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

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 2004

                                       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 (1) filed all reports  required to be filed by Section
13 or 15(d) of the  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 [ ]


The total number of shares of the issuer's common stock, $.001 par value,
outstanding at October 31, 2004 was 17,410,299.

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






<PAGE>

                            HERITAGE WORLDWIDE, INC.
                         QUARTERLY REPORT ON FORM 10-QSB
                               September 30, 2004



                                TABLE OF CONTENTS


                                                                            Page

Special Note Regarding Forward Looking Information...........................3


PART I - FINANCIAL INFORMATION

      Item 1 - Financial Statements

      Consolidated Balance Sheet
      As of September 30, 2004 (Unaudited)...................................F1
      Consolidated Statements of Operations (Unaudited)
      For the Three Months Ended September 30, 2004 and 2003.................F2
      Consolidated Statements of Cash Flows (Unaudited)
      For the Three Months Ended September 30, 2004 and 2003.................F3

      Notes to Consolidated Financial Statements..........................F4-F10

      Item 2 - Management's Discussion and Analysis or Plan of Operation....4-12

      Item 3 - Control and Procedures........................................13

PART II - OTHER INFORMATION

      Item 1 - Legal proceedings.............................................13

      Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds...13

      Item 6 - Exhibits......................................................14


                                        2

<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, 2004 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
Discussion and Analysis or 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.














                                       3

<PAGE>

                    HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               September 30, 2004
                                   (Unaudited)


                                     ASSETS
Current Assets:
  Cash                                                          $       967,449
  Accounts receivable, net of an allowance
   for doubtful accounts of $ 2,310,553                               2,854,021
  Inventories                                                         3,030,870
  Prepaid expenses and other current assets                             778,714
                                                                ----------------


     Total current assets                                             7,631,054

Property and equipment, net of accumulated
 depreciation of $3,041,032                                           1,786,365
Goodwill                                                              1,031,010
Investment in SCI Lucas                                                 480,731
Other assets                                                            264,443
                                                                ----------------


     Total assets                                               $    11,193,603
                                                                ================


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Lines of credit                                              $       939,211
  Accounts payable and accrued expenses                               4,226,851
  Current portion of long term debt                                     168,080
  Due to related parties                                                 17,979
  Warranty reserve                                                      330,576
                                                                ----------------


     Total current liabilities                                        5,682,697

Convertible debentures and related accrued
 interest payable, net of discount of $2,410,126                      1,747,279
Long term debt, net of current portion                                  556,722
                                                                ----------------


     Total liabilities                                                7,986,698
                                                                ----------------

Minority interest                                                       819,307
                                                                ----------------

Stockholders' Equity:
  Common stock; $.001 par value, 50,000,000 shares authorized,
    40,160,299 issued and 17,410,299 outstanding                         17,410
  Additional paid in capital                                          5,686,294
  Subscriptions receivable                                              (11,977)
  Accumulated other comprehensive income (foreign currency
   translation adjustment)                                            1,608,206
  Accumulated deficit                                                (4,912,335)
                                                                ----------------

     Total stockholders' equity                                       2,387,598
                                                                ----------------

     Total liabilities and stockholders' equity                 $    11,193,603
                                                                ================





                 See Notes to Consolidated Financial Statements.
                                      -F1-

<PAGE>

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



                                           For the Three-Month Period Ended
                                                   September 30,
                                           ------------------------------
                                               2004            2003
                                           --------------  --------------

Revenues                                     $ 2,883,722     $ 2,608,603

Cost of revenues                               1,271,418       1,602,937
                                           --------------  --------------

     Gross profit                              1,612,304       1,005,666
                                           --------------  --------------

Operating expenses:
  Selling, general and administrative          1,022,402         966,225
  Research and development                       272,400         324,492
                                           --------------  --------------

     Total operating expenses                  1,294,802       1,290,717
                                           --------------  --------------

Income loss before other expenses and
     income taxes                                317,502        (285,051)
                                           --------------  --------------

Other expenses:
  Other income (expense)                          12,292               -
  Gain (loss) in equity investment                 6,385               -
  Interest expense                              (157,382)        (33,296)
                                           --------------  --------------

     Total other expenses                       (138,705)        (33,296)
                                           --------------  --------------

Income (loss) before (provision for)
 benefit from taxes                              178,797        (318,347)

  (Provision for) benefit from income taxes            -         (34,833)
                                           --------------  --------------

Net income (loss) before minority interest       178,797        (353,180)

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

Net income (loss)                                169,654        (353,180)

Other comprehensive income, net of taxes
  Foreign currency translation adjustment        189,758        (382,497)
                                           --------------  --------------

     Comprehensive income (loss)           $     359,412   $    (735,677)
                                           ==============  ==============

Basic and diluted net income (loss)
 per common share                                  $0.01         $ (0.02)
                                           ==============  ==============

Basic weighted average common
shares outstanding                            17,410,299      16,294,667
                                           ==============  ==============



                 See Notes to Consolidated Financial Statements.
                                      -F2-

<PAGE>

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


                                                For the Three-Month Period Ended
                                                          September 30,
                                                  ----------------------------
                                                      2004           2003
                                                  -------------  -------------

Cash flows from operating activities:
Net income (loss)                                 $    169,654   $   (353,180)
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
   Interest expense related to debenture discount       92,112              -
   Depreciation and amortization                       141,572        138,412
   Provision for doubtful accounts                    (114,091)             -
   Deferred income tax                                       -         34,833
  Gain on equity investment                             (6,385)             -
   Minority interest                                     9,143              -
Change in operating assets and liabilities:
   Accounts receivable                                 713,597       (229,792)
   Inventories                                        (168,147)      (262,275)
   Prepaid expenses and other current assets           (48,945)        14,932
  Accrued interest on convertible debentures            49,849              -
   Provision for customer warranty                      36,558         32,685
   Accounts payable and accrued expenses              (223,094)       546,457
                                                  -------------  -------------

