UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended December 31, 2005
                                     -----------------

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ______________ to ______________

                        Commission file number 000-51158

                                TRUEYOU.COM, INC.
                                -----------------
             (Exact name of Registrant as Specified in Its Charter)

           Delaware                                       13-4024017
---------------------------------------------- ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)
---------------------------------------------- ---------------------------------

       Building No. 501, Fifth Floor, 7 Corporate Park, Norwalk, CT 06851
       ------------------------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

        Registrant's Telephone Number Including Area Code: (203) 295-2121

             501 Madison Avenue, Suite 407, New York, New York 10022
             -------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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 X No __

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes __ No X___

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of common stock, par value $0.001 per share, outstanding as
of February 17, 2006 was 14,995,513.


<PAGE>



                                TRUEYOU.COM, INC.
                                    FORM 10-Q
                     FOR THE QUARTER ENDED DECEMBER 31, 2005
                                TABLE OF CONTENTS



PART I            FINANCIAL INFORMATION                                        3

  Item 1.      Financial Statements                                            3

     Condensed Consolidated Balance Sheets as of December 31, 2005
         (unaudited) and June 30, 2005 (restated)                              3

     Condensed Consolidated  Statements of Operations for the three
         months and six months ended December 31, 2005 and December
         31, 2004 (unaudited)                                                  5

     Condensed Consolidated Statements of Shareholders' Deficit for
         the six months ended December 31, 2005 (unaudited)                    6

     Condensed  Consolidated  Statements  of Cash Flows for the six
         months  ended  December  31,  2005 and  December  31, 2004
         (unaudited)                                                           6

     Notes to Condensed Consolidated Financial Statements                     17

  Item 2.      Management's Discussion and Analysis of Financial Condition
                and Results of Operations.                                    16

  Item 3.      Quantitative and Qualitative Disclosure About Market Risk.     31

  Item 4.      Controls and Procedures                                        31

PART II           OTHER INFORMATION                                           33

  Item 6.      Exhibits                                                       33

SIGNATURES                                                                    34

EXHIBIT INDEX                                                                 35






                                      -2-
<PAGE>


PART I        FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                    TRUEYOU.COM, INC.
                                          CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                                    AS OF
----------------------------------------------------------------------------------- ------------------- ------------------
                                                                                       DECEMBER 31,         JUNE 30,
                                                                                    ------------------- ------------------
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                                           2005               2005
                                                                                       (Unaudited)        (As Restated)
----------------------------------------------------------------------------------- ------------------- ------------------
<S>                                                                                 <C>                 <C>
ASSETS:
    CURRENT ASSETS:
    Cash and cash equivalents                                                       $          13,573   $             173
    Restricted cash, current portion                                                            2,270               1,228
    Inventories                                                                                 2,532               1,977
    Other current assets                                                                        1,387                 704
                                                                                    ------------------- ------------------
          TOTAL CURRENT ASSETS                                                                 19,762               4,082

    Property and equipment, net                                                                 8,385               6,561
    Other assets                                                                                  505                 392
    Deferred financing costs, net                                                                 329                 330
    Restricted cash, non-current portion                                                            -                 369
    Goodwill                                                                                   18,072              18,072
    Other intangibles, net                                                                      5,897               7,115
                                                                                    ------------------- ------------------
          TOTAL ASSETS                                                              $          52,950   $          36,921
                                                                                    =================== ==================

LIABILITIES AND SHAREHOLDERS' DEFICIT:

LIABILITIES:
    CURRENT LIABILITIES:
    Cash overdraft                                                                  $               -   $             163
    Accounts payable                                                                            3,475               3,632
    Accrued expenses and other current liabilities                                              9,120               9,914
    Deferred revenue                                                                            9,336               8,882
    Current portion of long term debt                                                               -                 744
                                                                                    ------------------- ------------------
          TOTAL CURRENT LIABILITIES                                                            21,931              23,335
    Senior debt (net of debt discount of $1.009 million and $1.164 million as of
      December 31, 2005 and June 30, 2005, respectively)                                        8,991               8,836
    KAAI senior subordinated debt (net of debt discount $1.234 million as of June
      30, 2005)                                                                                     -              12,066
    Other long term debt (net of current portion)                                               1,000               7,061
    Convertible securities                                                                     64,882                   -
    Other long term liabilities                                                                 9,384               9,780
                                                                                    ------------------- ------------------
          TOTAL LIABILITIES                                                                   106,188              61,078
                                                                                    ------------------- ------------------

SHAREHOLDERS' DEFICIT:
    KAAI Preferred stock,  series A, cumulative,  convertible,  redeemable,  par
      value $.001,  authorized  20,000 shares as of December 31, 2005 and June 30,
      2005;  issued and  outstanding  0 and 7,950 as of December 31, 2005 and June
      30, 2005, respectively                                                                        -               2,130


                                      -3-
<PAGE>

                                                                                                    AS OF
----------------------------------------------------------------------------------- ------------------- ------------------
                                                                                       DECEMBER 31,         JUNE 30,
                                                                                    ------------------- ------------------
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                                           2005               2005
                                                                                       (Unaudited)        (As Restated)
----------------------------------------------------------------------------------- ------------------- ------------------
    KAAI Preferred  stock,  series B, cumulative,  redeemable,  par value $.001,
      authorized  600,000 shares as of December 31, 2005 and June 30, 2005; issued
      and  outstanding  0 and 1,900  shares as of  December  31, 2005 and June 30,
      2005, respectively                                                                            -                 965
    KAAI Preferred  stock,  series C, cumulative,  redeemable,  par value $.001,
      authorized  20,000 shares as of December 31, 2005 and June 30, 2005;  issued
      and  outstanding  0 and 1,300  shares as of  December  31, 2005 and June 30,
      2005, respectively                                                                            -                 350
    KAAI Preferred  stock,  series D, cumulative,  redeemable,  par value $.001,
      authorized  8,200 shares as of December  31, 2005 and June 30, 2005;  issued
      and outstanding 0 and 8,200 shares as of December 31, 2005 and June 30, 2005
      respectively                                                                                  -               8,146
    KAAI Preferred stock, series E, preferred stock, par value $.001, authorized
      500 shares as of December 31, 2005 and June 30, 2005; issued and outstanding
      500 shares a of December 31, 2005 and June 30, 2005                                           -                 135
      KAAI common stock, par value $.01, authorized 70,000,000 ; issued and
      outstanding  9,268,609 shares, as of  June 30, 2005                                           -                  93
    TrueYou Common stock, par value $0.001,  authorized  20,000,000;  issued and
      outstanding 14,995,513 and 12,970,515, as of December 31, 2005 and June 30,
      2005, respectively                                                                           15                   -
    Additional paid-in capital                                                                  4,288               3,765
    Accumulated deficit                                                                       (57,541)            (39,741)
                                                                                    ------------------- ------------------

    Total shareholders' deficit                                                               (53,238)            (24,157)
                                                                                    ------------------- ------------------

    Total liabilities and shareholders' deficit                                     $          52,950   $          36,921
                                                                                    =================== ==================

The accompanying notes are an integral part of the consolidated financial statements

</TABLE>





                                      -4-
<PAGE>



                                TRUEYOU.COM, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 SIX MONTHS ENDED                   THREE MONTHS ENDED
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS           DECEMBER 31,     DECEMBER 31,      DECEMBER 31,      DECEMBER 31,
------------------------------------------------           ------------     ------------      ------------      ------------
                                                               2005             2004              2005              2004
REVENUES:
<S>                                                      <C>               <C>              <C>               <C>
   Service                                               $       11,954    $       12,190   $        6,091    $        6,557
   Retail                                                         3,364             3,847            1,462             1,773
                                                         ---------------   ---------------  ---------------   ---------------
TOTAL REVENUE                                                    15,318            16,037            7,553             8,330
COST OF REVENUE:
   Service                                                        6,860             6,940            3,472             3,517
   Retail                                                         1,360             1,426              572               683
                                                         ---------------   ---------------  ---------------   ---------------
TOTAL COST OF REVENUE                                             8,220             8,366            4,044             4,200

GROSS MARGIN                                                      7,098             7,671            3,509             4,130

Selling, general and administrative expenses                     16,798            14,176            9,693             7,755
Depreciation and amortization                                     2,268             1,818            1,159               947
                                                         ---------------   ---------------  ---------------   ---------------
TOTAL OPERATING EXPENSES                                         19,066            15,994           10,852             8,702

Operating loss                                                  (11,968)           (8,323)          (7,343)           (4,572)
Interest expense, net                                             2,999             1,910            1,995               983
                                                         ---------------   ---------------  ---------------   ---------------
Loss before income tax provision                                (14,967)          (10,233)          (9,338)           (5,555)

Income tax provision (benefit)                                        -                 -                -                 -
------------------------------------------------         ---------------   ---------------  ---------------   ---------------

NET LOSS                                                        (14,967)          (10,233)          (9,338)           (5,555)

Dividends on preferred stock                                        362               647             (101)              376
------------------------------------------------         ---------------   ---------------  ---------------   ---------------

Net loss applicable to common shareholders               $      (15,329)   $      (10,880)  $       (9,237)   $       (5,931)
================================================         ===============   ===============  ===============   ===============


Basic and diluted loss per common share:                 $        (1.02)   $        (1.17)  $        (0.62)   $        (0.64)
================================================         ===============   ===============  ===============   ===============

Weighted average common shares outstanding,
  basic and diluted                                          14,995,513         9,268,609       14,995,513         9,268,609
================================================         ===============   ===============  ===============   ===============

  The accompanying notes are an integral part of the consolidated financial statements

</TABLE>


                                      -5-
<PAGE>


<TABLE>
<CAPTION>
                                TRUEYOU.COM, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                   (unaudited)

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                ADDITIONAL
                                                     PREFERRED STOCK          COMMON STOCK         PAID     ACCUMULATED
IN THOUSANDS, EXCEPT SHARE AMOUNTS                 SHARES      AMOUNT      SHARES      AMOUNT   IN CAPITAL    DEFICIT       TOTAL
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>         <C>      <C>        <C>       <C>         <C>            <C>
BALANCE AT JUNE 30, 2005 (AS RESTATED)              19,796      11,726   9,268,609  $     93  $   3,765   $   (39,741)   $  (24,157)
------------------------------------------------------------------------------------------------------------------------------------

Issuance of KAAI series G preferred stock           10,775   $  10,775                                                   $   10,775
Issuance of KAAI series H preferred stock            5,000       5,000                                                        5,000
Dividends Declared                                                                                 (463)                       (463)
Issuance costs related to KAAI series G
  preferred stock (allocated) $500k                                                                (340)                       (340)
Issuance costs related to KAAI series H
  preferred stock (allocated) $500k                                                                (160)                       (160)
Issuance costs related to KAAI series G
  preferred stock (allocated) $268k                                                                (182)                       (182)
Issuance costs related to KAAI series H
  preferred stock (allocated) $268k                                                                 (86)                        (86)
Issuance costs related to KAAI series G
  preferred stock                                                                                  (195)                       (195)
Beneficial Conversion associated with KAAI
  series G preferred stock                                                                        1,073        (1,073)            -
Beneficial Conversion associated with KAAI
  series H preferred stock                                                                          463          (463)            -
Warrant attributed to KAAI series G preferred
  stock                                                         (1,073)                           1,073
Warrant attributed to KAAI series H preferred
  stock                                                           (462)                             462
Reversal of June prior period adjustment                             -
Net loss for 3 months ended Oct 1, 2005                                                                        (5,732)       (5,732)
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 1, 2005 (AS RESTATED)            35,571   $  25,966   9,268,609  $     93  $   5,410   $   (47,009)   $  (15,541)
------------------------------------------------------------------------------------------------------------------------------------

