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

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 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: [000-28277]

                            HERITAGE WORLDWIDE, INC.
        ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                               Delaware 13-4196258
               ----------------------------- --------------------
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)


             337 Avenue de Bruxelles La Seyne-Sur-Mer (France) 83507
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                              (011) (33) 494-109810
                        ---------------------------------
                (Issuer's telephone number, including area code)


Check  whether  the issuer  has (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The total  number  of shares of the  issuers'  common  stock,  $.001 par  value,
outstanding at October 31, 2005 was 17,410,299.

Transitional Small Business Disclosure Format: Yes |_| No |X|






<PAGE>


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


     To the extent that the  information  presented in this Quarterly  Report on
Form  10-QSB for the  quarter  ended  September  30,  2005  discusses  financial
projections,  information  or  expectations  about our  products or markets,  or
otherwise   makes   statements   about  future  events,   such   statements  are
forward-looking.  We are making these forward-looking  statements in reliance on
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995.   Although  we  believe   that  the   expectations   reflected   in  these
forward-looking  statements  are based on  reasonable  assumptions,  there are a
number of risks and  uncertainties  that could  cause  actual  results to differ
materially from such forward-looking  statements.  These risks and uncertainties
are described,  among other places in this Quarterly  Report,  in  "Management's
Plan of Operation."

     In addition,  we disclaim  any  obligations  to update any  forward-looking
statements to reflect events or  circumstances  after the date of this Quarterly
Report.  When considering such  forward-looking  statements,  you should keep in
mind the risks  referenced  above and the other  cautionary  statements  in this
Quarterly Report.



























                                       2
<PAGE>

                    HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               September 30, 2005
                                   (Unaudited)


                                     ASSETS
<TABLE>
<CAPTION>
Current Assets:
<S>                                                                                   <C>
  Cash                                                                                $     413,419
  Accounts receivable, net of an allowance for doubtful accounts of $ 907,816
   and an allowance for product returns of $196,523                                       4,663,000
  Inventories                                                                             3,097,845
  Prepaid expenses and other current assets                                                 738,780
                                                                                      --------------
     Total current assets                                                                 8,913,044

Property and equipment, net of accumulated depreciation of $3,097,024                     1,544,374
Goodwill                                                                                  1,000,518
Investment in SCI Lucas                                                                     528,195
Other assets                                                                                365,707
                                                                                      --------------
     Total assets                                                                     $  12,351,838
                                                                                      ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Lines of credit                                                                    $     869,066
  Accounts payable and accrued expenses                                                   4,218,607
  Current portion of long term debt                                                          77,378
  Due to related parties                                                                     75,561
  Reserve for product replacements                                                          429,177
                                                                                      --------------
     Total current liabilities                                                            5,669,789

Convertible debentures and related accrued interest payable,
    net of discount of $1,849,679                                                         2,320,170
Long term debt, net of current portion                                                      335,042
                                                                                      --------------
     Total liabilities                                                                    8,325,001
                                                                                      --------------

Minority interest                                                                           887,830
                                                                                      --------------

Stockholders' Equity:
  Common stock; $.001 par value, 50,000,000 shares authorized,
    18,160,299 issued and 17,410,299 outstanding                                             17,411
  Additional paid-in capital                                                              5,686,193
  Accumulated other comprehensive income (foreign currency translation adjustment)        1,518,090
  Accumulated deficit                                                                    (4,082,687)
                                                                                      --------------
     Total stockholders' equity                                                           3,139,007
                                                                                      --------------

     Total liabilities and stockholders' equity                                       $  12,351,838
                                                                                      ==============

</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.



                                        3


<PAGE>
                    HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                              For the Three-Month Period Ended
                                               September 30,
                                              ------------------------------
                                                  2005            2004
                                              --------------  --------------
<S>                                           <C>             <C>
Revenues                                      $   3,022,392   $   2,883,722

Cost of revenues                                  1,598,172       1,271,418
                                              --------------  --------------

     Gross profit                                 1,424,220       1,612,304
                                              --------------  --------------

Operating expenses:
  Selling, general and administrative               879,189       1,022,402
  Research and development                          251,897         272,400
                                              --------------  --------------

     Total operating expenses                     1,131,086       1,294,802
                                              --------------  --------------
Income before other expenses and
minority interest                                   293,134         317,502
                                              --------------  --------------

Other expenses:
  Other income (expense)                            (17,078)         12,292
  Gain in equity investment                          16,328           6,385
  Interest expense                                 (162,946)       (157,382)
                                              --------------  --------------

     Total other expenses                          (163,696)       (138,705)
                                              --------------  --------------


Net income before minority interest                 129,438         178,797

Minority interest                                   (11,620)         (9,143)
                                              --------------  --------------

Net income                                          117,818         169,654

Other comprehensive income, net of taxes
  Foreign currency translation adjustment           (29,312)        189,758
                                              --------------  --------------

     Comprehensive income                     $      88,506   $     359,412
                                              ==============  ==============

Basic net income per common share             $        0.01   $        0.01
                                              ==============  ==============

Basic weighted average common
shares outstanding                               17,410,299      17,410,299
                                              ==============  ==============

Diluted net income per share                  $        0.01   $        0.01
                                              ==============  ==============

Diluted weighted average common share
outstanding                                      17,423,087      17,410,299
                                              ==============  ==============

</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.


                                        4
<PAGE>

                    HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                  For the Three-Month Period Ended
                                                           September 30,
                                                  --------------------------------
                                                        2005           2004
                                                  ---------------  ---------------
<S>                                                 <C>              <C>
Cash flows from operating activities:
Net income                                          $    117,818     $   169,654
Adjustments to reconcile net income to net cash
provided by operating activities:
   Interest expense related to debenture discount        116,748          92,112
   Depreciation and amortization                         130,242         141,572
   Provision for doubtful accounts                      (111,025)       (114,091)
   Gain on equity investment                             (16,328)         (6,385)
   Minority interest                                      11,620           9,143
Change in operating assets and liabilities:
   Accounts receivable                                    (9,096)        713,597
   Inventories                                           224,119        (168,147)
   Prepaid expenses and other current assets              10,591         (48,945)
  Accrued interest on convertible debentures              32,154          49,849
   Provision for product replacements                          -          36,558
   Accounts payable and accrued expenses                (160,118)       (223,094)
                                                    -------------  --------------

Net cash provided by operating activities                346,725         651,823
                                                    -------------  --------------

Cash flows from investing activity:
   Purchases of property and equipment                   (84,299)       (125,259)
                                                    -------------  --------------

Net cash used in investing activity                      (84,299)       (125,259)
                                                    -------------  --------------

Cash flows from financing activities:
   Decrease in lines of credit                          (157,756)        (11,810)
   Proceeds from long term debt                                -         141,212
   Repayment of long term debt                          (128,033)        (51,555)
   Proceeds from subscriptions receivable                      -           2,541
   Increase (decrease) in due to stockholders             (3,311)        161,200
                                                    -------------  --------------

Net cash (used in) provided by financing activities     (289,100)        241,588
                                                    -------------  --------------

Effect of exchange rate changes on cash                   (1,890)         30,549
                                                    -------------  --------------

(Decrease) increase in cash                              (28,564)        798,701

Cash, beginning of period                                441,983         168,748
                                                    -------------  --------------

Cash, end of period                                   $  413,419     $   967,449
                                                    =============  ==============

Supplemental disclosures of cash flow information:
     Cash paid during the period for interest         $    9,908     $    15,422
                                                    =============  ==============

     Cash paid during the period for taxes            $       -      $         -
                                                    =============  ==============

Non-Cash Investing and Financing Activities:

Conversion of due to shareholder in investment
 in subsidiary and corresponding increase in
 minority interest                                    $       -      $   610,886
                                                    =============  ==============
</TABLE>


            See Notes to Unaudited Consolidated Financial Statements.

