary,
      Berman Health and Media, Inc.





**We
      have a history of losses and we anticipate that our expenses will dramatically
      increase as we execute our business plan. Thus, we will likely experience
      continued losses in the near future and may not ever achieve or maintain
      profitability.**





We
      have
      incurred significant losses since we began our current operations in the female
      sexual health business in January 2003. As of June 30, 2006, we had an
      accumulated deficit of $5,308,568. Our losses for the six months ended June
      30,
      2006 and 2005 were $643,154 and $1,178,008, respectively, and our loss for
      the
      year ended December 31, 2005 was $2,421,768. Revenue from clinic operations,
      our
      primary source of revenue, for year ended December 31, 2005 decreased by
      $136,611 as compared to the year ended December 31, 2004, from $664,201 to
      $527,590. The decrease is primarily due to the difficulties management has
      had
      in adding a meaningful increase to patient flow at the clinic. Management has
      implemented three price decreases for our clinic services since the opening
      of
      the clinic, which has also contributed to the decrease. Management implemented
      these price changes in an attempt to draw more patients to the clinic. In some
      months patient flow did in fact increase but overall not enough to cover the
      price changes. Effective July 27, 2006, the medical services portion of the
      clinic’s business is being discontinued and the focus shifts to talk therapy and
      individual and couples therapy retreats. There will be a decrease in clinic
      revenue as a result of this change along with a decrease in clinic costs and
      expenses. It is management intention to shift the emphasis of the clinic’s
      business to talk therapy and expand these clinic services and to increase clinic
      revenue by expanding talk therapy services and individual and couples therapy
      retreats.




28




We
      currently lose approximately $200,000 per month; and, there is no guarantee
      that
      our losses will decrease or become zero. We plan to reduce expenses should
      our
      future revenue not materialize as expected. If our revenues grow more slowly
      than anticipated or if our operating expenses exceed expectations, we will
      continue to operate at a loss and may not be able to achieve or maintain
      profitability.




**We
        have discontinued the medical services portion of our business, which has
        historically accounted for a significant percentage of our revenues, and
        if we
        fail to replace that source of revenue, our results of operations could be
        materially and adversely affected.**
 
 Effective
        July 2006, the medical services portion of our clinic’s business is being
        discontinued and the focus shifts to talk therapy and individual and couples
        therapy retreats. The medical services portion of our business has accounted
        for
        a significant portion of our revenues in the past and we expect that our
        business will experience a decrease in clinic revenue as a result of this
        change. There is also a risk that we may lose customers for our talk therapy
        services as a result of not providing the medical services portion of our
        business, which would further reduce our revenues and could harm our results
        of
        operations. In addition, if the revenue from our talk therapy and other portions
        of our business do not increase, our business and results of operations could
        materially and adversely affect our results of operations and growth
        opportunities.


**ITEM
      3. CONTROLS AND PROCEDURES**





**(a)
      Evaluation of disclosure controls and procedures**





As
      of
      June 30, 2006, our management, with the participation of our Chief Executive
      Officer, or “CEO,” and Chief Financial Officer, or “CFO,” performed an
      evaluation of the effectiveness and the operation of our disclosure controls
      and
      procedures as defined in Rules 13a-15(e) or 15d-15(e) under the Securities
      Exchange Act of 1934, as amended, or the “Exchange Act.” Based on that
      evaluation, the CEO and CFO concluded that our disclosure controls and
      procedures were effective as of June 30, 2006.





**(b)
      Changes in internal control over financial reporting**





There
      have been no changes in our internal control over financial reporting identified
      in connection with the evaluation required by paragraph (d) Rule 13a-15 or
      15d-15 under the Exchange Act that occurred during the three months ended June
      30, 2006 that has materially affected, or is reasonably likely to affect, our
      internal control over financial reporting.




29




**PART
      II-OTHER INFORMATION**





**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





We
      are
      not currently a party to any material legal proceedings.





**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





None.





**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES.**





None.





**ITEM
      4.**  **SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5.**  **OTHER
      INFORMATION**


Effective
          July 27, 2006, the medical services portion of the clinic’s business is being
          discontinued and the focus shifts to talk therapy and individual and couples
          therapy retreats. There will be a decrease in clinic revenue as a result
          of this
          change along with a decrease in clinic costs and expenses. It is management’s
          intention to shift the emphasis of the clinic’s business to talk therapy and
          expand these clinic services and to increase clinic revenue by expanding
          talk
          therapy services and individual and couples therapy retreats.
 
 On
          July
          25, 2006, William McDunn, the Chief Financial Officer of Berman Center,
          Inc.
          (the “Company”), resigned from his position effective August 15, 2006. Mr.
          McDunn’s resignation was for personal reasons and not due to any disagreement
          with the Company. Carlos Bernal, 37, will replace Mr. McDunn as the Chief
          Financial Officer of the Company beginning on August 16, 2006. Mr. Bernal
          has
          served as the Company’s Senior Accountant since November 2005. He worked in a
          temporary capacity at the Company beginning June 2005 and was hired as
          a
          permanent employee in November 2005. From September 2002 to April 2005,
          Mr.
          Bernal worked as Vice President and Chief Financial Officer at the Latin
          American Chamber of Commerce in Chicago, Illinois. Prior to working at
          the Latin
          American Chamber of Commerce, Mr. Bernal worked as a Senior Personal Financial
          Analyst at Primerica, Inc. from May 2002 to September 2002. From October
          2001 to
          April 2002, he worked as a Service Advisor at Metro Toyota, Inc. in Chicago,
          Illinois and from September 1999 to May 2001 he worked as Chief Financial
          Officer and Chief Operations Officer at LaSalle Technology, Inc. in Chicago,
          Illinois. Mr. Bernal received his Bachelor of Science degree in Business
          Accounting from the University of Phoenix and is currently pursuing his
          Master
          Degree in Accounting and Financial Management from DeVry University. Mr.
          Bernal
          is a member of the National Association of Latino Fraternal
          Organizations.


30




**ITEM
      6.**  **EXHIBITS**





(a)
      Exhibits





31.1
            Certification
                of Chief Executive Officer pursuant to Section 302(a) of the
                Sarbanes-Oxley Act of 2002.31.2
            Certification
                of Chief Financial Officer pursuant to Section 302(a) of the
                Sarbanes-Oxley Act of 2002.32.1
            Certification
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002.*







*
      This
      exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities
      Exchange Act of 1934 or otherwise subject to the liabilities of that section,
      nor shall it be deemed incorporated by reference in any filing under the
      Securities Act of 1933 or the Securities Exchange Act of 1934, whether made
      before or after the date hereof and irrespective of any general incorporation
      language in any filings.





31





**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.




**BERMAN
                CENTER, INC.**
              (Registrant)Date: August
                14, 2006
            By:
            /s/ Samuel
              ChapmanSamuel
                Chapman
              Chief
                  Executive Officer and Chairman of the Board
                (Principal
                  Executive Officer)




32