Exchange of KAAI Series A preferred stock for
  TrueYou Series B Preferred Stock                  (7,950)     (2,130)                                                      (2,130)
Exchange of KAAI Series B preferred stock for
  TrueYou Series B Preferred Stock                  (1,900)       (965)                                                        (965)
Exchange of KAAI Series C preferred stock for
  TrueYou Series B Preferred Stock                  (1,300)       (350)                                                        (350)
Exchange of KAAI Series D preferred stock for
  TrueYou Series B Preferred Stock                  (8,146)     (8,146)                                                      (8,146)
Exchange of KAAI Series G preferred stock for
  TrueYou series C Preferred Stock                 (10,775)     (9,702)                                                      (9,702)
Exchange of KAAI Series H preferred stock for
  TrueYou series C Preferred Stock                  (5,000)     (4,538)                                                      (4,538)
Elimination of KAAI Series E preferred stock          (500)       (135)                            135                            -
Beneficial Conversion associated with TrueYou
  Series D Preferred Stock                                                                         1295        (1,295)            -
Exchange  of KAAI common stock for TrueYou
  series B Preferred Stock                                              (9,268,609)      (93)                                   (93)
Recognition of Common Stock of TrueYou                                  14,995,513        15                                     15
Elimination of TrueYou accumulated deficit                                                        3,348                       3,348
Reclassification of TrueYou additional paid in
  capital                                                                                        (3,323)                     (3,323)
Issuance costs related to TrueYou Series D
  Preferred Stock                                                                                  (257)                       (257)
Stock based compensation expense                                                                    150                         150
Warrant attributed to TrueYou Series D Preferred
  Stock                                                                                           1,295                       1,295
Classification of KAAI series B warrants as
  liabilities                                                                                      (935)                       (935)
Classification of KAAI series G warrants as
  liabilities                                                                                    (1,073)                     (1,073)
Classification of KAAI series H warrants as
  liabilities                                                                                      (462)                       (462)
Classification of KAAI series D warrants as
  liabilities                                                                                    (1,295)                     (1,295)
Forfeiture of dividends net of dividends accrued                                                                  101           101
Net loss for the three months ended 12/31/05                                                                   (9,338)       (9,338)
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2005                             -   $       -  14,995,513  $     15  $   4,288   $   (57,541)   $  (53,238)
------------------------------------------------------------------------------------------------------------------------------------

  The accompanying notes are an integral part of the consolidated financial statements
</TABLE>



                                      -6-
<PAGE>


<TABLE>
<CAPTION>
                                TRUEYOU.COM, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                          SIX MONTHS ENDED
----------------------------------------------------------------------------------------------------------------------
IN THOUSANDS                                                                      DECEMBER 31,        DECEMBER 31,
                                                                                      2005                2004
----------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
    Net loss                                                                    $(14,967)          $(10,232)
    Adjustments to reconcile net loss to net cash used
      in operating activities:
    Depreciation and amortization                                                  2,268                845
    Stock based compensation expense                                                 150                  -
    Non-cash interest expense                                                      1,389                  9
CHANGES IN OPERATING ASSETS AND LIABILITIES:
    Inventories                                                                     (558)              (407)
    Other current assets                                                            (641)              (542)
    Other assets                                                                    (113)              (637)
    Accounts payable                                                                (158)             1,176
    Accrued expenses                                                                 379              3,838
    Deferred revenue                                                                 454                897
-------------------------------------------------------------------------------------------------------------
        NET CASH USED IN OPERATING ACTIVITIES                                    (11,797)            (5,053)
-------------------------------------------------------------------------------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
    Capital expenditures                                                          (2,837)              (890)
    Purchase of intangible asset                                                     (38)                23
-------------------------------------------------------------------------------------------------------------
        NET CASH USED IN INVESTING ACTIVITIES                                     (2,875)              (867)
-------------------------------------------------------------------------------------------------------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
    Cash overdraft                                                                  (163)                 -
    Restricted cash                                                                 (673)               304
    Proceeds of Issuance of long term debt net of deferred financing costs             -               (247)
    Proceeds of issuance of debt                                                       -              1,010
    Other long-term liabilities                                                     (370)                 -
    Proceeds of issuance of TrueYou Series D Preferred Stock                      15,221                  -
    Proceeds of issuance of KAAI Series G preferred stock                         10,203                  -
    Repayment of Sellers Note                                                       (900)                 -
    Proceeds of issuance of KAAI Series F preferred stock                          4,754                  -
-------------------------------------------------------------------------------------------------------------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                 28,072              1,067
-------------------------------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                                  13,400             (4,853)
Cash and cash equivalents - beginning of period                                      173              6,689
Cash and cash equivalents - end of period                                       $ 13,573              1,836
SUPPLEMENTAL CASH FLOW INFORMATION
    NON-CASH FINANCING ACTIVITIES:
      Preferred stock dividends, net of preferred stock forfeitures             $    365           $    700
      Reclassification of preferred stock into convertible securities           $ 11,726           $      -
      Beneficial conversion feature on preferred stock                          $  2,830           $      -
      Exchange of KAAI Common Stock for TrueYou Series B Preferred Stock        $     93           $      -
      Exchange of KAAI accrued dividends for TrueYou Series B Preferred Stock   $    464           $      -
      Exchange of KAAI long term debt for TrueYou Series B Preferred Stock      $ 19,205           $      -
      Exchange of KAAI accrued interest for  TrueYou Series B Preferred Stock   $  1,598           $      -
      Classification of KAAI warrants issued with KAAI preferred stock as       $  3,765           $      -
        liabilities

  The accompanying notes are an integral part of the consolidated financial statements
</TABLE>



                                      -7-
<PAGE>


                                TRUEYOU.COM, INC.

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Unless   otherwise   indicated:   references  to  "TrueYou"   refer  to
TrueYou.Com,  Inc.;  references to "KAAI" refer to Klinger Advanced  Aesthetics,
Inc. and its  consolidated  subsidiaries;  references  to the  "Company,"  "we,"
"our," and "us" refer to  TrueYou.Com,  Inc. and its  consolidated  subsidiaries
(including  KAAI);  and the terms  "fiscal  quarter" and "three  months" in this
Quarterly Report on Form 10-Q refer to the quarter ended December 31, 2005.

1.       BUSINESS AND BASIS OF PRESENTATION

         We offer both  cosmetic  services and medical  procedures  to customers
under one delivery  system and bring cosmetic  surgery,  cosmetic  dentistry and
dermatology,  and salon and spa services  together under a single brand,  giving
clients  access to top service  providers,  unique  treatments  and  predictable
results in a state of the art  environment.  We co-brand our trade name with the
trade names of the salons and spas that we  acquired.  Our salons and spas share
certain  corporate  resources  such  as  senior  management  and  administrative
services. As of December 31, 2005 the Company had 576 employees.

         KAAI is the operating subsidiary of TrueYou. The consolidated financial
statements  presented  herein  pertain  to  the  Company  and  its  subsidiaries
(including  KAAI)  on a  consolidated  basis  and all  significant  intercompany
accounts and transactions have been eliminated in consolidation.

         The accompanying consolidated financial statements included herein have
been  prepared  by the  Company  pursuant  to the rules and  regulations  of the
Securities and Exchange  Commission  (the  "Commission")  for interim  financial
information.  Accordingly,  they  do not  include  all of  the  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States of America for complete  financial  statement  presentation and should be
read in conjunction with KAAI's audited  consolidated  financial  statements and
related  footnotes  thereto for the fiscal year ended June 30, 2005  included in
the  Company's  Current  Report on Form  8-K/A,  filed  with the  Commission  on
February 21, 2006.

         The  consolidated  balance sheet of the Company as of June 30, 2005 was
derived  from  audited  consolidated  financial  statements.   The  consolidated
financial  statements  presented  in this  quarterly  report are  unaudited  but
include all adjustments  that are of a normal  recurring  nature that management
considers  necessary  for the fair  statement  of the  results  for the  interim
periods.  Results for interim periods are not necessarily  indicative of results
for the full fiscal year.

Share Exchange Agreement:

         On  December  20,  2005,  the  Company  entered  into a Share  Exchange
Agreement (the "Share Exchange Agreement") with KAAI and securityholders of KAAI
(the "KAAI  Securityholders")  pursuant to which KAAI  Securityholders  received
newly issued securities of TrueYou in exchange for their securities of KAAI.

         KAAI was formed  under the name  Advanced  Aesthetics,  Inc. in 2003 by
principals  of Kidd & Company,  LLC  ("KCO"),  a  Greenwich,  Connecticut  based
principal investment firm. On January 9, 2006, Advanced Aesthetics, Inc. changed
its name to Klinger Advanced Aesthetics, Inc.



                                      -8-
<PAGE>

Revenue Recognition:

         The Company  recognizes  revenue in  accordance  with Staff  Accounting
Bulletin No. 104 (SAB 104 "Revenue Recognition") at the time the customer either
receives  services or takes  possession of merchandise and pays for such service
or merchandise with cash, check, gift card or a credit card.

         When the Company  receives  payment from customers  before the services
have been  performed or the customer has taken  possession  of the  merchandise,
which  principally  relates to the sale of gift  cards,  the amount  received is
recorded as deferred  revenue on the Company's  consolidated  balance sheet. The
liability  remains  on the  balance  sheet  until  the  earlier  of  redemption,
escheatment or 36 months. It is the Company's and its  predecessors'  historical
experience that the likelihood of redemption after 36 months is remote. After 36
months,  80% of the remaining  liability is relieved and  recognized as revenue.
After 48 months,  an additional  10% of the remaining  liability is relieved and
recognized as revenue.  After 60 months, the last 10% of the remaining liability
is relieved and recognized as revenue.  For the six month periods ended December
31, 2005 and 2004, the Company included $0.4 million and $0.0, respectively,  in
income related to unredeemed gift cards.

Cost of Revenue:

         Cost of sales for services include  salaries  associated with employees
that are  directly  related to  providing  various  services to  clients.  These
services include hair cuts, hair coloring, facials, medical procedures,  waxing,
massages, pedicures and manicures. In addition, the cost of products utilized as
part of the service is also included in cost of revenues.

         Product costs are determined by utilizing the cost that the product was
acquired  for from various  vendors and  manufacturers  on a first-in  first-out
(FIFO) basis.  Significant  changes in product costs,  product pricing,  revenue
mix, shrinkage and vendor allowances and rebates could have a material impact on
our gross margin.