                                        5

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2005
                                   (Unaudited)


NOTE 1 - NATURE OF BUSINESS AND ACQUISITION

Heritage  Worldwide,  Inc.  (the  "Company")  was  incorporated  in the State of
Delaware in 2001. The Company and its  subsidiaries  develop,  manufacture,  and
market breast and other body implants and body support products  worldwide.  The
Company  maintains  its  production  facility  and  headquarters  in the  Toulon
metropolitan  area in Southern  France.  It also has a distribution  facility in
Spain.


NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions  to Form 10-QSB.  Accordingly,
they do not include all of the information  and footnotes  required by generally
accepted accounting principles for complete financial statements. In the opinion
of  management,  all  adjustments  (consisting  of  normal  recurring  accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results  for the three  months  ended  September  30,  2005 are not  necessarily
indicative  of the results  that may be expected for the fiscal year ending June
30,  2006.  For  further  information,  refer to the  financial  statements  and
footnotes thereto included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2005.

The accompanying unaudited consolidated financial statements present the results
of operations of the Company's French and Spanish  subsidiaries and OSMXM,  Inc.
("OS")  for the  three-month  period  ended  September  30,  2005 and 2004.  All
material  intercompany  accounts  and  transactions  between the Company and its
subsidiaries have been eliminated in consolidation.

The  accompanying  consolidated  financial  statements  include  the  results of
operations of SCI Lucas,  a real estate  holding  company,  in which the Company
holds an interest of approximately  38%. SCI Lucas owns the production  facility
and headquarters in which the Company  operates in Southern France.  The results
of  operations  of SCI  Lucas are  accounted  for  using  the  equity  method of
accounting.  All material  intercompany  accounts and  transactions  between the
Company and SCI Lucas have been eliminated.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates. Significant estimates
during the periods include the allowance for doubtful accounts, reserve for
obsolete inventory, the useful life of property, plant and equipment, and the
accrual of product replacement reserve.




                                       6

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable

Accounts  receivable  are  reported  at net  realizable  value.  The Company has
established an allowance for doubtful accounts based upon factors  pertaining to
the credit risk of specific customers, historical trends, and other information.
Delinquent  accounts are written-off  when it is determined that the amounts are
uncollectible.  At September 30, 2005,  the provision for doubtful  accounts was
approximately $900,000.  Additionally,  the Company has established an allowance
for product  returns  based upon factors  pertaining to  historical  trends.  At
September  30,  2005,  the  provision  for  product  returns  was  approximately
$200,000.

Revenue recognition

The Company  recognizes  product  revenue,  net of estimated sales discounts and
returns and allowances,  in accordance with Staff  Accounting  Bulletin No. 104,
"Revenue  Recognition  in  Financial   Statements"  and  SFAS  No.  48  "Revenue
Recognition  When Right of Return  Exists." These  statements  established  that
revenue can be recognized when persuasive evidence of an arrangement exists, the
product has been shipped,  all  significant  contractual  obligations  have been
satisfied,  the fee is  fixed  or  determinable  and  collection  is  reasonably
assured.

Stock options

The Company  accounts for stock options  issued to employees in accordance  with
the  provisions  of  Accounting   Principles   Board  ("APB")  Opinion  No.  25,
"Accounting  for Stock Issued to  Employees,"  and related  interpretations.  As
such,  compensation  cost is  measured on the date of grant as the excess of the
current  market  price of the  underlying  stock over the exercise  price.  Such
compensation  amounts, if any, are amortized over the respective vesting periods
of the option  grant.  We adopted  the  disclosure  provisions  of SFAS No. 123,
"Accounting  for  Stock-Based   Compensation"  and  SFAS  148,  "Accounting  for
Stock-Based Compensation -Transition and Disclosure",  which permits entities to
provide  pro forma net  income  (loss) and pro forma  earnings  (loss) per share
disclosures for employee stock option grants as if the fair-valued  based method
defined in SFAS No. 123 had been applied. The Company accounts for stock options
and stock issued to  non-employees  for goods or services in accordance with the
fair value method of SFAS 123.

No stock-based  employee  compensation  cost is reflected in net income,  as all
options  granted  under the  Company's  plans had an exercise  price equal to or
above market  value of the  underlying  common  stock on the date of grant.  Had
compensation  cost  for  the  Company's  stock-based   compensation  plans  been
determined  based on the fair value at the grant  dates for grants  under  those
plans consistent with the method of SFAS No. 123, the Company's cash flows would
have  remained  unchanged,  however net income and earnings per share would have
been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                        2005              2004
                                                                     ----------        ----------
<S>                                                                  <C>               <C>
Net income as reported:                                              $ 117,818         $ 169,654
Deduct: Total stock-base employee compensation expense
           determined under fair value based method for all
           awards, net of related tax effects                          (62,188)          (61,906)
                                                                     ----------        ----------
Net income pro forma                                                 $  55,630         $ 107,748
                                                                     ==========        ===========
</TABLE>


                                       7

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The fair value of the  options  granted  during  the  three-month  period  ended
September 30, 2004 was determined using the Black-Scholes  option-pricing  model
with the following assumptions:  risk-free interest of 3.7%; stock volatility of
44%; no dividends;  estimated life of 48 months; and no dividend expected during
the term.

Foreign currency translation

For  foreign  operations  with the local  currency as the  functional  currency,
assets  and  liabilities  are  translated  from the local  currencies  into U.S.
dollars at the exchange rate  prevailing  at the balance  sheet date.  Revenues,
expenses  and cash flows are  translated  at the average  exchange  rate for the
period to approximate  translation at the exchange rate  prevailing at the dates
those  elements  are  recognized  in  the  financial   statements.   Translation
adjustments  resulting  from the  process  of  translating  the  local  currency
financial statements into U.S. dollars are included in determining comprehensive
loss. As of September 30, 2005,  the exchange rate for the Euros (EUR) was $1.20
US for 1.00 EUR.

The  functional  currency  of the  Company's  French  subsidiaries  is the local
currency.  The financial  statements of the  subsidiary are translated to United
States dollars using  period-end  rates of exchange for assets and  liabilities,
and the  average  rate of  exchange  for the period  for  revenues,  costs,  and
expenses.  Net gains and losses resulting from foreign exchange transactions are
included in the consolidated statements of operations.