Net cash (used in) provided by operating
 activities                                            651,823        (77,928)
                                                  -------------  -------------

Cash flows from investing activity:
   Purchases of property and equipment                (125,259)       (53,234)
                                                  -------------  -------------

Net cash used in investing activity                   (125,259)       (53,234)
                                                  -------------  -------------

Cash flows from financing activities:
   (Decrease) increase in lines of credit              (11,810)       172,296
   Proceeds from long term debt                        141,212              -
   Repayment of long term debt                         (51,555)       (74,793)
   Proceeds from subscriptions receivable                2,541              -
   Proceeds from sale of common stock                        -         38,000
   Increase (decrease) in due to stockholders          161,200          6,024
                                                  -------------  -------------

Net cash provided by financing activities              241,588        141,527
                                                  -------------  -------------

Effect of exchange rate changes on cash                 30,549          9,986
                                                  -------------  -------------

Increase in cash                                       798,701         20,351

Cash, beginning of period                              168,748        107,064
                                                  -------------  -------------

Cash, end of period                               $ 967,449      $    127,415
                                                  =============  =============

Supplemental disclosures of cash flow information:
     Cash paid during the year for interest       $     15,422   $     33,405
                                                  =============  =============

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

Non-Cash Investing and Financing Activities:

Conversion of due to shareholder in investment
in subsidiary                                     $    610,886   $          -
                                                  =============  =============


                 See Notes to Consolidated Financial Statements.
                                      -F3-

<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                   (Unaudited)


NOTE 1 - NATURE OF BUSINESS AND ACQUISITION

Heritage Worldwide, Inc. (the "Company") is 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, 2004 are not necessarily
indicative of the results that may be expected for the fiscal year ending June
30, 2005. 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, 2004.

The accompanying unaudited consolidated financial statements present the results
of operations of the Company's French and Spanish subsidiaries for the
three-month period ended September 30, 2004 and 2003, respectively and OS MXM,
Inc. ("OS") from July 1, 2004 through September 30, 2004. The results of
operations of Heritage Worldwide, Inc. are reflected in the accompanying
financial statements for the period from March 1, 2003, the date of the reverse
merger with its French and Spanish subsidiaries through September 30, 2004. The
Stock Purchase Agreement has been accounted for as a reverse acquisition under
the purchase method for business acquisitions. Accordingly, the combination of
the two companies is recorded as a recapitalization of Heritage, pursuant to
which Poly Implant Protheses is treated as the continuing entity. 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 principals
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 warranty and product liability reserve.

                                      -F4-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004
                                   (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.

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.

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, 2004, the exchange rate for the Euros (EUR) was $1.24
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.

                                      -F5-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004
                                   (Unaudited)


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

New accounting pronouncements

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.

Product Warranties

The Company provides a product replacement and warranty program on its products.
The Company provides an accrual for the estimated cost of product warranties 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.

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 accrues from the date
of the transactions and is payable in cash or common stock, at the option of the
debenture holder. In the event of default, as defined in the Agreement, interest
shall accrue at 15% per annum. The conversion price for one convertible
debenture amounting to $498, 750 shall be 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 one convertible
debenture amounting to $500,000 shall be 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 one convertible
debenture amounting to $1,250 is $0.001. As part of the Agreement, OS is
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.

The convertible debentures 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.
For the three-month period ended September 30, 2004,approximately $92,000 of the
recorded debt discount has been amortized to interest expense.

                                      -F6-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004
                                   (Unaudited)

NOTE 4 - CONVERTIBLE DEBENTURES (continued)

The Company  received  several  conversion  notices  from HEM in  September  and
October 2004 totaling  approximately  $16,000 of the  outstanding  principal and
accrued interest under two of the debentures for 1,019,404  unrestricted,  free-
trading shares of common stock held in escrow by Gottbetter &Partners,  LLP, the
escrow  agent for the  transaction.  The Company has  objected to the release of
unrestricted,  free-trading  shares from escrow on the grounds  that  several of
HEM's  conversion  notices did not comply with the terms of the  debentures  and
that the  transactions  whereby OS issued the  debentures to HEM and the Company
merged with OS on the same day did not comply with the  requirements of Rule 504
of Regulation D promulgated  under the Securities Act of 1933 ( the  "Securities
Act").  Consequently,  the  Company  advised  HEM and the  escrow  agent that it
believes that the issuance of unrestricted,  free-trading shares to HEM would be
a  violation  of,  among  other  things,  the  registration  provisions  of  the
Securities Act.

Notwithstanding the Company's objections to the conversion notices of HEM,
the Company was advised on November 4, 2004 by legal counsel to the escrow agent
that the escrow agent will release 50,526 shares held in escrow to HEM pursuant
to HEM's conversion notice dated October 27, 2004 relating to $15,000 of
principal and accrued interest of one of the debentures. The Company has
requested legal counsel for the escrow agent to notify the Company whether the
escrow agent has released any shares from escrow to HEM. However, legal counsel
for the escrow agent has not provided the Company with any response to such
request. In addition to acting as escrow agent, Gottbetter and Partners, LLP
represented HEM in the acquisition of the debentures from OS and the Company in
its merger with OS.

NOTE 5 - 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, 2004 was $0. The distributor claims that the Company owes approximately
$460,000 under the promissory note as well as approximately $62,000 in legal
costs. The Company denies that such amounts are due under the promissory note
since it has not approved yet the sums due for product warranty and product
warranty related claims. However, the Company has provided a provision of
approximately $500,000 for the payment of such claims in its accounts payable
and accrued expenses as of September 30, 2004.

NOTE 6- STOCK OPTION PLAN

In July 2004, the Board of Directors adopted the Heritage Worldwide, Inc. 2004
Stock Option Plan (the "2004 Plan"). The Company intends to attract and retain
employees and valuable contractors by allowing them an additional incentive to
promote the financial success of the Company.