Property & Equipment:

         Property  and   equipment  are  carried  at  cost,   less   accumulated
depreciation and  amortization.  Property,  equipment and improvements to leased
premises  are  depreciated  using the  straight-line  method over the  estimated
useful lives of the assets or when applicable,  the term of the lease, whichever
is  shorter.  Estimated  useful  lives  generally  range  from 5 to 15 years for
leasehold  improvements and 3 to 7 years for fixtures and equipment.  Repair and
maintenance expenses,  which do not improve or extend the life of the respective
assets,  are charged  directly to expense as incurred.  The Company  maintains a
policy to capitalize  all property and equipment  purchases in excess of $1,000.
The assets and related  depreciation and amortization  accounts are adjusted for
property  retirements  and disposals with the resulting gain or loss included in
operations.  Fully depreciated  assets remain in the accounts until retired from
service.

         The Company  capitalizes both internal and external costs of developing
or  obtaining  computer  software for internal  use.  Costs  incurred to develop
internal-use software during the application  development stage are capitalized,
while  data   conversion,   training  and  maintenance   costs  associated  with
internal-use software are expensed as incurred.  Amortization expense related to
capitalized  software is determined based on an estimated useful life of five or
seven years.



                                      -9-
<PAGE>

Goodwill:

         Goodwill  is tested  for  impairment  annually  or more  frequently  in
accordance  with the provisions of Statement of Financial  Accounting  Standards
No. 142, "Goodwill and Other Intangible Assets." Fair values are estimated based
on the  Company's  best  estimate of the expected  present  value of future cash
flows and compared with the corresponding  carrying value of the reporting unit,
including  goodwill.  The Company considers its facilities to be reporting units
when it tests for goodwill impairment because that is where the Company believes
goodwill naturally resides. The Company tested for goodwill at June 30, 2005 and
determined  that the estimated fair value of the reporting  units exceeded their
carrying amounts, indicating no impairment of goodwill. A similar review will be
conducted  annually in June,  or more  frequently  if  indicators  of  potential
impairment exist.

         The Company's impairment review process is based on a discounted future
cash flow  approach  that uses  estimates of revenues for the  reporting  units,
driven by assumed growth rates, estimated future gross margin and expense rates,
as well as acquisition  integration  and maturation,  and  appropriate  discount
rates. These estimates are consistent with the plans and estimates that are used
to manage the  underlying  businesses.  Charges for impairment of goodwill for a
reporting  unit may be  incurred  in the future if the  reporting  unit fails to
achieve its assumed revenue growth rates or assumed gross margin, or if interest
rates increase significantly.

Recently Issued Accounting Pronouncements:

         In October 2005,  the Financial  Accounting  Standards  Board  ("FASB")
issued FASB Staff Position  ("FSP") 13-1,  "Accounting for Rental Costs Incurred
during the Construction  Period." FSP 13-1 requires rental costs associated with
ground or building  operating  leases that are  incurred  during a  construction
period be recognized as rental expense. FSP 13-1 becomes effective for the first
reporting period beginning after December 15, 2005. KAAI is assessing the impact
of the adoption of FSP 13-1 on the Company's  consolidated  financial statements
commencing in the quarter ending March 31, 2006.

         In June 2005, the FASB's Emerging Issues Task Force reached a consensus
on  Issue  No.  05-6,   "Determining  the  Amortization   Period  for  Leasehold
Improvements   Purchased  after  Lease  Inception  or  Acquired  in  a  Business
Combination."  EITF 05-6 requires  leasehold  improvements  purchased  after the
beginning  of the  initial  lease term to be  amortized  over the shorter of the
assets'  useful life or a term that  includes the  original  lease term plus any
renewals that are reasonably assured at the date the leasehold  improvements are
purchased.  This guidance was effective for reporting  periods  beginning  after
June 29, 2005.  The adoption of this guidance did not have a material  impact on
the Company's consolidated financial statements.

2.       SHAREHOLDERS DEFICIT

         On December 20, 2005, TrueYou  consummated the Share Exchange Agreement
with KAAI and the KAAI  Securityholders.  Under the terms of the Share  Exchange
Agreement,  TrueYou issued to the KAAI  Securityholders:  (i) 27,926.4689  newly
issued  shares of Series B  Convertible  Preferred  Stock,  par value $0.001 per
share (the "Series B Preferred Stock"), each of which is convertible into 10,000
shares of TrueYou's Common Stock,  par value $0.001 per share ("Common  Stock"),
(ii) 8,452.0222 newly issued shares of Series C Convertible Preferred Stock, par
value  $0.001  per share  (the  "Series C  Preferred  Stock"),  each of which is
convertible  into 10,000 shares of Common Stock and (iii) newly issued  warrants
to purchase 3,969.0363 shares of Series B Preferred Stock.

         Under the terms of the Share Exchange Agreement, the outstanding shares
of series A preferred stock,  series B preferred stock, series C preferred stock
and series D preferred stock of KAAI, the



                                      -10-
<PAGE>

outstanding senior  subordinated debt, other long term debt, accrued interest on
the other long term debt and certain accrued dividends,  which immediately prior
to the  consummation of the Share Exchange  Agreement were converted into KAAI's
common stock,  were exchanged for Series B Preferred  Stock of the Company.  The
outstanding  shares of series G preferred  stock and series H preferred stock of
KAAI were exchanged for Series C Preferred Stock of the Company.

         The following  table reflects the amounts of KAAI  securities that were
converted into common stock of KAAI and subsequently exchanged for securities of
the Company under the Share Exchange Agreement:

<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
Securities exchanged for Series B Convertible Preferred Stock of the Company
<S>                                                                                    <C>
       Note payable, Kidd & Company                                                    $        5,905
       Accrued Interest on note payable                                                         1,598
       Senior subordinated debt (gross)                                                        13,300
       KAAI Common Stock                                                                           93
       KAAI series A convertible preferred stock                                                2,130
       KAAI series B convertible preferred stock                                                  965
       KAAI series C convertible preferred stock                                                  350
       KAAI series D convertible preferred stock                                                8,146
       Accrued preferred dividends on KAAI preferred stock                                        464
--------------------------------------------------------------------------------------------------------
Subtotal of securities exchanged for Series B Preferred Stock of the Company           $       32,951
--------------------------------------------------------------------------------------------------------

Securities exchanged for Series C Preferred Stock of the Company
       KAAI series G redeemable convertible preferred stock                            $        9,702
       KAAI series H redeemable convertible preferred stock                                     4,538
--------------------------------------------------------------------------------------------------------
Total securities exchanged for Series C Preferred Stock of the Company                 $       14,240
--------------------------------------------------------------------------------------------------------
</TABLE>

         On December 22, 2005, affiliates of North Sound Capital LLC and Valesco
Capital  Management LP invested $15.3 million in exchange for 1,530 newly issued
shares of our Series D Convertible  Preferred  Stock, par value $0.001 per share
(the "Series D Preferred  Stock" and together with the Series B Preferred  Stock
and the  Series C  Preferred  Stock,  the  "Preferred  Stock").  Issuance  costs
associated with the round of financing  amounted to approximately  $0.4 million.
The Company also issued  warrants to purchase shares of Series B Preferred Stock
with the Series D Preferred  Stock,  which were valued  using the Black  Scholes
option pricing model using the following assumptions: risk free rate of return -
4.36;  term - 5  years;  volatility  - 30%;  dividend  yield - 0.0%.  The  value
ascribed  to the  warrant  was $1,295 and was  recorded  as a  reduction  to the
Preferred  Stock.  As a result of the value being  allocated to the warrants,  a
beneficial  conversion  feature resulted on the Series D Preferred  Stock.  This
additional amount to Series D Preferred Stock shareholding, amounting to $1,295,
was  recorded as an increase  in  additional  paid in capital and an increase in
accumulated deficit.

         The shares of Series B Preferred Stock will automatically  convert into
Common Stock after the Company amends it Certificate of  Incorporation  in order
to  increase  the number of shares of Common  Stock it is  authorized  to issue.
Subject to certain  restrictions,  the  shares of Series C  Preferred  Stock and
Series D Preferred Stock will  automatically  convert into Common Stock upon the
consummation of an underwritten public offering with gross proceeds to us of not
less than $30 million.

         Since the Company does not have sufficient  number of authorized shares
of Common Stock to allow for the  conversion of the Preferred  Stock into Common
Stock or the  exercise  of  warrants  for  Series



                                      -11-
<PAGE>

B  Preferred  Stock that may  ultimately  be  converted  into Common  Stock,  in
accordance with EITF 00-19,  the Company has reclassified  these  instruments to
liabilities.

         As a result of value being  allocated  to the  warrants,  a  beneficial
conversion feature resulted on the new Series D Preferred Stock. This additional
yield to Series D Preferred Stock shareholders  amounting to $1,295 was recorded
as an increase  to  additional  paid in capital  and an increase to  accumulated
deficit.

         The  following  table shows the effect of  reclassifying  the Preferred
Stock and warrants:

(AMOUNTS IN THOUSANDS)
Series B Preferred Stock of the Company                    $     32,951
Series C Preferred Stock of the Company                          14,240
Series D Preferred Stock of the Company                          13,926

Warrants to purchase Series B Preferred Stock issued to
the holders of Series B Preferred Stock                             935
Warrants to purchase Series B Preferred Stock issued to
the holders of Series C Preferred Stock                           1,535
Warrants to purchase Series B Preferred Stock issued to
the holders of Series D Preferred Stock                           1,295
                                                           --------------

   Amount reclassified to convertible securities in the
   liabilities section of the balance sheet                $     64,882
                                                           --------------

         The rights and preferences of the new Preferred Stock are as follows:

Dividends:
----------

         The  holders  of  Series B  Preferred  Stock  have  rights  to  receive
dividends  out of funds legally  available  when and as declared by the board of
directors and are  non-cumulative.  The holders of the Series C Preferred  Stock
have the right to receive out of funds legally available cumulative dividends at
a rate of 4% of the original issue price plus any accrued but unpaid  dividends,
whether or not declared by the Board of Directors. Upon conversion of the Series
C Preferred Stock to Common Stock, each holder is entitled to receive payment of
the accrued dividends,  however, no payment may be made to holders of the Series
C Preferred Stock unless  dividends  accrued on the Series D Preferred Stock are
paid. The holders of the Series D Preferred Stock are entitled to receive out of
funds  legally  available  cumulative  dividends  at a rate  equal  to 4% of the
liquidation  preference  of  Series D  Preferred  Stock.  Dividends  on Series D
Preferred  Stock are to be  payable  out of legally  available  funds in cash or
shares  of  Common  Stock on a semi  annual  basis on June 30 and  December  31,
commencing on June 30, 2006.

         In the event that the Company  declares or pays dividends on the Common
Stock,  the Company must also declare or pay dividends on the Series B Preferred
Stock in an amount  equal to the  dividends  which would have been  declared and
paid with respect to the Common Stock  issuable upon  conversion of the Series B
Preferred  Stock  had all of the  outstanding  Series  B  Preferred  Stock  been
converted immediately prior to the record date for such dividend.