Inventories

Inventories  are stated at the lower of cost or market,  cost  determined by the
first-in,  first-out  (FIFO)  method.  The Company writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory  and the  estimated  market  value based upon  assumptions
about future demand and market conditions. Goodwill

Goodwill  represents the excess of costs over fair value of assets of businesses
acquired.  In June  2001  the  Financial  Accounting  Standards  Board  ("FASB")
approved the issuance of Statement of Financial  Accounting  Standards  ("SFAS")
No.  141,  "Business  Combinations"  and  SFAS  No.  142,  "Goodwill  and  Other
Intangible  Assets." The new  standards  require that all business  combinations
initiated  after June 30, 2001 be accounted  for using the purchase  method.  In
addition,  all intangible assets acquired that are obtained through  contractual
or legal right, or are capable of being separately sold, transferred,  licensed,
rented  or  exchanged  shall be  recognized  as an asset  apart  from  goodwill.
Goodwill  and  intangibles  with  indefinite  lives will no longer be subject to
amortization,  but  will  be  subject  to at  least  an  annual  assessment  for
impairment  by  applying a fair value  based  test.  The  Company's  goodwill at
September 30, 2005 results from its 2002  acquisition  of its Spain  subsidiary.
Management has  established  that based on future cash flows  generated from its
Spain's  operations,  the  Company's  goodwill  at  September  30,  2005  is not
impaired.




                                       8

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever  circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered.  In such  circumstances,  the Company will estimate the future
cash  flows  expected  to  result  from the use of the  asset  and its  eventual
disposition.  Future  cash  flows are the future  cash  inflows  expected  to be
generated  by an asset less the future  outflows  expected  to be  necessary  to
obtain those inflows. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, the
Company  will  recognize an  impairment  loss to adjust to the fair value of the
asset.  At  September  30,  2005,  the Company  believes  that there has been no
impairment of its long-lived assets. Investment

The  Company's  investment  in SCI Lucas is reported  using the equity method of
accounting.  Under this  method the  initial  investment  is  recorded  at cost.
Subsequently,  the investment is increased or decreased to reflect the Company's
share of income, losses and dividends paid. Income per Share

The  Company  presents  basic  income per share  and,  if  appropriate,  diluted
earnings per share in accordance  with the  provisions of SFAS No. 128 "Earnings
per Share"  ("SFAS 128").  Under SFAS 128,  basic net income (loss) per share is
computed by dividing the net income (loss) for the year by the weighted  average
number of common  shares  outstanding  during the year.  Diluted  net income per
share is  computed  by  dividing  the net  income  for the year by the  weighted
average number of common shares and common share equivalents  outstanding during
the year. The Company has 1,175,000  options  outstanding at September 30, 2005.
Additionally,  the  Company  may  have to  issue  up to  2,220,512  shares  upon
conversion of certain convertible  debentures,  including those exchanged during
September 2005. Common share equivalents have been excluded from the computation
of the diluted earnings per share due to their anti-dilutive  effect. Fair Value
of Financial Instruments

The  carrying  amounts  of  financial  instruments,   including  cash,  accounts
receivable,   lines  of  credit  and  accounts   payable  and  accrued  expenses
approximate  fair value at September  30, 2005 because of the  relatively  short
maturity  of  the  instruments.   The  carrying  value  of,   capitalized  lease
obligations,  long-term debt, and convertible  debentures approximate fair value
at September 30, 2005 based upon terms  available  for  companies  under similar
arrangements.




                                       9

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

New Accounting Pronouncements

In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
151 "Inventory Costs". This Statement amends the guidance in ARB No. 43, Chapter
4, "Inventory  Pricing,  to clarify the accounting for abnormal  amounts of idle
facility expense,  freight,  handling costs, and wasted material (spoilage).  In
addition,  this Statement requires that allocation of fixed production  overhead
to the costs of  conversion  be based on the normal  capacity of the  production
facilities.  The Company has adopted the provisions of this Statement  effective
July 1, 2005.

In June 2004,  the Emerging  Issues Task Force (EITF) issued EITF No. 03-01 "The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments"  (EITF  03-01).  EITF  03-01  provides  guidance  with  respect  to
determining the meaning of  other-than-temporary  impairment and its application
to debt and  equity  securities  within  the  scope of  Statement  of  Financial
Accounting  Standards No. 115,  "Accounting for Certain  Investments in Debt and
Equity Securities",  including  investments  accounted for under the cost method
and  new  disclosure   requirements  for  investments  that  are  deemed  to  be
temporarily  impaired. We understand the Financial Accounting Standards Board is
currently   reconsidering   disclosure,    measurement,   and   recognition   of
other-than-temporary impairments of debt and equity securities under EITF 03-01.
Until new guidance is issued,  the  disclosure  requirements  of EITF 03-01 were
effective for our fiscal 2005 annual consolidated financial statements.

In December 2004, the Financial  Accounting  Standards Board finalized Statement
of Financial  Accounting Standards No. 123R,  "Share-Based  Payment" (FAS 123R),
amending FAS No. 123, effective  beginning our first quarter of fiscal 2006. FAS
123R will require us to expense  stock options based on grant date fair value in
our  financial  statements.  Further,  the  adoption  of FAS 123R  will  require
additional   accounting  related  to  the  income  tax  effects  and  additional
disclosure  regarding the cash flow effects  resulting from share-based  payment
arrangements. The effect of expensing stock options on our results of operations
using  a  Black-Scholes  option-pricing  model  is  presented  in our  financial
statements in Note 1 -- Basis of Presentation-Stock-Based  Compensation. We will
adopt FAS 123R using the modified  prospective  method and the adoption  thereof
will  have no effect  on our cash  flows,  but is  expected  to have a  material
adverse  impact on our results of  operations.  We anticipate the pre-tax charge
for FAS  123R to be in the  range of  $250,000  to  $500,000  for  fiscal  2007,
however,  the actual pre-tax charge could significantly differ from our estimate
if facts  and  assumptions  used to  estimate  fair  value  during  fiscal  2007
significantly differ from those used in modeling our estimate.

In May 2005,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standards  No.  154,   "Accounting  Changes  and  Error
Corrections" (FAS 154). FAS 154 replaces Accounting Principals Board Opinion No.
20 (APB 20) and  Statement of Financial  Accounting  Standards  No. 3 "Reporting
Accounting  Changes  in  Interim  Financial  Statements",  and  applies  to  all
voluntary  changes in accounting  principle,  and changes the  requirements  for
accounting  for and  reporting  of a  change  in  accounting  principle.  APB 20
previously  required  that most  voluntary  changes in  accounting  principle be
recognized  by  including  in net  income of the  period of change a  cumulative
effect of  changing to the new  accounting  principle  whereas FAS 154  requires
retrospective  application to prior periods' financial statements of a voluntary
change in accounting principle, unless it is impracticable. FAS 154 enhances the
consistency of financial  information between periods. FAS 154 will be effective
beginning the first quarter of our fiscal 2007. We do not expect the adoption of
FAS 154 will  have a  material  impact on our  financial  position,  results  of
operations, or cash flows.