The 2004 Plan allows for the grant of both incentive stock options and
nonstatutory stock options. The 2004 Plan may be administered, interpreted and
constructed by the Board of Directors or a compensation committee. The maximum
number of shares of common stock which may be issued pursuant to options granted
under the 2004 Plan may not exceed 2,000,000 shares. During July 2004, the
Company issued 1,150,000 options with an exercise price of $2.20 per share. No
value was attributed to such shares. Accordingly, there are no reconciling items
between the net income(loss) and the pro forma net income(loss) pursuant to SFAS
123.

If any options granted under the 2004 Plan expires or terminates  without having
been exercised or ceased to be exercisable, such options will be available again
under the 2004 Plan.  All  employees  of the  Company and its  subsidiaries  are
eligible to receive  incentive  stock options and  nonstatutory  stock  options.
Non-employee  directors and outside  consultants who provided bona-fide services
not in  connection  with the offer or sale of  securities  in a capital  raising
transaction are eligible to receive nonstatutory stock options.  Incentive stock
options may not be granted  below  their fair market  value at the time of grant
or, if to an individual who beneficially owns more than 10% of the total

                                      -F7-

<PAGE>

                   HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004
                                   (Unaudited)

NOTE 6- STOCK OPTION PLAN (continued)

combined  voting power of all stock classes of the Company or a subsidiary,  the
option  price may not be less than 110% of the fair value of the common stock at
the time of grant.  The expiration  date of an incentive stock option may not be
longer  than  ten  years  from  the  date of  grant.  Option  holders,  or their
representatives,  may  exercise  their  vested  options up to three months after
their  employment  termination  or one year after their death or  permanent  and
total  disability.  The 2004 Plan  provides  for  adjustments  upon  changes  in
capitalization.


NOTE 7 - LEGAL CONTINGENCIES

In October 1999, June 2000 and July 2003, separate but related complaints were
filed by Saul and Ruth Kwartin, Steven M. Kwartin, and Robert and Nina Kwartin
respectively, and various other unnamed plaintiffs, against Poly Implant
Protheses, S.A. ("PIP"), our subsidiary, our U.S. distributor Medicor Ltd, Jean
Claude Mas, our former CEO, personally and others, in the Circuit Court of
Miami-Dade County, Florida.

Initially, two cases were filed in October 1999, Case No. 99-25227-CA-01 and
Case No. 00-14665-CA-01. Of the two, Case No. 99-25227 was dismissed. The same
plaintiffs then, in June 2000, filed Case No. 0322537-CA-27, alleging similar
claims to those included in the dismissed case. In June 2003, another member of
the same family filed Case No. 03-15006-CA-09, again alleging similar claims,
but on their own behalf. 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 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.

Peggy Williams v. PIP/USA,  Inc., Case No. 03 CH 9654, Jessica Fischer Schnebel,
et al. v.  PIP/USA,  Inc.,  Case No.  03CH07239,  Dawn Marie  Cooper,  et al. v.
PIP/USA, Inc., Case No. 03CH11316,  Miriam Furman, et al. v. PIP/USA, Inc., Case
No.  03CH10832 and Karen S. Witt, et al. v. PIP/USA,  Inc.,  Case No.  03CH12928
were filed in the Circuit Court of Cook County, Illinois,  Chancery Division, in
or around July 2003.  Counsel for Jessica Fischer  Schnebel,  et al. v. PIP/USA,
Inc.,  Case  No.  03CH07239  amended  her  class  action  complaint  to  include
plaintiffs  from  the  other  four  cases,  and  each  of the  others  has  been
voluntarily dismissed.

The consolidated amended 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 third-party
beneficiary status. Unspecified monetary damages, exemplary damages and
attorneys fees and costs are sought. A motion seeking to dismiss all counts but
the third-party beneficiary claim has been filed and a ruling is expected soon.
Our U.S. distributor has tendered this case to PIP, for defense and indemnity
pursuant to the distributor agreement.


                                      -F8-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004

NOTE 7 - LEGAL CONTINGENCIES (continued)

Salinas I. Landers, et al. v. Poly Implants Protheses, S.A., et al., Case No. CV
030377 was filed in June 2003 in the Superior Court of San Luis Obispo County,
California. Plaintiffs purport to sue on behalf of themselves and an alleged
class of persons allegedly similarly situated for unspecific monetary damages,
exemplary damages, attorneys' fees and costs and injunctive relief for alleged
breach of express warranty and alleged violations of California's Song-Beverly
Consumer Warranty Act and Unfair Competition Law. Our distributor filed a
demurrer to the action, which was denied by the Court. Our distributor has now
filed an answer to the complaint. PIP has also filed an answer to the complaint,
and written discovery is in the initial stages. A case management hearing
occurred on May 5, 2004, at which time the court scheduled a date to hear
arguments for and against class certification. Our distributor has tendered this
case to Poly Implant Prostheses, S.A., 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
purport to sue on behalf of themselves and an alleged class of persons allegedly
similarly situated for alleged 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 with respect to implant products. 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 no hearing has been held, or order entered, concerning class
certification. Our distributor has filed motions seeking to dismiss certain
claims in a summary judgment proceeding. The court has scheduled a pretrial
conference to be held in June 2004, and has specified that a trial date will be
set shortly thereafter. PIP.America has tendered this case to Poly Implant
Prostheses, S.A., for defense and indemnity.

Though it is not yet possible to predict the outcome of any of the cases
described above, the Company and its subsidiaries, as applicable, have denied
plaintiffs' allegations and are vigorously defending themselves upon the merits
of each lawsuit and against certification of any class. All three purported
class action cases above include two distinctly different types of claims. The
first of these arise from products sold by PIP/USA, Inc. This company sold
implants manufactured by Poly Implants Protheses, S.A. prior to PIP.America's
entry into the U.S. market, which occurred in late 1999. The next claims arise
from products sold by PIP.America and warranted by PIP.America. With respect to
claims arising from products sold by PIP.America, PIP.America is administering
and fulfilling its obligations to its customers in the ordinary course of
business, and for which it has taken appropriate reserves.