Voting:
-------

         Each class of Preferred Stock may vote on certain matters as a class as
defined in the Company's Certificate of Incorporation. The Preferred Stock votes
with the Common Stock as a class on an  as-converted  to Common Stock basis.  In
addition,  the  number of shares of our Series D  Preferred  Stock that



                                      -12-
<PAGE>

shall be entitled to such voting  rights is limited to the extent  necessary  to
ensure that, following such conversion, the number of shares of our Common Stock
then  beneficially  owned by each holder and any holder and any other persons or
entities whose beneficial ownership of common stock would be aggregated with the
holder's for purposes of the  Securities  and Exchange Act of 1934,  as amended,
does not exceed  4.99% of the total  number of shares of our  Common  Stock then
outstanding.  Consent of the holders of at least 75% of the outstanding Series D
Preferred Stock and more than 50% of the outstanding Series C Preferred Stock is
required for the Company to take certain  actions which could  adversely  affect
the rights of the holders of the Series D Preferred Stock and Series C Preferred
Stock, respectively.

Liquidation preference:
-----------------------

         In the  event of the  liquidation,  dissolution  or  winding  up of the
Company, whether voluntary or involuntary, the holders of the Series C Preferred
Stock and Series D Preferred Stock are entitled to receive amounts in preference
to the Series B Preferred Stock and Common Stock equal to $1,916.62 and $10,000,
per share, respectively,  plus any dividends accrued thereon. In addition, after
the preference  payments are made to the holders of Series C Preferred Stock and
Series D Preferred  Stock, if there are remaining  assets of the Company legally
available  for  distribution,  the holders of the Series C  Preferred  Stock and
Series D Preferred  Stock are entitled to receive a pro-rata  portion pari passu
with the Series B Preferred Stock and Common Shareholders.

Conversion:
-----------

         Upon the amendment of our Certificate of  Incorporation to increase the
number of shares of our Common Stock (the "Authorized  Shares  Increase"),  each
share of Series B Preferred  Stock will  convert  into  10,000  shares of Common
Stock, subject to adjustment for stock split and other events.

         Each share of Series C Preferred  Stock is convertible at the option of
the holder thereof,  at such time as we shall have effected the Authorized Share
Increase,  into 10,000 shares of Common Stock,  subject to adjustment  for stock
split and other events. Each share of Series D Preferred Stock is convertible at
the option of the holder  thereof,  at any time  following such time as we shall
have effected the Authorized Share Increase, into approximately 52,175 shares of
Common Stock,  subject to adjustment  for stock split and other events.  At such
time as (i) we shall have  effected  the  Authorized  Share  Increase,  (ii) the
shares of Common Stock issuable upon  conversion of the Series C Preferred Stock
are registered for resale on Form S-1 or other applicable registration statement
with the Securities and Exchange  Commission which registration  statement shall
have been  declared  effective  by the SEC or such  shares  may be sold  without
restrictions  pursuant to Rule 144(k) promulgated by the SEC, and (iii) we shall
have  closed a sale of Common  Stock by the  Company in an  underwritten  public
offering in which the  aggregate  gross  proceeds of the offering to the Company
are at least $30,000,000, each outstanding share of Series C Preferred Stock and
Series D  Preferred  Stock  shall  automatically  convert  into shares of Common
Stock.

Redemption:
-----------

         Upon a change in control of the  Company,  each  holder of the Series C
Preferred  Stock and Series D Preferred  Stock is  entitled,  at its option,  to
convert its shares into Common Stock, or receive payment equal to either 100% of
the  liquidation  preference or the fair value of the Common Stock into which it
may be converted into.

         In addition, upon the Company's refusal to convert any shares of Series
D  Preferred  Stock,  the holders of Series D  Preferred  Stock are  entitled to
redeem their shares for an amount  equal to 100% of the  liquidation  preference
plus all accrued and unpaid dividends.



                                      -13-
<PAGE>

         The warrants issued to holders of series G and H convertible  preferred
stock of KAAI (which have been  converted  into  common  stock and  subsequently
exchanged  for Series D Preferred  Stock of the  Company)  and to the holders of
Series C Preferred  Stock were valued using the Black Scholes  method.  The risk
free rates used were 3.83%,  3.99%,  and 4.36% for warrants issued to holders of
KAAI's  series G and H  preferred  stock and the  holders of Series C  Preferred
Stock of the Company, respectively. Five year terms and 30% volatility were used
for each of the warrant valuations.

3.       LOSS PER SHARE

         Pursuant  to the Share  Exchange  Agreement,  the holders of the KAAI's
series A,  series B,  series C and  series D  preferred  stock  converted  their
securities  into KAAI's  common stock and  subsequently  exchanged  their common
stock for the Company's Series B Preferred Stock. The holders of KAAI's series G
and series H preferred stock  exchanged  their stock for the Company's  Series C
Preferred  Stock.  Since  there  are  not  sufficient  shares  of  Common  Stock
authorized to allow for the  conversion of the Company's  outstanding  Preferred
Stock,  these shares have been excluded from the earnings per share calculation.
If there were  sufficient  shares of authorized  Common Stock  available for the
conversion of the Preferred Stock, each security would be evaluated to determine
if the  security  or note is  dilutive  or  anti-dilutive.  In each  case,  each
security  is  evaluated  to  determine  if the  security  or note is dilutive or
anti-dilutive.  If the  security is to be deemed  anti-dilutive,  it is excluded
from the  computation  for  diluted  loss per  common  share.  A total of 35,071
equivalent   shares   related  to   convertible   securities   were   considered
anti-dilutive,  due to the  Company  having  a net  loss  applicable  to  common
shareholders  for the three and six  months  ended  December  31,  2005 and were
therefore excluded from the loss per common share calculation. Stock options and
warrants  with  exercise  prices  greater  than the average  market value of the
Company's  Common Stock are also excluded from the  computation of dilutive loss
per common share.  The Company did not issue any options or warrants  during the
period ended December 31, 2005.

4.       LONG TERM DEBT AND LIABILITIES

         The  table  below   consists  of  the  Company's  long  term  debt  and
liabilities as of December 31, 2005 and June 30, 2005.

<TABLE>
<CAPTION>
                                                         MATURITY      INTEREST RATE %     DECEMBER 31,      JUNE 30,
(AMOUNTS IN THOUSANDS)                                     DATES                               2005            2005
--------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                 <C>          <C>             <C>
Senior debt                                              3/31/2009           12%          $       8,991   $       8,836
Senior subordinated debt, net of debt discount           11/4/2010           10%                      -          12,066
Other long term debt
     Note payable                                        7/1/2010           6%-12%                    -           5,905
     Seller notes payable                                 Varies            5%-15%                1,000           1,900
Other long term liabilities
     Long term licensing obligation                      12/1/2008            6%                  4,185           4,555
     Capital lease obligations                            Varies              6%                    199             225
Deferred liability
     Sephora                                            12/31/2010                                5,000           5,000
--------------------------------------------------------------------------------------------------------------------------
Long term debt                                                                            $      19,375   $      38,487
==========================================================================================================================
</TABLE>

         The note payable to KCO of $5,905 along with accrued  interest  thereon
of $1,598  was  converted  into  KAAI's  common  stock,  which was  subsequently
exchanged for Series B Preferred  Stock.  In addition,  the senior  subordinated
note payable to L Capital for $13,300 was converted into KAAI's common stock and
subsequently exchanged for Series B Preferred Stock. The unamortized discount on
the senior  subordinated debt in the amount of $1,234 was recognized as interest
expense  immediately



                                      -14-
<PAGE>

upon  conversion  of the debt.  The Company  repaid a seller note during the six
months ended December 31, 2005 in the amount of $900.

         As of  December  31,  2005,  the Company  was in  violation  of certain
financial  covenants  under the  senior  debt  agreement  for which the  Company
received a waiver and amendment (See Note 6).

5.       RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

         Subsequent to the issuance of the consolidated financial statements for
the quarter ended October 1, 2005, the Company has  determined  that an error in
accounting  causing an under accrual of accrued expenses  relating to management
fees and the 2005 accrued bonus.  While reviewing the Company's accruals for the
quarter ended December 31, 2005, the Company's management discovered that former
members of the Company's  accounting  staff booked  certain non payroll  related
accruals to the payroll accrual. Specifically, they incorrectly credited accrued
payroll for management fees that were payable to Kidd and Company,  LLC and FCPR
L Capital.  For the fiscal year ending June 30, 2005, the aggregate  accrual for
such  management fees was  approximately  $1.3 million.  In addition,  a certain
management bonus was correctly charged as an expense and then accrued to accrued
payroll.  While  reviewing  the  accrued  payroll  account,  members  of the new
accounting  staff who were retained by the Company,  ascertained the amount that
should be considered  accrued  payroll by calculating the amount of payroll that
was owed to  employees  from the last  pay date  through  the end of the  fiscal
period. The accountants then reversed the accrued amount for management fees and
accrued  bonuses.  The combined  errors  resulted in an  understatement  of $1.7
million  in  each  of  (a)  accrued  expenses,  accumulated  deficit  and  total
shareholders  deficit  on KAAI's  consolidated  balance  sheet at June 30,  2005
contained in the Audited 2005 Financial Statements and (b) selling,  general and
administrative  expenses,  operating loss, loss before income tax provision, net
loss and net loss  applicable  to common  shareholders  in  KAAI's  consolidated
statement  of  operations  for the year ended June 30, 2005 in the Audited  2005
Financial  Statements.  As a result, the consolidated  balance sheets as of June
30,  2005  and  October  1,  2005 and the  related  consolidated  statements  of
operations,  cash flows and  stockholders'  equity have been restated to correct
for this change.

         In addition,  the Company has included additional adjustments amounting
to $.1 million to be included in this restatement.

         The following tables summarize the effect of such restatement:

Consolidated Balance Sheet as of June 30, 2005

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                            FOR THE YEARS ENDED JUNE 30,
                                                                       2005                               2005
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                   AS REPORTED       ADJUSTMENT      (AS RESTATED)
---------------------------------------------------------------------------------------------------------------------

<S>                                                              <C>               <C>              <C>
Assets:
                Current assets:
                Cash and cash equivalents                        $           133   $            40  $          173
                Inventories                                                2,120              (143)          1,977
                                                                 ----------------------------------------------------
                     Total current assets                                  4,185              (103)          4,082

                     Total assets                                $        37,024   $          (103) $       36,921
                                                                 ====================================================



                                      -15-
<PAGE>

---------------------------------------------------------------------------------------------------------------------
                                                                            FOR THE YEARS ENDED JUNE 30,
                                                                       2005                               2005
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                   AS REPORTED       ADJUSTMENT      (AS RESTATED)
---------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Deficit:

Liabilities:
                 Current liabilities:
                 Accrued expenses and other current liabilities            8,209             1,705           9,914
                                                                 ----------------------------------------------------
                      Total current liabilities                           21,630             1,705          23,335
                                                                 ----------------------------------------------------

                      Total liabilities                                   59,373             1,705          61,078
                                                                 ----------------------------------------------------

                 Accumulated deficit                                     (37,933)           (1,808)         (39,740)
                                                                 ----------------------------------------------------
                 Total shareholders' deficit                             (22,349)           (1,808)         (24,157)
                                                                 ----------------------------------------------------
                 Total liabilities and shareholders' deficit     $        37,024   $          (103) $        36,921
                                                                 ====================================================
</TABLE>