                                       10

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Provision for returns

In the normal course of business,  the Company does not provide  stock-balancing
or price  protection  rights to its  distributors;  however,  on a non-recurring
basis, we have historically  accepted product returns. The Company estimates its
provision for product returns to amount to  approximately  $200,000 at September
30, 2005. Management  establishes  provisions for estimated returns concurrently
with the  recognition  of revenue.  The provisions  are  established  based upon
consideration of a variety of factors, including, among other things, recent and
historical  return rates for both specific  distributors and projected  economic
conditions.

Provision for Product Replacements

The Company provides a product replacement program on its products.  The Company
provides an accrual for the estimated  cost of product  replacement  and product
liability  claims at the time revenue is recognized.  Such accruals are based on
estimates,  which are based on relevant  factors such as historical  experience,
the warranty period,  estimated  replacement  costs,  identified product quality
issues and are discounted to a current value. Management estimated the amount of
potential  future  product  replacement  claims based on  statistical  analysis.
Changes to actual claims and interest rates could have a material  impact on the
statistical  calculation  which could materially  impact the Company's  reported
expenses and results of operations.

Management  does  not  believe  that  recently  issued,  but not  yet  effective
accounting  pronouncements  if currently adopted would have a material effect on
the accompanying financial statements.

Concentration of Credit Risks

The Company is subject to  concentrations of credit risk primarily from cash and
cash equivalents and accounts  receivable.  The Company maintains  accounts with
French  financial  institutions,  which  at times  exceeds  the  insured  French
statutory  limit of  approximately  $150,000.  The Company  minimizes its credit
risks associated with cash by periodically  evaluating the credit quality of its
primary financial institutions.  The Company's accounts receivables are due from
surgeons  in France and from  distributors  in all other  countries  in which it
markets its  products.  The Company  does not require  collateral  to secure its
accounts receivables. However, the Company regularly insures a proportion of its
accounts receivable through a financial institution.  At September 30, 2005, the
financial  institution  insured  approximately  $3.8  million  of the  Company's
accounts receivables. One of the Company's customers accounted for approximately
15% of its net accounts  receivable at September  30, 2005.  No other  customers
accounted for more than 10% of its net accounts receivables.


Customers Concentration Risk

Two of the  Company's  customers  accounted for 18.8% and 10.4% of its revenues,
respectively,  during the three-month ended September 30, 2005, as well as 13.9%
and 15.4% of its revenues, respectively,  during the three-month ended September
30, 2004. The Company minimizes its concentration risk associated with customers
by diversifying its customer base and introducing its products in new countries.




                                       11
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)


NOTE 4 - CONVERTIBLE DEBENTURES

On October 9, 2003, OS entered into a convertible  debentures purchase agreement
(the "Agreement")  with HEM Mutual Assurance,  LLC ("HEM") to sell $1,000,000 of
1% convertible debentures due on October 9, 2008. Interest accrued from the date
of the transaction and was payable in cash or common stock, at the option of the
debenture holder. In the event of default, as defined in the Agreement, interest
accrued at 15% per annum.  The conversion  price for one  convertible  debenture
amounting  to  $498,750  was the lesser of (a) $1.25 or (b) 100% of the  average
three lowest  closing bid prices during the last forty trading days  immediately
preceding  the  conversion.  The  conversion  price for the  second  convertible
debenture  amounting  to $500,000 was the lesser of (a) $1.56 or (b) 100% of the
average  three  lowest  closing bid prices  during the last forty  trading  days
immediately  preceding  the  conversion.  The  conversion  price  for the  third
convertible  debenture amounting to $1,250 was $0.001. As part of the Agreement,
OS was  required to  maintain a common  stock  escrow  account  with  10,000,000
unrestricted,  free-trading  shares of common  stock.  As part of the  Company's
merger with OS on October 9, 2003, the Company  assumed all the  obligations and
responsibilities of the Agreement.  In return for issuing the debentures to HEM,
the Company  received  $500,000 in December 2003 and the  remaining  $500,000 on
January 9, 2004.

On September 9, 2005, Eurofortune Holding, S.A. ("Eurofortune"), an affiliate of
the  Company's  chief  executive   officer,   purchased  the  three  convertible
debentures  issued  to HEM.  Simultaneously,  Eurofortune  exchanged  the  three
debentures for two convertible  debentures  issued by the Company each having an
aggregate  principal  amount of $500,000.  The outstanding  principal amount and
accrued  interest  at the  rate of 1% per  annum  of the  debentures  is due and
payable on October 9, 2008. The conversion prices of the debentures are fixed at
$1.25 and $1.56.  Additionally,  the 10 million unrestricted free-trading shares
of the Company's common stock held in escrow were returned to the treasury.

The convertible  debentures initially issued to HEM and reissued to Eurofortune,
contain an imbedded beneficial conversion feature since the fair market value of
the common stock  exceeds the most  beneficial  exercise  price on the debenture
issuance  date.  The value was computed as  $1,000,000,  which will be amortized
over the respective term of the debentures.

In  April  2004,  the  Company  sold  its  Senior  Convertible   Debenture  (the
"Debenture") in the face amount of $3,000,000 to Armadillo Investments,  PLC. In
consideration for the Debenture,  the Company received 1,595,745 ordinary shares
of  Armadillo  Investments.  The  Company  immediately  sold  these  shares  for
approximately $1,420,000.  The Debenture does not bear interest. In the event of
default,  as defined under the Debenture,  The Debenture accrues interest at the
rate of 10% per annum. The Debenture matures on March 25, 2009. The Debenture is
convertible  into our common stock at a  conversion  price per share of (a) four
dollars  ($4.00) (the "Fixed  Conversion  Price") or (b) eighty percent (80%) of
the lowest  closing bid price for the Common Stock in the ten (10) business days
preceding the date of conversion,  but in no event less than fifty percent (50%)
of the Fixed Conversion Price (the "Floating Conversion Price"). For purposes of
determining the closing bid price on any day,  reference shall be to the closing
bid price for a share of Common Stock on such date on the OTC Bulletin Board, as
reported on Bloomberg, L.P. (or similar organization or agency succeeding to its
functions of  reporting  prices).  The Company  granted  piggyback  registration
rights with respect to the common stock into which the Debenture is convertible.
The Company is required to  maintain in escrow  750,000  shares of common  stock
upon conversion of the Debenture.

The  difference  between  the face  amount  of the  Debenture  and the  proceeds
generated  from the shares  received in exchange of the  Debentures  amounted to
approximately  $1,580,000  and has been recorded as a debt  discount.  Such debt
discount is amortized over the term of the Debenture.


                                       12

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)


NOTE 4 - CONVERTIBLE DEBENTURES-continued

During the three-month period ended September 30 2005 and 2004, the amortization
of  the  debt  discount   amounted  to   approximately   $117,000  and  $92,000,
respectively,  and has been  included  in interest  expense in the  accompanying
consolidated financial statements.