Other than certain of its own warranty 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 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
$540,000 at June 30, 2004 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 warranty 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

                                      -F9-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004

NOTE 7 - LEGAL CONTINGENCIES (continued)

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 - GOING CONCERN CONSIDERATIONS

As reflected in the accompanying consolidated financial statements, the Company
has an accumulated deficit of approximately $4.9 million. The ability of the
Company to continue as a going concern is dependent on achieving profitable
operations, its ability to generate positive cash flows from operations, and the
obtaining of additional equity and/or debt financing to pay off outstanding debt
obligations. There can be no assurance that the Company's efforts will be
successful. The consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
No estimate has been made should management's plan be unsuccessful.

NOTE 9 - LINES OF CREDIT

The Company entered into lines of credit agreements with two financial
institutions up to the aggregate amount of approximately $1,430,000. The Company
has used approximately $940,000 under such lines of credit at September 30,
2004. The lines of credit bear interest at the EURIBOR rate plus 0.50% per annum
(2.516% at September 30, 2004). The outstanding principal balance plus any
interest is payable on demand and is secured by accounts receivables of
approximately $600,000, inventories of approximately $1.1 million, and a
personal guarantee of the Company's Chief Executive Officer of approximately
$240,000.


NOTE 10- DUE TO SHAREHOLDER

One of the Company's shareholder advanced approximately $160,000 to the Company
during the three-month period ended September 30, 2004. This shareholder had
previously advanced to the Company approximately $610,000 prior to July 1, 2004.
The shareholder contributed these advances of approximately $770,000 as an
infusion of capital in one of the Company's subsidiaries during the three-month
period ended September 30, 2004. This capital infusion is accounted for as
minority interest in the accompanying balance sheet.

                                      -F10-

<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 have introduced a new
product  line of breast  implants  which is based on titanium  coating.  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.

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 on Form 10-KSB for the fiscal year ended
June 30, 2004, including without limitation the information set forth under the
heading "Critical Accounting Policies and Estimates".

RESULTS OF OPERATIONS

          CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                                                                  Increase/       Increase/
                                           For the Three-Month Period Ended      (Decrease)      (Decrease)
                                                   September 30,                 2004 vs 2003    2004 vs 2003
                                       ------------------------------------------
                                              2004                   2003               $              %
                                       -------------------     -------------------------------------------------

<S>                                    <C>                     <C>                <C>                     <C>
Revenues                               $        2,883,722      $       2,608,603  $      275,119          10.5%

Cost of revenues                                1,271,418              1,602,937        (331,519)        -20.7%
                                       -------------------     -------------------------------------------------

     Gross margin                               1,612,304              1,005,666         606,638          60.3%
                                       -------------------     -------------------------------------------------

Operating expenses:
  Selling, general and administrative           1,022,402                966,225          56,177           5.8%
  Research and development                        272,400                324,492         (52,092)        -16.1%
                                       -------------------     -------------------------------------------------

     Total operating expenses                   1,294,802              1,290,717           4,085           0.3%
                                       -------------------     -------------------------------------------------

Loss before other expenses and
     income taxes                                 317,502               (285,051)        602,553        -211.4%
                                       -------------------     -------------------------------------------------

Other expenses:
  Other expense                                    12,292                      -          12,292           NM
  Loss in equity investment                         6,385                      -           6,385           NM
  Interest expense                               (157,382)               (33,296)       (124,086)        372.7%
                                       -------------------     -------------------------------------------------

     Total other expenses                        (138,705)               (33,296)       (105,409)        316.6%
                                       -------------------     -------------------------------------------------

Income (loss) before (provision for)
    benefit from income taxes                     178,797               (318,347)        497,144        -156.2%

  (Provision for) benefit from income
   taxes                                                -                (34,833)         34,833        -100.0%
                                       -------------------     -------------------------------------------------

 Income (loss) before minority interest           178,797               (353,180)        531,977        -150.6%

Minority interest                                  (9,143)                     -          (9,143)          NM
                                       -------------------     -------------------------------------------------

Net income (loss)                      $          169,654      $        (353,180) $      522,834        -148.0%
                                       ===================     =================================================

NM: not meaningful
</TABLE>


Three Months Ended September 30, 2004 Compared with Three Months Ended September
30, 2003

   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, 2004 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.

   Cost of Revenues

Cost of revenues  consists  primarily  of materials  and direct  labor  expenses
associated  with the  production  of breast  implants.  Costs of revenues,  as a
percentage of revenues,  decreased during the three-month period ended September
30, 2004 by 17% to 44%, when compared to the prior year period.  The decrease of
cost of  revenues as a  percentage  of  revenues  is  primarily  due to improved
productivity from direct labor.

   Gross Profit

Gross profit increased during the three-month period ended September 30, 2004 by
approximately  $600,000 when compared to the prior year period.  The increase is
primarily  attributable  to increased sales of breast implants as well as higher
productivity from direct labor.

   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 and professional fees. The increase in selling,
general and administrative expenses during the three-month period ended
September 30, 2004 when compared to the prior year period is primarily due to
increased professional fees required to comply with requirements associated with
being a publicly-traded company and increased personnel costs associated with
the growth in the scope of operations.

                                       4

<PAGE>

   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 decrease in research and development
expenses during the three-month period ended September 30, 2004 when compared to
the prior year period is primarily due to research and developments costs
associated with the Company's efforts in entering the Australian market which
occurred during the three-month period ended September 30, 2003 and were
substantially completed during fiscal 2004.