Consolidated Statement of Operations for the year ended June 30, 2005

<TABLE>
<CAPTION>
                                                                       2005                               2005
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                  (AS REPORTED)      ADJUSTMENT      (AS RESTATED)
--------------------------------------------------------------------------------------------------------------------
Cost of Revenue:
<S>                                                                     <C>                 <C>           <C>
    Service                                                             13,572               143           13,715
TOTAL COST OF REVENUE                                                   16,458               143           16,601
--------------------------------------------------------------------------------------------------------------------

Gross margin                                                            16,475              (143)          16,332
--------------------------------------------------------------------------------------------------------------------

Selling, general and administrative expenses                            26,837             1,665           28,502

Total operating expenses                                                30,562             1,665           32,227
--------------------------------------------------------------------------------------------------------------------

Operating loss                                                         (14,087)           (1,808)         (15,895)

Loss before income tax provision                                       (18,113)           (1,808)         (19,921)

Net loss                                                               (18,113)           (1,808)         (19,921)

Net loss applicable to common shareholders                       $     (19,513)    $      (1,808)   $     (21,321)
====================================================================================================================

Basic and diluted loss per common share:                         $       (2.11)    $           -    $       (2.30)
                                                                 ====================================================
</TABLE>


                                      -16-
<PAGE>


Consolidated Statements of Cash Flows for the year June 30, 2005

<TABLE>
<CAPTION>
                                                                              FOR THE YEAR ENDED JUNE 30
                                                                       2005                               2005
IN THOUSANDS                                                      (AS REPORTED)      ADJUSTMENT      (AS RESTATED)
---------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>               <C>              <C>

Cash flows used in operating activities:
              Net loss                                           $      (18,113)   $       (1,808)  $      (19,921)
Changes in operating assets and liabilities:
              Inventories                                                  (518)              143             (375)
              Accrued expenses                                            1,845             1,705            3,550
---------------------------------------------------------------------------------------------------------------------
              Net cash used in operating activities                     (11,024)               40          (10,984)
---------------------------------------------------------------------------------------------------------------------

Increase in cash and cash equivalents                                    (6,556)               40           (6,516)

Cash and cash equivalents - end of year                          $          133    $           40   $          173
=====================================================================================================================
</TABLE>

         Additionally,  the Company has  reduced it  stockholders'  equity as of
June 30, 2005 by $1,808 million.

Subsequent  to  the  issuance  of  the  first  quarter  ended  October  1,  2005
consolidated  financial statements,  the Company has determined that an error in
accounting  caused an under accrual of accrued expenses relating to the June 30,
2005 accrued bonus that resulted in a restatement of those financial statements.
The error  resulted in an  understatement  of $1.8 million in accrued  expenses,
accumulated  deficit  and total  shareholders  deficit  on  KAAI's  consolidated
balance  sheet at October 1, 2005  contained in the Financial  Statements.  As a
result, the accompanying  consolidated balance sheets as of October 1, 2005 have
been restated to correct for this change.

The following table summarizes the effect of such restatement:

Consolidated Balance Sheet as of October 1, 2005

<TABLE>
<CAPTION>
                                                                          FOR THE QUARTER ENDED OCTOBER 1,
                                                                       2005                               2005
IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS                  (AS REPORTED)      ADJUSTMENT      (AS RESTATED)
---------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>              <C>               <C>
Liabilities:
---------------------------------------------------------------------------------------------------------------------
                 Accrued expenses and other current liabilities            7,860            (1,809)           9,669
                                                                 ----------------------------------------------------
                    Total current liabilities                             23,275            (1,809)          25,084
                                                                 ----------------------------------------------------
                 Total liabilities                                        59,656            (1,809)          61,465
                                                                 ----------------------------------------------------

                 Accumulated deficit                                     (45,200)           (1,809)         (46,639)

                 Total shareholders' deficit                             (13,372)           (1,809)         (15,541)
                                                                 ====================================================
</TABLE>

Additionally,  the Company  increased it stockholders'  deficit as of October 1,
2005 by $1.8 million due to the prior effect of the June 30, 2005 restatements.




                                      -17-
<PAGE>

6.       SUBSEQUENT EVENTS

         On January 9,  2006,  Advanced  Aesthetics,  Inc.  changed  its name to
Klinger Advanced Aesthetics, Inc.

         In December 2004 KAAI entered into a Services and  Licensing  Agreement
with Johns Hopkins  Medicine  ("Johns  Hopkins"),  acting  through Johns Hopkins
Health System Corporation,  and the Johns Hopkins University. This agreement was
subject to the  satisfaction of certain  conditions  precedent,  which we had to
satisfy by October 31, 2005.  On November  10, 2005,  the period by which we are
required to satisfy the conditions  precedent was extended to December 31, 2005.
On January 3, 2006, the parties extended such period until March 31, 2006. Under
the Agreement, Johns Hopkins agreed to provide the following services to us: (i)
investigate  current  methods  for skin care  parameter  testing at the point of
sale; (ii) develop acceptable methods to measure the condition of clients' skin,
(iii) create a new testing  methodology to validate skin care product  efficacy,
(iv) oversee the ongoing  testing of skin care products  using the Johns Hopkins
testing  standards  and (v) oversee the testing of 15 of our skin care  products
using the agreed upon testing  standards.  The term of the  agreement is 5 years
after the satisfaction of the conditions precedent.

         Subsequent to the quarter  ended  December 31, 2005, we entered into an
Amendment and Consent dated February 21, 2005 (the "Amendment and Consent") with
Technology  Investment Capital Corp. ("TICC" ), which provided for amendments to
the  following  financial  covenants to which we are subject  through the end of
fiscal  year  2007:  Minimum  Consolidated  EBITDA,  Consolidated  Total Debt to
Consolidated  EBITDA,  Consolidated  Senior Debt Ratio,  Minimum  Unit  EBITDAR,
Minimum Unit Fixed Charge Ratio, and Minimum  Unrestricted Cash Balance. The new
covenants  are  substantially  lower than the  covenants  set forth in our prior
agreement with TICC and as such we believe they are achievable. In consideration
for the Amendment and Consent,  we were required to increase our escrow  account
for TICC interest payment by $1.0 million to cover interest payments through the
end of fiscal year 2007.

         We have  developed  a skin care line of  products  called  Cosmedicine,
which has been tested for safety and efficacy by Johns Hopkins.  We launched the
products  in February  2006 for  exclusive  distribution  in Sephora  USA,  Inc.
("Sephora") stores and the Company's own facilities.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

         You  should  read the  following  discussion  in  conjunction  with the
attached unaudited  consolidated financial statements and notes thereto and with
the Klinger Advanced Aesthetics,  Inc. ("KAAI") audited financial statements and
notes  thereto for the fiscal year ended June 30, 2005 included in the Company's
Current Report on Form 8-K/A filed with the Commission on February 21, 2006.

         Unless   otherwise   indicated:   references  to  "TrueYou"   refer  to
TrueYou.Com,  Inc.;  references to "KAAI" refer to Klinger Advanced  Aesthetics,
Inc. and its  consolidated  subsidiaries;  references  to the  "Company",  "we,"
"our," and "us" refer to  TrueYou.Com,  Inc. and its  consolidated  subsidiaries
(including  KAAI);  and the terms  "fiscal  quarter" and "three  months" in this
Quarterly  Report on Form 10-Q refer to the  quarter  ended  December  31,  2005
referenced.

FORWARD-LOOKING STATEMENTS

         Certain  of the  statements  set  forth in this  Form  10-Q  constitute
"Forward  Looking  Statements."   Forward-looking  statements  include,  without
limitation, any statement that may predict, forecast,  indicate,



                                      -18-
<PAGE>

or imply future results, performance or achievements,  and may contain the words
"estimate,"  "project," "intend," "forecast,"  "anticipate," "plan," "planning,"
"expect," "believe," "will," "will likely," "should," "could," "would," "may" or
words or expressions of similar meaning.  Therefore,  readers are cautioned that
there also can be no assurance that the  forward-looking  statements included in
this Form 10-Q will prove to be accurate and results may differ  materially.  In
light  of  the  significant   uncertainties   inherent  to  the  forward-looking
statements  included  herein,  the inclusion of such  information  should not be
regarded as a  representation  or  warranty  by us or any other  person that our
objectives  and plans will be achieved in any specified  time frame,  if at all.
Thus, we cannot  guarantee  future results,  levels of activity,  performance or
achievements.  Moreover,  except to the extent  required by  applicable  laws or
rules,  we do  not  undertake  any  obligation  to  update  any  forward-looking
statements  or to announce  revisions to any of the  forward-looking  statements
after the date of this Form 10-Q.

OVERVIEW

         On December 20, 2005,  TrueYou entered into a Share Exchange  Agreement
(the "Share  Exchange  Agreement")  with KAAI and  securityholders  of KAAI (the
"KAAI  Securityholders")  pursuant  to which the KAAI  Securityholders  received
newly issued  securities  of TrueYou in exchange for their  securities  of KAAI.
Under the Share Exchange Agreement,  TrueYou issued to the KAAI Securityholders:
(i) 27,926.4689 newly issued shares of its Series B Convertible Preferred Stock,
par value  $0.001 per share (the "Series B Preferred  Stock"),  each of which is
convertible  into 10,000 shares of Common Stock,  (ii)  8,452.0222  newly issued
shares of its Series C Convertible  Preferred  Stock, par value $0.001 per share
(the  "Series C  Preferred  Stock"),  each of which is  convertible  into 10,000
shares of Common Stock,  and (iii) newly issued warrants to purchase  3,969.0363
shares  of its  Series  B  Preferred  Stock.  As a  result  of the  transactions
contemplated  by the Share  Exchange  Agreement,  KAAI  became a  subsidiary  of
TrueYou.

         On December 22, 2005, affiliates of North Sound Capital LLC and Valesco
Capital  Management LP invested $15.3 million in exchange for 1,530 newly issued
shares of our Series D Convertible  Preferred  Stock, par value $0.001 per share
(the "Series D Preferred  Sock" and,  together with the Series B Preferred Stock
and the Series C  Preferred  Stock,  the  "Preferred  Stock"),  each of which is
convertible  into  approximately  52,175  shares of Common Stock and warrants to
purchase  2,394.8407 shares of Series B Preferred Stock (the "Series D Preferred
Financing").

         The  Preferred  Stock  and  warrants  issued  in  connection  with  the
consummation  of the  Share  Exchange  Agreement  and  the  Series  D  Preferred
Financing are convertible and exercisable,  as applicable,  into an aggregate of
506,576,693 shares of Common Stock,  representing in the aggregate approximately
97.2% of the equity interest and voting rights of the Company on an as-converted
basis.  The shares of Series B Preferred Stock will  automatically  convert into
Common Stock after the Company amends its Certificate of  Incorporation in order
to increase the number of shares of Common Stock it is authorized to issue.  The
Company is obligated under the Share Exchange Agreement to amend its Certificate
of  Incorporation  as soon as  practicable  following  the  closing of the Share
Exchange  Agreement.  Subject  to certain  restrictions,  the shares of Series C
Preferred  Stock and Series D Preferred  Stock will  automatically  convert into
Common Stock upon the consummation of an underwritten public offering with gross
proceeds  to us of not less  than $30  million;  provided,  that at such  time a
registration  statement  covering the resale of such shares is effective or such
shares can be sold under Rule 144.