NOTE 5 - LINES OF CREDIT

The  Company  entered  into  lines  of  credit  agreements  with  two  financial
institutions up to the aggregate amount of approximately $1,630,000. The Company
has used  approximately  $870,000  under such lines of credit at  September  30,
2005. The lines of credit bear interest at the EURIBOR rate plus 2.0% (2.107% at
September  30, 2005).  The  outstanding  principal  balance plus any interest is
payable on demand and is secured by accounts  receivables of approximately  $1.2
million and inventories of approximately $3.1 million.

NOTE 6 - PROMISSORY NOTE

Effective March 31, 2004, concurrent with an amended distribution agreement, the
Company issued to a distributor a revolving  promissory note for certain sums to
come due to Medicor based on Medicor's and the manufacturer's  administration of
product warranty and product warranty related claims. The note bears interest at
the rate of 6.75% per annum. The principal amount under the note as of September
30, 2005 was $0. The distributor has not recently provided an updated claim list
to the Company.  However,  the Company has provided a provision of approximately
$450,000  for the  payment of such  claims in its  accounts  payable and accrued
expenses as of September 30, 2005.

NOTE 7 - LEGAL CONTINGENCIES

In October 1999, June 2000 and July 2003,  separate but related  complaints were
filed by Saul Kwartin, Ruth Kwartin,  Steven M. Kwartin, Robert Kwartin and Nina
Kwartin  against our  subsidiary  Poly  Implant  Protheses,  S.A.  ("PIP"),  III
Acquisition Corp. d/b/a PIP America,  PIP/USA, Inc., Jean Claude Mas, our former
CEO, personally, and others, in the Circuit Court of Miami-Dade County, Florida.
Plaintiffs  are all  members  of one family who  purport to be  shareholders  of
PIP/USA,  Inc., a distributor  of PIP,  suing  derivatively  on its behalf,  and
individually,  and seeking to rescind various  transactions  between PIP America
and PIP, and seeking to impose liability  against PIP and its  co-defendants for
unspecified monetary damages arising out of alleged tortious and other purported
wrongful acts concerning alleged relationships  between plaintiffs,  PIP and the
other  defendants.  Initially,  two cases were filed:  one in October of 1999 by
Saul and Ruth Kwartin and assigned  Case No.  99-25227-CA-01  and one in June of
2000 by Steven Kwartin and assigned Case No.  00-14665-CA-01.  Case No. 99-25227
was voluntarily  dismissed by the Plaintiffs,  who then unsuccessfully  tried to
withdraw  their  dismissal.  The Plaintiffs  then appealed.  In May of 2004, the
appellate  court  affirmed  the trial  court's  Order  approving  the  voluntary
dismissal.  A motion by PIP/USA and Mr. Mas to recover their  attorneys' fees is
pending in the trial court, as is a motion to disqualify the Plaintiffs' counsel
in that lawsuit.  Case No.  00-14665-CA-01 by Steven Kwartin remains pending. In
June of 2003,  Robert and Nina  Kwartin  commenced a lawsuit  assigned  Case No.
03-15006.  That lawsuit  remains  pending.  In September of 2003,  Saul and Ruth
Kwartin filed another lawsuit assigned Case No. 0322537-CA-27,  alleging similar
claims to those  included  in the  dismissed  case.  Within a day or two of that
lawsuit,   Steven   Kwartin   filed  his  second   lawsuit   assigned  Case  No.
03-22399-CA-15,against  Mr. Mas and Donald McGhan only. On October 5, 2005,  the



                                       13

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)


NOTE 7 - LEGAL CONTINGENCIES-continued

Administrative Judge transferred all of the Kwartin family lawsuits to one judge
in the Eleventh Judicial Circuit.

In November of 2003,  Jessica  Fischer  Schnebel and fifteen other women filed a
Second Amended  Consolidated  Class Action Complaint against PIP, PIP/USA,  Inc.
and III Acquisition Corp. d/b/a PIP America in the Circuit Court of Cook County,
Illinois. The Second Amended Consolidated Class Action Complaint contains counts
alleging product liability,  breach of the implied warranties of merchantability
and fitness for a particular  purpose,  violation of the Illinois Consumer Fraud
Act and a contract claim alleging  third-party  beneficiary status.  Unspecified
monetary  damages,  exemplary  damages and attorneys  fees and costs are sought.
Motions to dismiss filed by PIP and PIP America remains pending and discovery is
underway.  The plaintiffs have not sought to date to certify any putative class.
Our U.S.  distributor  has tendered  this case to PIP, for defense and indemnity
pursuant to the distributor agreement.

Marsha Dicken, et al. v. PIP/USA,  Inc., et al., Case No. 2003-05588,  was filed
in January 2003 in the District Court of Harris County, Texas. Plaintiffs allege
claims  strict  liability,   breach  of  express  warranty,  breach  of  implied
warranties,  violation  of Section  402B of the  Restatement  (Second) of Torts,
negligence,   misrepresentations,   and  violation  of  Texas'  Deceptive  Trade
Practices Act.  Plaintiffs  seek an unspecified  amount in alleged  compensatory
damages, additional statutory damages, interest,  attorneys' fees and costs. The
lawsuit is in the discovery  phase and the trial is scheduled for March of 2006.
Our  distributor,  PIP America,  has settled the lawsuit against it. PIP America
had, prior to settling, tendered this case to Poly Implant Prostheses, S.A., for
defense and indemnity.

Heritage  Worldwide,  Inc.  and PIP and other  defendants  were sued by Madeline
Sanchez in New York Supreme Court in July of 2004 for alleged product  liability
and  other  related  claims.  Both  Heritage  Worldwide,  Inc.  and PIP deny any
liability  to the  Plaintiff  and  have  answered  the  Complaint  and  asserted
affirmative defenses. Discovery is ongoing.

PIP and PIP America were sued by a Susan Largent in the United  States  District
Court for the  District  of New  Mexico in  August of 2004 for  alleged  product
liability  and other related  claims.  PIP denies any liability to the Plaintiff
and has answered the Complaint and asserted affirmative defenses.

In April,  2005,  Heritage  Worldwide,  Inc. and PIP were sued in New York state
court by a New York law firm,  Morrison Cohen, for alleged unpaid legal fees and
expenses.  Heritage  removed  the  lawsuit  to federal  court,  where it remains
pending.  Heritage has answered  the  Complaint  and PIP has not yet been served
with process.

On July 19, 2005,  IP Resource Ltd ("IP"),  a British  corporation  sued PIP for
alleged patent infringement in the Trade Court of Paris (Tribunal de commerce de
Paris).  The  plaintiff  claims that PIP's breast  implants have an inside layer
between its silicone gel and the silicone shell,  similar to the layer protected
by the  plaintiff's  patent.  The plaintiff  claims in excess of $2.1 million in
damages  it  incurred  through  August  22,  2005,  which is the date its patent
expires. The Company believes such claims are frivolous and intend to defend its
position vigorously.

Other  than  certain  of  its  own  product   replacement   claims  that  it  is
administering,  PIP America is  indemnified  by  PIP/USA,  Inc.,  Poly  Implants
Protheses,  S.A., and Jean Claude Mas,  personally,  from all claims,  including
those asserted above.  As a result,  the Company  believes the costs  associated



                                       14

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (Unaudited)


NOTE 7 - LEGAL CONTINGENCIES-continued

with these  matters  will not have a material  adverse  impact on the  Company's
business,  results of operations or financial position. The Company has recorded
a provision of  approximately  $520,000 at September 30, 2005 in connection with
these matters.