   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 increase in interest expense
during the three-month period ended September 30, 2004 when compared to the
prior year period is primarily due to the amortization of debt discount
associated with the issuance of convertible debentures issued in October 2003
and April 2004.

   Provision for Income Tax

The provision for income tax consists of a valuation allowance for deferred tax
assets. We have not recognized income tax benefits during the three-month period
ended September 30, 2004 and will continue to provide for valuation allowances
for our deferred tax assets until we believe that it is more likely than not
that we will realize such benefits.

Liquidity and Capital Resources

During the three-month period ended September 30, 2004, we have generated cash
flows from operating activities of approximately $650,000, most of which
resulted from a decrease in our accounts receivables of approximately $700,000
due to better collection efforts. Additionally, we have incurred approximately
$125,000 in capital expenditures. We have also increased our working capital by
receiving approximately $160,000 from Milo Finance SA, one of our shareholders,
and have received proceeds from long-term debt of approximately $140,000.

During fiscal year 2003, we used approximately $80,000 in our operating
activities, mostly from incurring a loss of approximately $350,000 and an
increase in our accounts receivable and inventories of approximately $230,000
and $260,000, respectively, which was partially funded by an increase in our
accounts payable of approximately $550,000. Our operating and investing
activities were partially funded by an increase in our line of credit of
approximately $170.000.

Going Concern

As reflected in the accompanying consolidated financial statements as of
September 30, 2004, we had an accumulated deficit of approximately $5.1 million.
Our ability to continue as a going concern is dependent on our ability to
achieve profitable operations, positive cash flows from operations, and
additional equity and/or debt financing to pay off outstanding debt obligations
and unpaid payroll taxes. Management has reduced the number of employees in its
French operation during fiscal 2004. Additionally, the Company is considering
completing other financing transactions in the future, depending on its needs
and market conditions. Furthermore, the Company intends to resume its U.S.
marketing operations upon approval from the FDA.

                                       5

<PAGE>

New Accounting Pronouncements

We do not believe that recently issued, but not yet effective accounting
pronouncements if currently adopted would have a material effect on our
financial statements.

Certain risk factors which may impact our business, results of operations and
financial condition

IF WE ARE UNABLE TO AVOID SIGNIFICANT PRODUCT LIABILITY CLAIMS OR PRODUCT
RECALLS, WE MAY BE FORCED TO PAY SUBSTANTIAL DAMAGE AWARDS AND OTHER EXPENSES
THAT COULD EXCEED OUR ACCRUALS AND INSURANCE COVERAGE.

We conduct our product development, manufacturing, marketing, service and
support activities with careful regard for the consequences to patients. As with
any body support manufacturer, however, we are often exposed to product
liability claims and product recalls, some of which may have a negative impact
on our business. To incur the substantial costs and expenses as a result of such
claims and recalls, we maintain product liability insurance policies that
collectively carry a policy limit of $1 million worldwide except in the United
States and Canada and reserves that amounted to $540,000 at September 30, 2004.
At present, we have no third-party liability insurance in the U.S. and Canada
and no risk-shifting liability insurance to protect us from the costs of claims
for damages due to the use or recall of our products under certain circumstances
and for specific amounts. If a product liability claim or class action suit is
brought against us for uninsured liabilities in excess of our insurance coverage
and reserves, our business will likely suffer. Other breast implant
manufacturers that suffered such claims in the past have been forced to cease
operations or even to declare bankruptcy. In addition to product liability
claims, we may in the future need to recall or issue field corrections related
to our products due to manufacturing or design deficiencies, labeling errors, or
other safety or regulatory reasons. This recall of products may expose us to
additional product liability claims.

THE SUCCESS OF OUR BUSINESS IS SUBSTANTIALLY DEPENDENT ON THE SALES OF BREAST
IMPLANTS

We anticipate that sales of breast implants will continue to play a significant
role in our revenues for the foreseeable future. Declines in demand of our
breast implants could occur as a result of changes in government regulations;
new competitive product release and enhancements to existing products; price
competition; technological changes and the inability to maintain our technology
relationships; and negative publicity that our products are unsafe. In addition,
because the majority of breast augmentation and reconstruction are elective
procedures, they are not typically covered by insurance. As a result, adverse
changes in the economy may cause consumers to reassess their spending choices
and reduce the demand for cosmetic surgery. If our customers do not continue to
purchase our breast implants as a result of these and other factors, our
revenues, results of operations, and cash flows from operations would be
adversely affected.

IF WE ARE UNABLE TO CONTINUE TO DEVELOP AND MARKET NEW PRODUCTS AND
TECHNOLOGIES, WE MAY EXPERIENCE A DECREASE IN DEMAND FOR OUR PRODUCTS OR OUR
PRODUCTS COULD BECOME OBSOLETE.

The body support industry is highly competitive and is subject to significant
and rapid technological change. We believe that our ability to respond quickly
to consumer needs or advances in medical technologies, without compromising
product quality, is crucial to our success. We are continually engaged in
product development and improvement programs to maintain and improve our
competitive position. We cannot, however, guarantee that we will be successful
in enhancing existing products or developing new products or technologies that
will timely achieve regulatory approval.

There is also a risk that our products may not gain market acceptance among
physicians, patients and the medical community generally. The degree of market
acceptance of any medical device or other product that we develop will depend on
a number of factors, including demonstrated clinical efficacy and safety,
cost-effectiveness, potential advantages over alternative products, and our
marketing and distribution capabilities. Physicians will not recommend our

                                       6

<PAGE>

products until clinical data or other factors demonstrate their safety and
efficacy compared to other competing products. Even if the clinical safety and
efficacy of using our products is established, physicians may elect not to
recommend using them for any number of other reasons, including whether our
products best meet the perceived particular needs of the individual patient.

Our products compete with a number of other products manufactured by major
medical device companies, and may also compete with new products currently under
development by others. If our new products do not achieve significant market
acceptance, or if our current products are not able to continue competing
successfully in the changing market, our revenues, income from operations and
cash flows from operations may not grow as much as expected or may even decline.