         KAAI is the operating subsidiary of TrueYou and as such, the results of
operations presented herein pertain to KAAI.



                                      -19-
<PAGE>

GENERAL

         We offer both  cosmetic  services and medical  procedures  to customers
under one  delivery  system  and are  bringing  cosmetic  dermatology,  cosmetic
dentistry,  and salon and spa services  together  under a single  brand,  giving
clients  access to top service  providers,  unique  treatments  and  predictable
results in a state of the art  environment.  We co-brand our trade name with the
trade names of the salons and spas that we  acquired.  Our salons and spas share
certain  corporate  resources  such  as  senior  management  and  administrative
services. We had 576 employees on December 31, 2005.

         KAAI,  commenced business  operations on June 29, 2003 when it acquired
Dischino Corporation.  Dischino Corporation operated an established beauty salon
and spa in West Palm Beach, Florida. In early December 2003, KAAI acquired three
additional  facilities  in the  State of  Florida.  The first  facility  was the
acquisition  of a spa located in Palm Beach Gardens,  the second  facility was a
spa located in Boca Raton, and a third facility located in Boca Pointe. In April
2004, KAAI expanded  operations by acquiring the Georgette  Klinger  Corporation
which owned and operated nine salons throughout the United States that offer spa
and salon services.

         Our  facilities  are located  across the country with  locations in key
markets such as New York, (NY),  Beverly Hills (CA), Boca Raton (FL), Palm Beach
Gardens (FL), West Palm Beach (FL),  Dallas (TX),  Chicago (IL), and Short Hills
(NJ).

         Of our twelve locations, two are fully integrated properties, eight are
in the planning stages for conversion into fully integrated properties,  or what
we call the "KAAI Model" and two are being  converted to a new format which will
offer cosmetic  dermatology,  spa and salon  services,  and retail products in a
luxurious  upscale  setting.  These two facilities  will occupy a smaller square
footage than many of our other facilities.

         We consider West Palm Beach and Palm Beach Gardens Florida locations to
be our flagship facilities.  These facilities feature cosmetic dermatology,  spa
and salon  services,  and retail  products  on site,  and  cosmetic  surgery and
dentistry via off-site affiliated  providers.  All of our medical treatments and
providers,  (both on and  off-site)  are  reviewed  and  approved by our Medical
Advisory Board. Our Medical Advisory Board is overseen by Johns Hopkins Medicine
("Johns Hopkins"), acting through The John Hopkins Health System Corporation and
The Johns Hopkins University.  Our clients are able to obtain measurable results
from  procedures  and products via the use of proprietary  SkinState  diagnostic
tools which  objectively  record  facial  aesthetic  metrics  such as  hydration
(moisture)  level,  sebum (oil) level,  pore size,  UV damage,  and other facial
aesthetic metrics.

         In  addition,  we help  clients  navigate  through  an array of  beauty
enhancement options through our Aesthetics  Concierge program which is currently
available in our flagship locations.  The Aesthetics Concierge guides interested
clients  through a  comprehensive  analysis of the  client's  current  aesthetic
characteristics  and goals. The Aesthetics  Concierge also provides  information
and decision support on all of our treatments, services and products. We believe
the  Aesthetics  Concierge  function  to be an  integral  component  of consumer
education  about  aesthetic  services and products and that it  translates  into
client interest in additional products and services that we offer.

         We have  developed  a skin care line of  products  called  Cosmedicine,
which has been tested for safety and efficacy by Johns Hopkins.  We launched the
products  in February  2006 for  exclusive  distribution  in Sephora  USA,  Inc.
("Sephora")  stores and the Company's own facilities.  All Cosmedicine  products
are being  developed and  formulated for us by Atlantis  Laboratories.  Atlantis
Laboratories  is an  independent  developer and  manufacturer  of bulk skin care
products.



                                      -20-
<PAGE>

         We are also  developing a diagnostic tool which will be used in each of
our facilities as the  facilities are being  converted to the KAAI Model. A more
limited  version  of this  diagnostic  tool is  expected  to be used in  several
Sephora stores.

         Our financial statements have been prepared on the going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.  Since KAAI's  inception,  it has  experienced
large operating  losses and negative cash flow from  operations.  As of June 30,
2005, we had an accumulated  net deficit of $39.7 million and a working  capital
deficit of $19.3  million.  As of December 31, 2005, we had an  accumulated  net
deficit of $57.5  million and a working  capital  deficit  $2.1  million.  These
factors  raise  substantial  doubt  about our  ability  to  continue  as a going
concern.  Our ability to continue as a growing concern ultimately depends on our
ability to increase  sales and reduce  expenses to a level that will allow us to
operate profitably and sustain positive operating cash flows.

CURRENT TRENDS AND OUTLOOK

         Subsequent  to the quarter  ended  December 31, 2005 we entered into an
Amendment and Consent dated February 21, 2005 (the "Amendment and Consent") with
Technology  Investment Capital Corp. ("TICC"),  which provided for amendments to
the  following  financial  covenants to which we are subject  through the end of
fiscal  year  2007:  Minimum  Consolidated  EBITDA,  Consolidated  Total Debt to
Consolidated  EBITDA,  Consolidated  Senior Debt Ratio,  Minimum  Unit  EBITDAR,
Minimum Unit Fixed Charge Ratio, and Minimum  Unrestricted Cash Balance. The new
covenants  are  substantially  lower than the  covenants  set forth in our prior
agreement with TICC and as such we believe they are achievable. In consideration
for the Amendment and Consent,  we were required to increase our escrow  account
for TICC interest payment by $1.0 million to cover interest payments through the
end of fiscal year 2007.

         We have  identified a trend of decline in our revenues for each quarter
of fiscal year 2006 compared to the same periods of fiscal year 2005. We believe
the reasons  behind this trend  include our  facility in Boca Raton that has not
fully recovered from hurricane  damage that was sustained in October and our New
York facility that has not recovered from the loss of two high revenue producing
stylists.  We have also closed our Beverly Hills  facility for  renovations  and
expect to reopen it in April 2006.

         In light of the recent  trends in our business and the need to fund the
TICC escrow  account (as  mentioned  above),  we will need to obtain  additional
financing in order to execute our business  plan for fiscal 2006.  If we are not
able to obtain  such  financing  we will  need to  curtail  some of the  capital
spending  and reduce  expenses  that we have  planned  for fiscal  year 2006 and
beyond.

REVENUE SOURCES

         We currently derive revenue from the following sources:

         Spa and Salon Services.  Our salon offerings  include  services such as
hair styling, coloring,  texturizing,  treatments,  extensions, make-up artistry
and  manicure/pedicures.  Our spa services  include  treatments such as facials,
body treatments (exfoliation,  wraps, cellulite treatments),  waxing and massage
therapy.

         Medical Services.  Our medical services are grouped into the following
         categories:



                                      -21-
<PAGE>

         Dermatology  Services - Our  dermatology  offerings  include  injection
         services   (Botox  and   Restylane),   facials,   sclerotherapy   (vein
         treatments),   peels,   microdermabrasion,   permanent  make-up,  laser
         resurfacing and laser hair removal.

         Cosmetic  Dentistry  Services - Our two integrated  flagship  locations
         offer consumers access to cosmetic dentistry services,  including tooth
         whitening and veneers.

         Cosmetic  Surgery  Services - Our integrated  flagship  locations offer
         consumers access to cosmetic surgery services,  including  liposuction,
         breast enhancement,  breast reduction, eye, brow, breast, body and face
         lifts,  nose  contouring,  tummy tucks and  cheek/chin  implants.  Such
         services are performed in an off site medical facility.

         Retail  Products.  Our  locations  offer a variety  of retail  products
including  products for hair care,  skin care,  and  make-up.  Hair care product
offerings include such brands as Goldwell,  Wella, Primary Scent, Kerastase, and
Bumble & Bumble.  Skin care product offerings include such brands as DDF, Obagi,
IS Clinical, Neova, MD Skincare,  Skinceuticals, and Strivectin. Make-up product
offerings  include such brands as pauls Dorf,  Glominerals,  Vincent Longo,  and
Darphin.  Additionally  many of our  locations  offer  private  label  skin care
brands, Georgette Klinger and Anushka.

         Other.  We derive  e-commerce  revenue  primarily  through  the sale of
private label skin care products via the internet.

         We manage our business by evaluating  net revenue,  gross  margin,  and
liquidity.  We encounter a variety of  challenges  that may affect our business.
These  factors  include  weather,  including  hurricanes  which  have  adversely
impacted our facilities in Florida, and our dependence on individuals to provide
services  to our  clients  who leave the  Company  and take  clients  with them.
Further,  we are  dependent on a third  party,  Atlantis  Laboratories,  for the
development and supply of bulk product for our Cosmedicine product line which is
expected to be launched in February 2006.

         Beginning in fiscal year 2006 (which  started on July 1, 2005),  we are
following the standard fiscal year of the retail  industry,  which is a 52 or 53
week period on the Saturday closest to June 30 of the following year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Accounting  estimates  and  assumptions  discussed  in this section are
those  that we  consider  to be the most  critical  to an  understanding  of our
financial  statements because they inherently involve significant  judgments and
uncertainties.  For all of these estimates, we caution that future events rarely
develop  exactly  as  forecast,   and  the  best  estimates   routinely  require
adjustment.

         Revenue  Recognition:  Revenue is recognized  for services  rendered or
product sold at the time when the service is performed or the item sold.  When a
gift card is purchased for a future service or product, the value of the card is
recorded as a liability and recorded as revenue when the card is redeemed.

         Accounting for  Acquisitions and Intangible  Assets:  We have accounted
for our  acquisitions  under the  purchase  method of  accounting  for  business
combinations.  Under the  purchase  method of  accounting,  the cost,  including
transaction  costs,  are allocated to the underlying net assets,  based on their
respective  estimated  fair values.  The excess of the  purchase  price over the
estimated fair values of the net assets acquired is recorded as goodwill.



                                      -22-
<PAGE>

         The judgments made in determining the estimated fair value and expected
useful  lives  assigned  to each class of assets and  liabilities  acquired  can
significantly  affect net income. To the extent a longer-lived asset is ascribed
greater value under the purchase method than a shorter-lived  asset,  net income
in a given period may be higher.

         Impairment of Long-Lived Assets: We review long-lived assets to be held
and used whenever events or changes in circumstances  indicate that the carrying
amount of such  assets  may not be fully  recoverable.  In  addition,  we review
goodwill  for  impairment  at  least  on  an  annual  basis.  Measurement  of an
impairment loss is based on the fair value of the asset compared to its carrying
value.

         Inventories: Inventories consist principally of hair care and skin care
products  held  either  for  retail  sale or for use in salon,  spa and  medical
services.  Inventories  are stated at the lower of cost or market on a first-in,
first-out  basis.  Further,  on a  quarterly  basis,  we  estimate  losses  from
shrinkage due to lost or stolen  inventory  based on historical  experience  and
reduce the inventory value by that estimate.