The Company and its subsidiaries  have been and will continue to be periodically
named as a  defendant  in other  lawsuits  in the  normal  course  of  business,
including  product  liability  and  product  replacement   claims.   Litigation,
particularly  product liability  litigation,  can be expensive and disruptive to
normal business  operations and the results of complex legal  proceedings can be
very difficult to predict.  Claims against the Company or its subsidiaries  have
been and are  periodically  reviewed  with  counsel  in the  ordinary  course of
business. The Company presently believes it or its subsidiaries have meritorious
defenses in all  lawsuits in which the  Company or any of its  subsidiaries  are
defendants,  subject to the subsidiaries' continuing warranty obligations, which
the  subsidiaries  intend to continue to  satisfy.  While it is not  possible to
predict the outcome of these matters,  we believe that the costs associated with
them will not have a material adverse impact on the Company's business,  results
of operations or financial position.


NOTE 8 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company  operates in one single  market,  breast  implants  and analyzes its
revenues  derived  from two  geographic  locations:  France  and the rest of the
world.  The Company did not have revenues from the U.S.  during the  three-month
period ended September 30, 2005 and 2004.  Information about the Company's sales
in different geographic locations for the three-month period ended September 30,
2005  and  2004 is shown  below  pursuant  to the  provisions  of SFAS No.  131,
"Disclosures about segments of an Enterprise and Related Information."

                                        Three-month Period
                                        Ended September 30,
                                       2005                2004
                                   -----------          -----------
France                             $   511,476          $   622,554
Outside of France                    2,510,916            2,261,168
                                   -----------          -----------
                                   $ 3,022,392          $ 2,883,722
                                   ===========          ===========


Substantially all of the identifiable operating assets and liabilities of the
Company are within France.

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company  repaid its Chairman of the Board  approximately  $3,000  during the
three-month  period  ended  September  30,  2005.  The Chairman of the Board had
previously  advanced to the Company  approximately  $80,000 at July 1, 2005. All
amounts owed to the Company's Chairman of the Board are non-interest bearing and
are due upon demand.


                                       15

<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

We ceased making sales in the U.S. market in May 2000, as a result of changes in
FDA  regulations.  At that time, the U.S. market  represented  approximately  $4
million,  or 40% of our revenues.  We are continuing our efforts to re-enter the
U.S.  by  conducting  extensive  clinical  trials,  which is a  prerequisite  to
securing FDA approval.


We are also in the process of developing new products.  We are introducing a new
product  line of breast  implants  which is based on  titanium  coating.  We are
completing  the planning  phase of our European  clinical  trials and anticipate
that we will market such breast implants in the European Union within 24 months.
We  believe  that  the  costs  of  monitoring  the  clinical  trials  will  cost
approximately  $500,000 over this period. We will continue to invest in research
and  development  to enhance and  introduce new and existing  products.  To meet
these operational costs, we depend upon equity financings,  collaborations,  and
proceeds from short and long-term debt.


Critical Accounting Policies and Estimates

A summary  of  significant  accounting  policies  is  provided  in Note 1 to our
consolidated  financial statements included in our 2005 Form 10-KSB.  Management
believes that the  application of these  policies on a consistent  basis enables
the  Company to provide  useful and  reliable  financial  information  about the
Company's operating results and financial condition.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results will differ from those estimates.

Stock-Based  Compensation.  We account for stock options  issued to employees in
accordance  with the provisions of Accounting  Principles  Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation cost is measured on the date of grant as the excess of the
current  market  price of the  underlying  stock over the exercise  price.  Such
compensation  amounts, if any, are amortized over the respective vesting periods
of the option  grant.  We adopted  the  disclosure  provisions  of SFAS No. 123,
"Accounting  for  Stock-Based   Compensation"  and  SFAS  148,  "Accounting  for
Stock-Based Compensation -Transition and Disclosure",  which permits entities to
provide  pro forma net  income  (loss) and pro forma  earnings  (loss) per share
disclosures for employee stock option grants as if the fair-valued  based method
defined in SFAS No. 123 had been applied. We account for stock options and stock
issued to non-employees  for goods or services in accordance with the fair value
method of SFAS 123.

Revenues.  We recognize  product  revenue,  net of estimated sales discounts and
returns and allowances,  in accordance with Staff  Accounting  Bulletin No. 104,
"Revenue  Recognition  in  Financial   Statements"  and  SFAS  No.  48  "Revenue
Recognition  When Right of Return  Exists." These  statements  established  that
revenue can be recognized when persuasive evidence of an arrangement exists, the
product has been shipped,  all  significant  contractual  obligations  have been
satisfied,  the fee is  fixed  or  determinable  and  collection  is  reasonably
assured.

Accounts  receivables  and related  allowance  for doubtful  accounts.  Accounts
receivable  are  reported  at net  realizable  value.  We  have  established  an
allowance for doubtful accounts based upon factors pertaining to the credit risk
of specific  customers,  historical trends,  and other  information.  Delinquent
accounts  are   written-off   when  it  is  determined   that  the  amounts  are
uncollectible.


                                       16
<PAGE>

Inventories.  Inventories  are  stated  at the  lower  of cost or  market,  cost
determined by the first-in, first-out (FIFO) method. The Company writes down its
inventory for estimated  obsolescence  or  unmarketable  inventory  equal to the
difference  between the cost of inventory and the  estimated  market value based
upon assumptions about future demand and market conditions.

Goodwill.  At September 30, 2005, we had  approximately $1 million in indefinite
lived  goodwill  related  to our  acquisition  of our  subsidiary  in Spain.  We
evaluate goodwill based on the future  contributing  margins of such subsidiary.
We use judgment in assessing  goodwill for impairment.  Goodwill is reviewed for
impairment  annually,  or sooner if events or changes in circumstances  indicate
that the  carrying  amount  could  exceed fair  value.  Fair values are based on
discounted  cash flows using a discount rate  determined by our management to be
consistent  with industry  discount  rates and the risks inherent in our current
business  model.  In  accordance  with SFAS No. 142, we  completed  the required
impairment  tests of goodwill at the date of adoption  and annually as required.
There were no  impairment  charges  recorded as a result of the adoption of SFAS
No. 142 or annual  impairment  tests.  Due to uncertain  market  conditions  and
potential changes in our strategy and product portfolio, it is possible that the
forecasts we use to support our goodwill could change in the future, which could
result in non-cash charges that would adversely affect our results of operations
and financial condition.