IF CLINICAL TRIALS FOR OUR PRODUCTS ARE UNSUCCESSFUL OR DELAYED, WE WILL BE
UNABLE TO MEET OUR ANTICIPATED DEVELOPMENT AND COMMERCIALIZATION TIMELINES, AND
OUR BUSINESS PROSPECTS WILL SUFFER.

Before obtaining regulatory approvals for the commercial sale of any products,
we must demonstrate through pre-clinical testing and clinical trials that our
products are safe and effective for use in humans. Conducting clinical trials is
a lengthy, time-consuming and expensive process. Completion of clinical trials
may take several years or more. Our commencement and rate of completion of
clinical trials may be delayed by many factors, including:

         o lack of efficacy during the clinical trials;
         o unforeseen safety issues;
         o slower than expected patient recruitment for clinical trials;
         o inability to follow patients after treatment in clinical trials;
         o inconsistencies between early clinical trial results and results
           obtained in later clinical trials; and
         o varying interpretations of data generated by clinical trials.

The results from pre-clinical testing and early clinical trials are often not
predictive of results obtained in later clinical trials. A number of new
products have shown promising results in clinical trials, but subsequently
failed to establish sufficient safety and efficacy data to obtain necessary
regulatory approvals. Data obtained from pre-clinical and clinical activities
are susceptible to varying interpretations, which may delay, limit or prevent
regulatory approval. Any delays in, or termination of, our clinical trials will
materially and adversely affect our development and commercialization timelines,
increase our development costs and harm our financial results and commercial
prospects.

WE ARE SUBJECT TO SUBSTANTIAL GOVERNMENT REGULATION, WHICH COULD MATERIALLY
ADVERSELY AFFECT OUR BUSINESS.

The  production  and  marketing  of our  products  and our ongoing  research and
development,  pre-clinical  testing and clinical trial activities are subject to
extensive regulation and review by numerous governmental authorities both in the
U.S.  and abroad.  Most of the  products we develop  must  undergo an  extensive
regulatory  approval process before they can be marketed.  This process makes it
longer,  harder and more costly to bring our  products to market,  and we cannot
guarantee  that any of our products  will be approved,  or, once  approved,  not
recalled.  The  pre-marketing  approval  process can be particularly  expensive,
uncertain  and lengthy,  and a number of devices for which FDA approval has been
sought by other companies have never been approved for marketing. In addition to
these  approval  procedures,   extensive   regulations  also  govern  marketing,
manufacturing,  distribution,  labeling, and record-keeping procedures. If we do
not comply with applicable regulatory requirements, such violations could result
in warning letters,  non-approval,  suspensions of regulatory  approvals,  civil
penalties  and  criminal  fines,   product   seizures  and  recalls,   operating
restrictions, injunctions, and criminal prosecution.

                                       7

<PAGE>

Delays in or rejection of any government entity, including the FDA, of our new
products may also adversely affect our business. Such delays or rejection may be
encountered due to, among other reasons, government or regulatory changes in
policy during the period of product development in each jurisdiction. For
example, in the U.S., there has been a continuing trend of more stringent FDA
oversight in product clearance and enforcement activities, causing medical
device manufacturers to experience longer approval cycles, more uncertainty,
greater risk, and higher expenses. Internationally, there is a risk that we may
not be successful in meeting the quality standards or other certification
requirements. Even if regulatory approval of a product is granted, this approval
may entail limitations on uses for which the product may be labeled and
promoted. It is possible, for example, that we may not receive proper local
regulatory approval to market our current products for broader or different
applications or to market updated products that represent extensions of our
basic technology. In addition, we may not receive French export approval to
export our products in the future, and countries to which products are to be
exported may not approve them for import.

Our manufacturing facilities are also subject to continual governmental review
and inspection. French regulations related to manufacturing are increasingly
complex and subject to frequent scrutiny. A governmental authority may challenge
our compliance with applicable national, regional, local, and foreign
regulations. In addition, any discovery of previously unknown problems with one
of our products or facilities may result in restrictions on the product or the
facility, including withdrawal of the product from the market or other
enforcement actions.

From time to time, regulatory proposals are introduced that could alter the
review and approval process relating to medical devices. It is possible that the
FDA or other governmental authorities will issue additional regulations further
restricting the sale of our present or proposed products. Any change in
regulations that govern the review and approval process relating to our current
and future products could make it more difficult and costly to obtain approval
for new products, or to produce, market, and distribute existing products.

Our products compete with a number of other medical products manufactured by
major companies, and may also compete with new products currently under
development by others. On January 8, 2004 the FDA released new Draft Guidance
for Saline, Silicone Gel, and Alternative Breast Implants. This new guidance has
additional requirements from the FDA's prior guidance dated February 2003. We
intend to complete our application to the FDA for the pre-market approval of our
saline-filled implants for breast augmentation, reconstruction and revision
during fiscal 2005, using this new guidance. Any additional changes in FDA
guidance may further delay or may otherwise adversely affect our application or
our review or approval by the FDA. A delay, denial, or "not approvable" response
by the FDA would have a material adverse affect on our commercialization
timelines and competitive position. If our competitors gain regulatory approvals
before us in the U.S. or in any other geographical locations, our revenues,
income from operations and cash flows from operations, may not grow as
anticipated and may even decline.

HEALTHCARE REFORM LEGISLATION COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS.

If any national healthcare reform or other legislation or regulations are passed
that imposes limits on the number or type of medical procedures that may be
performed or that has the effect of restricting a physician's ability to select
specific products for use in patient procedures, such changes could have a
material adverse effect on the demand for our products. In the U.S., there have
been, and we expect that there will continue to be, a number of federal and
state legislative and regulatory proposals to implement greater governmental
control over the healthcare industry. These proposals create uncertainty as to
our ability to obtain the regulatory authority approvals required for us to sell
our products in the largest market. In a number of foreign markets, the pricing
and profitability of healthcare products are subject to governmental influence
or control. In addition, legislation or regulations that impose restrictions on
the price that may be charged for healthcare products or medical devices may
adversely affect our revenues, income from operations and cash flows from
operations.

IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS RELATED
TO OUR PRODUCTS OR TECHNOLOGIES, OR WE INFRINGE UPON THE INTELLECTUAL PROPERTY
RIGHTS OF OTHERS, WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE
OUR PRODUCTS AND MAINTAIN PROFITABILITY.

                                       8

<PAGE>

Our success depends in part on our ability to obtain patents or rights to
patents, protect trade secrets, operate without infringing upon the proprietary
rights of others, and prevent others from infringing on our patents, trademarks
and other intellectual property rights. We will be able to protect our
intellectual property from unauthorized use by third parties only to the extent
that it is covered by valid and enforceable patents, trademarks and licenses.
Patent protection generally involves complex legal and factual questions and,
therefore, enforceability of patent rights cannot be predicted with certainty.
Patents, if issued, may be challenged, invalidated or circumvented. Thus, any
patents that we own or license from others may not provide adequate protection
against competitors and further, our technologies may infringe on the patents of
third parties. Moreover, the laws of certain foreign countries do not protect
our intellectual property rights to the same extent as do the laws of the U.S.
or the European Community. In the event of an infringement or violation, we may
face litigation, become subject to damages, and may be prevented from selling
existing products and pursuing product development or commercialization.

In addition to patents and trademarks, we rely on trade secrets and proprietary
know-how. We seek protection of these rights, in part, through confidentiality
and proprietary information agreements. These agreements may not provide
meaningful protection or adequate remedies for violation of our rights in the
event of unauthorized use or disclosure of confidential and proprietary
information. Failure to protect our proprietary rights could seriously impair
our competitive position.

IF OUR COLLABORATIVE PARTNERS DO NOT PERFORM, WE WILL BE UNABLE TO DEVELOP AND
MARKET PRODUCTS AS ANTICIPATED.

We have entered into collaborative  arrangements with third parties, such as GFE
to develop  certain  products and Medicor to market breast  implants.  We cannot
assure  you that  these  collaborations  will  produce  successful  products  or
marketing   efforts.   If  we  fail  to  maintain  our  existing   collaborative
arrangements or fail to enter into additional  collaborative  arrangements,  the
number of products and markets from which we could receive future revenues would
decline.

Our dependence on collaborative arrangements with third parties subjects us to a
number of risks. These collaborative arrangements may not be on terms favorable
to us. Agreements with collaborative partners typically allow partners
significant discretion in electing whether or not to pursue any of the planned
activities. We cannot control the amount and timing of resources our
collaborative partners may devote to products based on the collaboration, and
our partners may choose to pursue alternative products. Our partners may not
perform their obligations as expected. Business combinations, significant
changes in a collaborative partner's business strategy, or its access to
financial resources may adversely affect a partner's willingness or ability to
complete its obligations under the arrangement. Moreover, we could become
involved in disputes with our partners, which could lead to delays or
termination of the collaborations and time-consuming and expensive litigation or
arbitration. Even if we fulfill our obligations under a collaborative agreement,
our partner can terminate the agreement under certain circumstances. If any
collaborative partner were to terminate or breach our agreement with it, or
otherwise fail to complete its obligations in a timely manner, our chances of
successfully commercializing products would be materially and adversely
affected.

WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS FOR CERTAIN PRODUCTS AND RAW
MATERIALS AND THE LOSS OF ANY SUPPLIER COULD ADVERSELY AFFECT OUR ABILITY TO
MANUFACTURE MANY OF OUR PRODUCTS.

We  currently  rely on a single  supplier  for  titanium-based  coating  for our
products,  used primarily in the  manufacturing of breast  implants.  We rely on
this  supplier to provide us with such coating on our  products.  Our  agreement
terminates in 2009. If we cannot maintain the  relationship  with this supplier,
we may have to discontinue the manufacturing of certain  products.  Furthermore,
we would have to substitute the raw materials  currently utilized by alternative
raw materials  which may be of lesser quality and provided at higher cost to us.
The  termination of this  relationship  or any disruption in the supply of these
materials  could have a material  adverse  effect on our  revenues,  income from
operations and cash flows from operations.

                                       9

<PAGE>

OUR INTERNATIONAL BUSINESS EXPOSES US TO A NUMBER OF RISKS.

We conduct all our marketing, manufacturing, and research and development
outside of the U.S. More than 68.4% of our sales are derived from international
operations outside of France, where our main operations are conducted.
Accordingly, any material decrease in foreign sales would have a material
adverse effect on our overall sales and profitability. Most of our international
sales are denominated in Euros. Depreciation or devaluation of the local
currencies of countries where we sell our products may result in our products
becoming more expensive in local currency terms, thus reducing demand.
Furthermore, all our operating activities are located outside of the U.S.
Therefore, substantially all of our operating expenses are denominated in
currencies other than the U.S. dollar. We cannot guarantee that we will not
experience unfavorable currency fluctuation effects in future periods, which
could have an adverse effect on our operating results. Our operations and
financial results also may be significantly affected by other international
factors, including:

         o foreign government regulation of body support products;
         o product liability, intellectual property and other claims;
         o new export license requirements;
         o political or economic instability in our target markets;
         o trade restrictions;
         o changes in tax laws and tariffs;
         o inadequate protection of intellectual property rights in some
           countries;
         o managing foreign distributors and staffing;
         o managing foreign subsidiaries; and
         o competition.

If these risks actually materialize, our revenues, results of operations and
cash flows from operations may decrease.

WE RELY ON INDIRECT DISTRIBUTION CHANNELS AND MAJOR DISTRIBUTORS THAT WE DO NOT
CONTROL.