         Gift Cards: We review the aging of our gift card liability quarterly in
relation to our historical redemption rates. We recognize other income for those
cards we determine  will not be redeemed to the extent that they are not subject
to escheatment laws.

         Stock  Based  Compensation:   We  estimate  the  cost  of  stock  based
compensation  using the  Black-Scholes  Option Pricing  Model.  Inherent in that
model are  assumptions  including the  volatility of our stock and the length of
time which we expect an option to remain outstanding.

         Deferred  Income  Taxes:  We review our  provision  for income taxes at
least quarterly and make a determination  as to the likelihood of our ability to
use  the  income  tax  benefit  of our net  operating  losses.  We  then  make a
determination as to an appropriate reserve to reduce the value of this asset.

RESULTS OF OPERATIONS

         The  following  table  sets  forth  our  income  statement  data  as  a
percentage of net sales for the periods indicated below.


                                      -23-
<PAGE>
<TABLE>
<CAPTION>
                                             Quarter ended                                        Six Months ended
                                -----------------------------------------           ----------------------------------------------
In thousands, except share      December 31,                December                December 31,                  December
and per share amounts                                         31,                                                    31,
                                    2005                      2004                      2005                   2004
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>               <C>   <C>                   <C>   <C>                <C>  <C>              <C>
Revenues
   Service                      $     6,091       81%   $      6,557          79%   $  11,954          78%  $  12,190        76%
   Retail                             1,462       19%          1,773          21%       3,364          22%      3,847        24%
----------------------------------------------------------------------------------------------------------------------------------
   Total Revenue                      7,553      100%          8,330         100%      15,318         100%     16,037       100%

Total Cost of Revenue:                4,044       54%          4,200          50%       8,220          54%      8,366        52%
----------------------------------------------------------------------------------------------------------------------------------
Gross margin                          3,509       46%          4,130          50%       7,098          46%      7,671        48%

Selling, general and
administrative expenses               9,693      128%          7,755          93%      16,798         110%     14,176        88%

Depreciation and amortization         1,159       15%            947          11%       2,268          15%      1,818        11%
----------------------------------------------------------------------------------------------------------------------------------
   Total operating                   10,852      144%          8,702         104%      19,066         125%     15,994       100%
    expenses
----------------------------------------------------------------------------------------------------------------------------------
Operating loss                       (7,343)     -97%         (4,572)        -57%     (11,968)        -78%     (8,323)      -52%

Interest expense, net                 1,995       26%            983          12%       2,999          20%      1,910        12%
Net loss                             (9,338)    -124%         (5,555)        -67%     (14,967)        -98%    (10,233)      -64%
Dividends on preferred stock            101        1%           (376)         -5%        (362)         -2%       (647)       -4%
----------------------------------------------------------------------------------------------------------------------------------
Net loss applicable to common   $    (9,237)    -122%   $     (5,931)        -71%   $ (15,329)       -101%   $(10,880)       68%
shareholders
</TABLE>


THREE MONTHS ENDED DECEMBER 31, 2005 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2004

REVENUE

         Total revenue for the quarter ended  December 31, 2005 was $7.6 million
compared to $8.3 million for the quarter ended  December 31, 2004.  Both service
revenue and retail  revenue  were down for the quarter  compared to last year in
all but two of our  facilities  with the decreases  being greater in our Florida
and New York City  facilities.  We attribute the decreases in revenue in Florida
to the  impact  of a major  hurricane  which  hit the area in  October  2005 and
impacted  business in each of our four southern Florida  facilities.  We believe
that the decrease in revenue in our New York facility was due in part to a three
day  transit  strike  which  impacted  the  facility  immediately  prior  to the
Christmas holiday and in part due to the loss of two high revenue producing hair
stylists. Retail revenue declined as a percentage of total revenue due to out of
stock  positions  in certain key line items  prior to the holiday  season and in
part due to declines in service revenue since retail products are generally sold
upon the completion of a service.

COST OF REVENUE

         Cost of  revenue  for the  quarter  ended  December  31,  2005 was $4.0
million  compared to $4.2 million for the quarter ended  December 31, 2004.  The
cost of providing  services  increased as a result of changes in our  commission
structures  which  provide  minimum fixed wages.  This was  partially  offset by
moderately lower costs on retail product which resulted  primarily from a higher
mix of private label sales.



                                      -24-
<PAGE>

GROSS MARGIN

         Gross margin was 46% for the quarter  ended  December 31, 2005 compared
to 50% for the quarter ended  December 31, 2004. The decline in gross margin was
due to higher  commission  structures  which  were not  offset by  increases  in
volume. This decline in the service margin was partially offset by higher retail
margin due to the mix of sales to higher margin products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         For  the  quarter  ended  December  31,  2005,  selling,   general  and
administrative expenses ("SG&A") increased to $9.7 million from $7.8 million for
the quarter  ended  December 31,  2004.  This  increase is due  primarily to the
addition of several  senior  management  level  officers and expenses  that were
incurred  in  connection  with the  development  of a new  product  line  called
Cosmedicine  which  was  launched  in  February  2006.   Further,   we  incurred
significantly  higher  professional  expenses for accounting and legal work, and
for creative work associated with a potential name change of our boutiques.

         SG&A expenses  represented  128% of total revenue for the quarter ended
December 31, 2005 compared to 93% for the quarter ended December 31, 2004. While
this  expense is very high as a  percentage  of sales,  we believe this level of
spending is necessary to develop and implement our business plan.

         For the quarters  ended  December 31, 2005 and December 31, 2004,  SG&A
expenses were comprised of the following:

                                                 2005         2004
                                                 ----         ----

         (AMOUNTS IN MILLIONS)

         Payroll                                 $3.9        $2.6
         Occupancy                                1.3         1.3
         Professional Fees                        1.9         0.9
         Advertising and Marketing                0.6         0.5
         All Other                                2.0         2.5
                                                  ---         ---
                                                 $9.7        $7.8


DEPRECIATION AND AMORTIZATION EXPENSE

         For the  quarters  ended  December  31,  2005  and  December  31,  2004
depreciation  and  amortization  expense  was $1.2  million  and  $0.9  million,
respectively.  This increase is due primarily to increased  amortization expense
in fiscal 2005, which is associated with the Johns Hopkins trademark agreement.

OPERATING LOSS

         Our  operating  loss was $7.3 million and $4.6 million for the quarters
ended December 31, 2005 and December 31, 2004, respectively.  The operating loss
increased primarily due to significantly higher SG&A expenses and decline in our
revenue.



                                      -25-
<PAGE>

INTEREST EXPENSE, NET

         Interest  expense was $2.0  million and $1.0  million for the  quarters
ended  December 31, 2005 and December  31,  2004,  respectively,  an increase of
100%.  The increase was  primarily  due to the write off of the debt discount on
the senior  subordinated  note, which was converted into KAAI's common stock and
subsequently  exchanged for the Company's  Series B Preferred  Stock and imputed
interest expense on the Johns Hopkins agreement.

DIVIDENDS ON PREFERRED STOCK

         Dividends on Preferred  Stock were ($0.1) million for the quarter ended
December 31, 2005  compared to $0.4 million for the quarter  ended  December 31,
2004.  Dividends  on  Preferred  Stock for the quarter  ended  December 31, 2005
represent  preferred dividends of $0.6 million for the quarter which were offset
by dividend  forfeitures in connection  with the conversion of KAAI's  preferred
stock into KAAI's common stock (which were subsequently exchanged for securities
of the Company) of $0.7 million.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

         Our net  loss  applicable  to  common  stockholders  increased  to $9.2
million for the quarter ended December 31, 2005 compared to $5.9 million for the
quarter ended  December 31, 2004, due primarily to the increase in SG&A expenses
and decline in our revenue and the write off of the debt  discount on the senior
subordinated  debt which was converted into KAAI's common stock and subsequently
exchanged for Series B Preferred Stock.

SIX MONTHS ENDED DECEMBER 31, 2005 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
2004

REVENUE

         Revenue for the six months ended  December  31, 2005 was $15.3  million
compared to $16.0  million  for the six months  ended  December  31,  2004.  The
decrease  was  primarily  due to  decreases  in revenue  in the  second  quarter
resulting from the impact of a severe  hurricane  which hit southern  Florida in
October, 2005 and impacted our four facilities in that region.  Further revenues
were  depressed  in our New York City  location in part due to a transit  strike
immediately  preceding  Christmas  and  due to the  loss  of  two  high  revenue
stylists.  Revenue from the sale of retail  product  declined from 24% to 22% of
total  revenue due  primarily  to out of stock  positions on several key product
lines prior to the holiday season.

COST OF REVENUE

         Cost of revenue  declined  to $8.2  million  for the six  months  ended
December 31, 2005 from $8.4 million for the six months ended  December 31, 2004.
The  decrease was  primarily  due lower  variable  costs  associated  with lower
revenues  which  was  partially  offset by higher  commission  structures  which
provide for minimum  earnings.  Our overall cost of revenue as a  percentage  of
revenue  increased  due to the mix impact of lower  retail sales at a lower cost
and higher commission structures.

GROSS MARGIN

         Gross  margin  was 46%  for the six  months  ended  December  31,  2005
compared to 48% for the six months ended  December 31, 2004. The decline was due
to the mix  impact of lower  retail  revenues  which have a higher  margin  than
service revenues and higher commission structures.



                                      -26-
<PAGE>

SELLING GENERAL AND ADMINISTRATIVE EXPENSES

         SG&A expenses was $16.8  million for the six months ended  December 31,
2005 compared to $14.2 million for the six months ended  December 31, 2004.  The
increase was primarily due to the addition of several  senior  management  level
officers and expenses that were incurred in connection with the development of a
new  product  line called  Cosmedicine  which was  launched  in  February  2006.
Further, we incurred higher professional expenses for accounting and legal work,
and for creative work associated with a potential name change of our boutiques.

         SG&A  expenses  represented  110% of total  revenue  for the six months
ended  December 31, 2005  compared to 88% for the six months ended  December 31,
2004.  While this expense is very high as a percentage of sales, we believe this
level of spending is necessary to develop and implement our business plan.

         For the six months ended December 31, 2005 SG&A expenses were comprised
of the following:

                                              2005           2004
                                              ----           ----

         (AMOUNTS IN MILLIONS)

         Payroll                              $5.9           $5.1
         Occupancy                             2.5            2.6
         Professional Fees                     3.3            1.3
         Advertising and Marketing             1.1            0.9
         All Other                             4.0            4.3
                                               ---            ---
                                             $16.8          $14.2

DEPRECIATION AND AMORTIZATION

         Depreciation and amortization was $2.3 million for the six months ended
December 31, 2005 compared to $1.8 million for the six months ended December 31,
2004. This increase is due primarily to increased amortization expense in fiscal
2005 associated with the Johns Hopkins trademark agreement.

OPERATING LOSS

         Our operating  loss was $12.0 million for the six months ended December
31, 2005  compared to $8.3 million for the six months  ended  December 31, 2004.
The  increase in the  operating  loss is  primarily  due to the increase in SG&A
expense in 2005 compared to 2004.