Deferred Tax Assets. We are required to estimate our income taxes in each of the
jurisdictions  in which we  operate  as part of the  process  of  preparing  our
consolidated financial statements. At September 30, 2005, the Company has no net
deferred  tax assets.  SFAS No. 109,  Accounting  for Income  Taxes,  requires a
valuation  allowance to reduce the deferred tax assets reported if, based on the
weight of the evidence,  it is not more likely than not that some portion or all
of the  deferred tax assets will be realized.  Management  reviews  deferred tax
assets  periodically  for  recoverability  and  makes  estimates  and  judgments
regarding  the  expected  geographic  sources  of  taxable  income,  gains  from
investments,  as well as tax planning  strategies  in  assessing  the need for a
valuation  allowance.  We determined that a valuation allowance of approximately
$570,000  relating to foreign tax net operating loss carryovers was necessary to
reduce our  deferred  tax assets to the amount that will more likely than not be
realized.  If the estimates and assumptions used in our determination  change in
the  future,  we could be  required  to revise our  estimates  of the  valuation
allowances  against  our  deferred  tax assets and  adjust  our  provisions  for
additional  income taxes. In the ordinary course of global  business,  there are
transactions  for which the ultimate tax outcome is uncertain,  thus judgment is
required in determining the worldwide provision for income taxes. We provide for
income taxes on transactions based on our estimate of the probable liability. We
adjust our  provision  as  appropriate  for changes  that impact our  underlying
judgments.  Changes  that  impact  provision  estimates  include  such  items as
jurisdictional  interpretations  on tax filing positions based on the results of
tax audits and general tax authority rulings.  Due to the evolving nature of tax
rules combined with the large number of jurisdictions in which we operate, it is
possible  that our estimates of our tax  liability  and the  realization  of our
deferred tax assets could change in the future,  which may result in  additional
tax  liabilities  and  adversely  affect our  results of  operations,  financial
condition and cash flows.

Product replacements.  We provide a product replacement program on our products.
Management  estimated the amount of potential future product  replacement claims
based on statistical analysis.  Expected future obligations are determined based
on the history of product  shipments and claims and are  discounted to a current
value.  Changes to actual claims and interest rates could have a material impact
on the  statistical  calculation  which could  materially  impact the  Company's
reported expenses and results of operations.

This  discussion  and  analysis  of our  financial  condition  should be read in
connection with our consolidated  financial  statements and  accompanying  notes
thereto in the  Company's  Annual  Report  Form 10-KSB for the fiscal year ended
June 30, 2005,  including without limitation the information set forth under the
heading "Critical Accounting Policies and Estimates".



                                       17

<PAGE>

RESULTS OF OPERATIONS

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                           Increase/       Increase/
                                                      For the Three-Month Period Ended    (Decrease)      (Decrease)
                                                                 September 30,           2005 vs 2004    2005 vs 2004
                                                      --------------------------------
                                                            2005             2004              $              %
                                                      --------------    --------------  --------------  --------------
<S>                                                   <C>               <C>             <C>                  <C>
Revenues                                              $   3,022,392     $  2,883,722    $     138,670        4.8%

Cost of revenues                                          1,598,172        1,271,418          326,754       25.7%
                                                      --------------    --------------  --------------  --------------

     Gross profit                                         1,424,220        1,612,304         (188,084)     -11.7%
                                                      --------------    --------------  --------------  --------------

Operating expenses:
  Selling, general and administrative                       879,189        1,022,402         (143,213)     -14.0%
  Research and development                                  251,897          272,400          (20,503)      -7.5%
                                                      --------------    --------------  --------------  --------------

     Total operating expenses                             1,131,086        1,294,802         (163,716)     -12.6%
                                                      --------------    --------------  --------------  --------------

Loss before other expenses and
     income taxes                                           293,134          317,502          (24,368)      -7.7%
                                                      --------------    --------------  --------------  --------------

Other expenses:
  Other expense                                             (17,078)          12,292          (29,370)       NM
  Loss in equity investment                                  16,328            6,385            9,943      155.7%
  Interest expense                                         (162,946)        (157,382)          (5,564)       3.5%
                                                      --------------    --------------  --------------  --------------

     Total other expenses                                  (163,696)        (138,705)         (24,991)      18.0%
                                                      --------------    --------------  --------------  --------------


 Income (loss) before minority interest                     129,438          178,797         (49,359)      -27.6%

Minority interest                                           (11,620)          (9,143)         (2,477)       27.1%
                                                      --------------    --------------  --------------  --------------

Net income (loss)                                     $     117,818     $    169,654    $    (51,836)      -30.6%
                                                      ==============    ==============  ==============  ==============
NM: not meaningful

</TABLE>


                                       18
<PAGE>

Three Months Ended September 30, 2005 Compared with Three Months Ended September
30, 2004

Revenues

Revenues consist primarily of the sale of breast implants and other body support
products. The increase in revenues during the three-month period ended September
30, 2005 when  compared to the prior year period is  primarily  attributable  to
increased  volume of breast implants sold to new distributors in countries other
than France, such as in Latin America,  offset by a decrease in volume of breast
implants sold in France and a reduction in sales price of breast implants.

Cost of Revenues

Cost of revenues  consists  primarily  of materials  and direct  labor  expenses
associated  with the  production  of breast  implants.  The increase in costs of
revenues  during the  three-month  period ended  September 30, 2005 is primarily
attributable to higher  incidents of spoilage of unfinished  goods when compared
to the prior year period.  The Company is considering  substituting  its primary
supplier of silicone and other raw materials to reduce such incidents.

Selling and General Administrative Expenses

Selling,  general and administrative  expenses consist primarily of compensation
and related benefits of sales  representatives which market our products as well
as general and administrative  staff used to support our operations,  as well as
facilities-related  expenses  professional fees and allowance for bad debts. The
decrease in selling,  general and administrative expenses during the three-month
period  ended  September  30,  2005 when  compared  to the prior year  period is
primarily due to a decrease in the provision for doubtful  accounts at September
30, 2005.

Research and Development

Research and development  expenses primarily consist of compensation and related
benefits of  personnel  associated  with the  development  and  introduction  of
existing and future product lines. The research and development  expenses during
the three-month  period ended September 30, 2004 is substantially  comparable to
the prior year period.

Interest Expense

Interest expense consists primarily of amortization of debt discount  associated
with the issuance of convertible debentures and interest expense associated with
our lines of credit and other  long-term  debt. The interest  expense during the
three-month  period ended September 30, 2005 is substantially  comparable to the
prior year period.

Liquidity and Capital Resources.

During the  three-month  period ended September 30, 2005, we have generated cash
flows from operating activities of approximately  $350,000,  which is due to the
following:


                                       19
<PAGE>

     o    Our net income of approximately  $118,000 adjusted for non-cash items:
          debt discount of  approximately  $117,000,  depreciation  of $130,000,
          decrease in provision for doubtful accounts of approximately $110,000.
          Additionally,  our inventories level and accounts payable decreased by
          approximately $220,000 and $160,000, respectively.
     o    We incurred capital expenditures of approximately $85,000.
     o    Our net cash provided by operating  activities funded repayment on our
          lines of credit  and  long-term  debt of  approximately  $160,000  and
          $130,000, respectively.

During the  three-month  period ended September 30, 2004, we have generated cash
flows from operating activities of approximately  $650,000,  which is due to the
following:

     o    Our net income of approximately  $170,000 adjusted for non-cash items:
          debt  discount of  approximately  $90,000,  depreciation  of $140,000,
          decrease in provision for doubtful accounts of approximately $110,000.
          Additionally,  our accounts  receivable and accounts payable decreased
          by approximately $710,000 and $220,000, respectively.

     o    We incurred capital expenditures of approximately $125,000.

     o    Our net cash provided by operating  activities funded repayment on our
          long-term debt of approximately  $50,000.  Additionally,  we generated
          proceeds of  approximately  $140,000 and $160,000 from the issuance of
          long-term debt and from advances from a stockholder, Milo Finance, SA.

New Accounting Pronouncements

In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
151 "Inventory Costs". This Statement amends the guidance in ARB No. 43, Chapter
4, "Inventory  Pricing,  to clarify the accounting for abnormal  amounts of idle
facility expense,  freight,  handling costs, and wasted material (spoilage).  In
addition,  this Statement requires that allocation of fixed production  overhead
to the costs of  conversion  be based on the normal  capacity of the  production
facilities.  The Company has adopted the provisions of this Statement  effective
July 1, 2005.

In June 2004,  the Emerging  Issues Task Force (EITF) issued EITF No. 03-01 "The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments"  (EITF  03-01).  EITF  03-01  provides  guidance  with  respect  to
determining the meaning of  other-than-temporary  impairment and its application
to debt and  equity  securities  within  the  scope of  Statement  of  Financial
Accounting  Standards No. 115,  "Accounting for Certain  Investments in Debt and
Equity Securities",  including  investments  accounted for under the cost method
and  new  disclosure   requirements  for  investments  that  are  deemed  to  be
temporarily  impaired. We understand the Financial Accounting Standards Board is
currently   reconsidering   disclosure,    measurement,   and   recognition   of
other-than-temporary impairments of debt and equity securities under EITF 03-01.
Until new guidance is issued,  the  disclosure  requirements  of EITF 03-01 were
effective for our fiscal 2005 annual consolidated financial statements.

In December 2004, the Financial  Accounting  Standards Board finalized Statement
of Financial  Accounting Standards No. 123R,  "Share-Based  Payment" (FAS 123R),
amending FAS No. 123, effective  beginning our first quarter of fiscal 2006. FAS
123R will require us to expense  stock options based on grant date fair value in
our  financial  statements.  Further,  the  adoption  of FAS 123R  will  require
additional   accounting  related  to  the  income  tax  effects  and  additional
disclosure  regarding the cash flow effects  resulting from share-based  payment
arrangements. The effect of expensing stock options on our results of operations
using  a  Black-Scholes  option-pricing  model  is  presented  in our  financial
statements in Note 1 -- Basis of Presentation-Stock-Based  Compensation. We will
adopt FAS 123R using the modified  prospective  method and the adoption  thereof
will  have no effect  on our cash  flows,  but is  expected  to have a  material
adverse  impact on our results of  operations.  We anticipate the pre-tax charge
for FAS  123R to be in the  range of  $250,000  to  $500,000  for  fiscal  2007,
however,  the actual pre-tax charge could significantly differ from our estimate
if facts  and  assumptions  used to  estimate  fair  value  during  fiscal  2007
significantly differ from those used in modeling our estimate.


                                       20
<PAGE>

In May 2005,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standards  No.  154,   "Accounting  Changes  and  Error
Corrections" (FAS 154). FAS 154 replaces Accounting Principals Board Opinion No.
20 (APB 20) and  Statement of Financial  Accounting  Standards  No. 3 "Reporting
Accounting  Changes  in  Interim  Financial  Statements",  and  applies  to  all
voluntary  changes in accounting  principle,  and changes the  requirements  for
accounting  for and  reporting  of a  change  in  accounting  principle.  APB 20
previously  required  that most  voluntary  changes in  accounting  principle be
recognized  by  including  in net  income of the  period of change a  cumulative
effect of  changing to the new  accounting  principle  whereas FAS 154  requires
retrospective  application to prior periods' financial statements of a voluntary
change in accounting principle, unless it is impracticable. FAS 154 enhances the
consistency of financial  information between periods. FAS 154 will be effective
beginning the first quarter of our fiscal 2007. We do not expect the adoption of
FAS 154 will  have a  material  impact on our  financial  position,  results  of
operations, or cash flows.

ITEM 3. CONTROLS AND PROCEDURES

Our chief  executive  officer and our chief financial  officer (the  "Certifying
Officers") are responsible for establishing and maintaining  disclosure controls
and procedures for our Company.  Such officers have concluded  (based upon their
evaluations of these controls and procedures as of the end of the period covered
by this report) that our  disclosure  controls and  procedures  are effective to
ensure  that  information  required  to be  disclosed  by us in this  report  is
accumulated and communicated to management, including the Certifying Officers as
appropriate, to allow timely decisions regarding required disclosure.

The  Certifying  Officers  have also  indicated  that there were no  significant
changes in our internal controls over financial  reporting or other factors that
could  significantly  affect  such  controls  subsequent  to the  date of  their
evaluation, and there were no significant deficiencies and material weaknesses.

Our  management,  including the  Certifying  Officers,  does not expect that our
disclosure  controls or our  internal  controls  will  prevent all error and all
fraud. A control system, no matter how well conceived and operated,  can provide
only  reasonable,  not absolute,  assurance  that the  objectives of the control
system are met. In  addition,  the design of a control  system must  reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control  issues and instances of fraud,  if any,  within a company have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion  of two or more  people  or by  management
override of the control.  The design of any systems of controls is also based in
part upon certain  assumptions about the likelihood of future events,  and there
can be no assurance  that any design will succeed in achieving  its stated goals
under all potential future conditions.  Because of these inherent limitations in
a cost-effective  control system,  misstatements due to error or fraud may occur
and not be detected.



                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On July 19, 2005,  IP Resource Ltd ("IP"),  a British  corporation  sued PIP for
alleged patent infringement in the Trade Court of Paris (Tribunal de commerce de
Paris).  The  plaintiff  claims that PIP's breast  implants have an inside layer
between its silicone gel and the silicone shell,  similar to the layer protected
by the  plaintiff's  patent.  The plaintiff  claims in excess of $2.1 million in
damages  it  incurred  through  August  22,  2005,  which is the date its patent
expires.  We believe such claims are frivolous and intend to defend our position
vigorously.


                                       21

<PAGE>

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

    Exhibit No.            Description

       31.1     Certification of Chief Executive Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002. Filed herewith.

       31.2     Certification of Chief Financial Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002. Filed herewith.

       32.1     Certification  of Chief  Executive Officer  pursuant to 18 U.S.C
                Section 1350. Filed Herewith

       32.2     Certification  of Chief Financial Officer  pursuant to 18 U.S.C
                Section 1350. Filed Herewith.


























                                       22

<PAGE>


                                   SIGNATURES

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

                                        HERITAGE WORLDWIDE, INC.
                                             (Registrant)

Date:  November 14,2004             By: /s/   Alain Sereyjol-Garros
                                        --------------------------------
                                        Alain Sereyjol-Garros
                                        Chief Executive Officer


                                    By: /s/ Claude Couty
                                        --------------------------------
                                        Claude Couty
                                        Chief Financial Officer




























                                       23