INTEREST EXPENSE

         Interest expense was $3.0 million for the six months ended December 31,
2005  compared to $1.9 million for the six months ended  December 31, 2004.  The
increase  was  primarily  due to the write down of the debt  discount  on senior
subordinated debt, which was converted into KAAI's common stock and subsequently
exchanged  for Series B Preferred  Stock,  of $1.0 million  coupled with imputed
interest expense on the Johns Hopkins agreement.



                                      -27-
<PAGE>

NET LOSS

         Our net loss  increased to $15.0 million from $10.2 million for the six
month periods ended December 31, 2005 and 2004,  respectively,  primarily due to
the increase in SG&A expenses and decline in our revenue.

DIVIDENDS ON PREFERRED STOCK

         Dividends on preferred stock were $0.4 million for the six months ended
December 31, 2005 versus $0.6 million for the six month periods  ended  December
31, 2004. The decrease was due to the forfeiture of dividends on preferred stock
which was converted into KAAI's common stock and subsequently  exchanged for the
Company's Series B Preferred Stock.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

         Our net loss  applicable  to  common  stockholders  increased  to $15.3
million for the six months ended December 31, 2005 compared to $10.9 million for
the three months ended  December 31, 2004, due primarily to the increase in SG&A
expenses  coupled  with  the  write  down of the  debt  discount  on the  senior
subordinated note, which was converted into KAAI's common stock and subsequently
exchanged for Series B Preferred Stock.

SEASONALITY

         Our operations have  historically  been seasonal,  with higher revenues
generally generated in the first half of our fiscal year (July through December)
as a result of increased demand for our services and products during the holiday
season from the end of November  through the end of  December.  Furthermore,  we
have historically  discounted our products during the month of August, which has
further skewed revenues into the first half of the fiscal year.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         Net cash  used for  operating  activities  was $11.8  million  and $5.1
million  for  the  six  month  periods   ended   December  31,  2005  and  2004,
respectively.  This  deterioration  of cash  flows  resulted  primarily  from an
increase in our net loss of $4.7 million for the six months  ended  December 31,
2005  compared to the six months ended  December  31,  2004.  For the six months
ended  December  31, 2004,  we were able to partially  mitigate the cash used in
operating activities by paying vendors on longer terms. Vendors are now on terms
that cannot be further extended.

         Net cash used in investing activities was $2.9 million and $0.9 million
for the six months ended December 31, 2005 and December 31, 2004,  respectively.
The increase is primarily  due to capital  spending  for our  diagnostic  device
development,  information  technology  to upgrade our  facility  and  accounting
systems and for facility refurbishment.

         Cash flows provided by financing activities were $28.1 million and $1.1
million for the six month periods ended December 31, 2005 and December 31, 2004,
respectively.  For the six  months  ended  December  31,  2005,  cash flows from
investing  activities  were primarily the result of the issuance of our Series D
Preferred Stock in the amount of $15.3 million gross.

         We  obtained  compliance  waivers  from  TICC  for all  covenant  tests
required for the year ended June 30, 2005, the quarter ended October 1, 2005 and
the quarter ended December 31, 2005.  Current trends in our business put us in a
position where covenants that were agreed to in November 2005 were



                                      -28-
<PAGE>

not likely to be achieved in the proceeding  quarters.  As such, on February 21,
2006 we agreed  with TICC to new  covenants  which we believe  to be  achievable
through the end of fiscal  year 2007 if we either  raise  additional  capital to
execute our plan or reduce capital spending and SG&A expenses.  In consideration
for the new  covenants,  we are required to increase our escrow account for TICC
interest  payments by $1.0 million to cover  interest  through the end of fiscal
year 2007.

FUTURE LIQUIDITY AND CAPITAL NEEDS.

         Our  principal  future  uses of  funds  are for debt  service,  working
capital  requirements,  and  capital  spending to execute  our  strategy.  It is
expected  that our net losses will  continue at least  through the end of fiscal
year 2006. In addition,  we expect to spend  approximately $9 million for fiscal
year 2006 on  capital  spending  as we  refurbish  our  facilities,  develop  an
information technology  infrastructure,  and develop our proprietary diagnostics
products.

         There is no assurance  that the recent  financing will be sufficient to
fund operations until sales and  profitability  improve to the point that we are
to operate from internally generated cash flows. The financial statements do not
include  any   adjustments  to  reflect  the  possible  future  effects  on  the
recoverability and classification of assets or the amounts and classification of
liabilities  that may result from our possible  inability to continue as a going
concern.

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

         None.

ITEM 4.       CONTROLS AND PROCEDURES

         The  Company's  management,  with the  participation  of the  Company's
principal executive officer and principal  financial officer,  has evaluated the
effectiveness of the Company's  disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
l934, as amended (the  "Exchange  Act")) as of the end of the period  covered by
this report. Based on such evaluation, the Company's Chief Executive Officer and
Chief  Financial  Officer,  have  concluded  that the  disclosure  controls  and
procedures are not effective for the reasons specified below.


Restatement of Financial Statements


         On February  13,  2006,  the  Company's  Board of  Directors,  upon the
recommendation  of  the  Company's  management,  concluded  that  the  financial
statements of Klinger  Advanced  Aesthetics,  Inc.  ("KAAI") for the fiscal year
ended  June 30,  2005  (the  "2005  Audited  Financial  Statements")  that  were
previously  filed with the Company's  Current Report on Form 8-K, filed with the
Commission   on  December  23,  2005  (the  "8-K   Report")  and  the  Company's
Registration  Statement on Form S-1 filed on January 24, 2006 (the "Registration
Statement"), should no longer be relied upon and should be restated. The Board's
conclusion  was based on a finding by the  Company's  management  of an error in
accounting  causing an under accrual of accrued expenses  relating to management
fees and to accrued bonuses payable.


         In addition,  as a result of the errors that led to the conclusion that
the  Company's  2005  Audited  Financial   Statements  cannot  be  relied  upon,
management  concluded that the Company's unaudited financial  statements for the
quarter ended October 1, 2005 (the "Subsequent Quarter Financial Statements" and
together   with  the  2005  Audited   Financial   Statements,   the   "Financial
Statements"),  that were previously filed in the 8-K Report and the Registration
Statement,  should no longer be relied upon



                                      -29-
<PAGE>

and should be restated.  On February 20, 2006, the Company's  Board of Directors
met and discussed the foregoing with  management  and the Company's  independent
registered public accounting firm, Amper,  Politziner & Mattia, P.C. ("Amper") .
The Board of Directors concurred with the recommendation of management.

Description of the Errors that Led to the Restatement of the Financial
Statements

         While  reviewing the Company's  accruals for the quarter ended December
31,  2005,  the  Company's  management  discovered  that  former  members of the
Company's  accounting  staff booked certain non payroll related  accruals to the
payroll accrual.  Specifically,  they  incorrectly  credited accrued payroll for
management  fees that were payable to Kidd and Company,  LLC and FCPR L Capital.
For the fiscal  year  ending  June 30,  2005,  the  aggregate  accrual  for such
management  fees  was  approximately  $1.4  million.  In  addition,   a  certain
management bonus was correctly charged as an expense and then accrued to accrued
payroll.  While  reviewing  the  accrued  payroll  account,  members  of the new
accounting  staff who were retained by the Company,  ascertained the amount that
should be considered  accrued  payroll by calculating the amount of payroll that
was owed to  employees  from the last  pay date  through  the end of the  fiscal
period. The accountants then reversed the accrued amount for management fees and
accrued  bonuses.  The combined  errors  resulted in an  understatement  of $1.7
million  in  each  of  (a)  accrued  expenses,  accumulated  deficit  and  total
shareholders  deficit  on KAAI's  consolidated  balance  sheet at June 30,  2005
contained in the Audited 2005 Financial Statements and (b) selling,  general and
administrative  expenses,  operating loss, loss before income tax provision, net
loss and net loss  applicable  to common  shareholders  in  KAAI's  consolidated
statement  of  operations  for the year ended June 30, 2005 in the Audited  2005
Financial  Statements.  As a result, the consolidated  balance sheets as of June
30,  2005  and  October  1,  2005 and the  related  consolidated  statements  of
operations,  cash flows and  stockholders'  equity have been restated to correct
for this change.

         In addition,  the Company has included additional adjustments amounting
to $0.1 million to be included in this restatement.

Management Letter From Amper

         Independently,  on January 12, 2006, the Company received a letter from
Amper  indicating that KAAI had material  weaknesses in the design and operation
of its internal control over financial  reporting with respect to the process of
preparing and reviewing  annual and interim  financial  statements,  and related
timely account  analysis and  reconciliations.  Material  weaknesses  identified
resulted from inadequate  resources in the financial  reporting area and lack of
appropriate  technical training of such resources relating to the preparation of
financial   statements  and  disclosures  and  the  accounting  for  significant
transactions.

         In order to  remediate  these  weaknesses,  the  Company  has  retained
another  accounting firm in which members of that firm's  accounting  staff will
work under the supervision of the Chief Financial Officer of the Company and the
accounting firm.  Additional  resources from the accounting firm may be retained
on an as needed basis. Also, the Company has retained an information  technology
firm to upgrade operating, financial and accounting systems which is expected to
further  improve the control  environment.  The above remedial  actions have not
been in place long  enough to have been  tested and will be  assessed  for their
adequacy on a continuous basis.

         Except as  described  above,  there  have not been any  changes  in the
Company's internal control over financial  reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) since the beginning of the
quarter ended December 31, 2005 that have materially affected, or are reasonable
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.



                                      -30-
<PAGE>

PART II       OTHER INFORMATION

ITEM 6.       EXHIBITS

         (a) The following exhibits are filed herewith:

       Exhibit
       Number      Description
       ------      -----------

       10.01       Amendment and Consent,  dated  February 21, 2006,  among
                   the Company,  KAAI,  Anushka PBG  Acquisition  Sub, LLC,
                   Anushka Boca Acquisition Sub, LLC, Wild Hare Acquisition
                   Sub,  LLC,  Dischino  Corporation,  Advanced  K, LLC and
                   Technology Investment Capital Corp.

       31.1        Rule 13a-14(a)/15d-14(a) Certification of Principal Executive
                   Officer.

       31.2        Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
                   Officer.

       32.1        Section 1350 Certification of Principal Executive Officer.

       32.2        Section 1350 Certification of Principal Financial Officer.





                                      -31-
<PAGE>



                                   SIGNATURES
                                   ----------


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        TRUEYOU.COM, INC.


Date:  February 21, 2006                /s/ John Higgins
                                        ----------------------------------------
                                        John Higgins
                                        President



<PAGE>


                                  EXHIBIT INDEX
                                  -------------



       Exhibit
       Number      Description
       ------      -----------

       10.01       Amendment and Consent,  dated  February 21, 2006,  among
                   the Company,  KAAI,  Anushka PBG  Acquisition  Sub, LLC,
                   Anushka Boca Acquisition Sub, LLC, Wild Hare Acquisition
                   Sub,  LLC,  Dischino  Corporation,  Advanced  K, LLC and
                   Technology Investment Capital Corp.

       31.1        Rule 13a-14(a)/15d-14(a) Certification of Principal Executive
                   Officer.

       31.2        Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
                   Officer.

       32.1        Section 1350 Certification of Principal Executive Officer.

       32.2        Section 1350 Certification of Principal Financial Officer.