We rely  significantly on independent  distributors to market and distribute our
products. We do not control our distributors. Additionally, our distributors are
not  obligated  to buy our  products  and could also  represent  other  lines of
products.  Some of our  distributors  maintain  inventories  of our products for
resale to physicians.  If  distributors  reduce their inventory of our products,
our  business  could  be  adversely   affected.   Further,   we  could  maintain
individually significant accounts receivable balances with certain distributors.
The financial  condition of our distributors  could deteriorate and distributors
could  significantly  delay  or  default  on  their  payment  obligations.   Any
significant  delays or  defaults  could  have a material  adverse  effect on our
revenues, income from operations and cash flows from operations.

IF OUR USE OF HAZARDOUS MATERIALS RESULTS IN CONTAMINATION OR INJURY, WE COULD
SUFFER SIGNIFICANT FINANCIAL LOSS.

Our  manufacturing  and  research  activities  involve  the  controlled  use  of
hazardous materials. We cannot eliminate the risk of accidental contamination or
injury  from  these  materials.  In the event of an  accident  or  environmental
discharge, we may be held liable for any resulting damages, which may exceed our
financial  resources.  We  currently  do not carry  insurance  specifically  for
hazardous  material  claims.  We may be required to incur  significant  costs to
comply with  environmental  laws and regulations,  which may change from time to
time. To date, we have not been the subject of any  environmental  investigation
by governmental authorities.

OUR STOCK PRICE HAS BEEN VOLATILE AND OUR TRADING VOLUME HAS HISTORICALLY BEEN
LOWER THAN THAT OF MANY PUBLICLY-TRADED COMPANIES.

Historically, the market price of our common stock has from time to time
experienced price fluctuations, some of which are unrelated to our operating
performance and beyond our control. These factors include:

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         o availability of shares offered for sale;
         o quarter-to-quarter variations in our operating results;
         o the results of testing, technological innovations, or new commercial
           products by us or our competitors;
         o governmental actions, regulations, rules, and orders;
         o general conditions in the healthcare, medical device, or plastic
           surgery industries;
         o changes in earnings estimates by securities analysts;
         o developments and litigation concerning patents or other intellectual
           property rights;
         o litigation or public concern about the safety of our products; and
         o general economic factors, such as foreign exchanges rates.

Historically,  our common  stock has also had a low trading  volume,  and likely
will continue to have a low trading  volume in the future.  We cannot  guarantee
that an active public market for our common stock will develop and be sustained.
Additionally,  we have not always timely filed our quarterly and annual reports,
which  resulted in our common stock being  temporarily  delisted from trading on
the  Over-The-Counter  Bulletin Board interruptions in the trading of our stock.
This low volume may  contribute  to the  volatility  of the market  price of our
common  stock.  It is likely  that the  market  price of our  common  stock will
continue to fluctuate significantly in the future.

OUR REPORTED EARNINGS PER SHARE MAY BE MORE VOLATILE BECAUSE OF THE CONTINGENT
CONVERSION PROVISION OF OUR DEBENTURES.

Holders of our 1% and 10% convertible debentures are entitled to convert the
notes into our common stock during any fiscal quarter prior to October 9, 2008
and March 25, 2009, respectively. In addition, certain holders are entitled to
anti-dilution protection. Until the notes are converted, the shares underlying
the notes are not included in the calculation of our basic or diluted earnings
per share. Should a contingency be met, diluted earnings per share would be
expected to decrease as a result of the inclusion of the underlying shares in
the diluted earnings per share calculation. Additionally, the per share
conversion price for the convertible debentures are based on the lesser of a
fixed price percentage of the average of our lowest closing prices for certain
periods. Thus, volatility, low volume of trades and lower stock prices could
cause further dilution to our existing and future shareholders.

FUTURE CHANGES IN FINANCIAL ACCOUNTING STANDARDS MAY CAUSE ADVERSE UNEXPECTED
REVENUE OR EXPENSE FLUCTUATIONS AND AFFECT OUR REPORTED RESULTS OF OPERATIONS.

A change in accounting standards could have a significant effect on our reported
results and may even affect our reporting of transactions  completed  before the
change is effective.  Any changes requiring that we record compensation  expense
in the  statement of operations  for employee  stock options as an example using
the fair value method could have a significant  negative  effect on our reported
results.  New pronouncements and varying  interpretations of pronouncements have
occurred  and  may  occur  in the  future.  Changes  to  existing  rules  or the
questioning  of current  practices may adversely  affect our reported  financial
results and the manner in which we conduct our business.

IF WE DETERMINE  THAT ANY OF OUR GOODWILL OR INTANGIBLE  ASSETS IS IMPAIRED,  WE
WOULD BE REQUIRED TO A CHARGE TO EARNINGS,  WHICH COULD HAVE A MATERIAL  ADVERSE
EFFECT ON OUR RESULTS OF OPERATIONS.

We have a significant amount of goodwill and other intangible assets,  primarily
as a result of the acquisition of our Spain operations. In July 2001, we adopted
SFAS No. 141,  Business  Combinations,  and in January 2002, we adopted SFAS No.
142,  Goodwill and Other Intangible  Assets.  As a result, we no longer amortize
goodwill and  intangible  assets that are deemed to have  indefinite  lives.  We
periodically evaluate our intangible assets, for impairment. As of September 30,
2004,  we had  approximately  $1 million of goodwill.  We review for  impairment
annually,  or sooner if events or changes  in  circumstances  indicate  that the

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<PAGE>

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. 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.

IF WE FAIL TO MANAGE OUR OPERATIONS OR FAIL TO CONTINUE TO  EFFECTIVELY  CONTROL
EXPENSES, OUR REVENUES, RESUTS OF OPERATIONS AND CASH FLOW FROM OPERATIONS COULD
DECREASE.

The scope of our operations, the number of our employees and the geographic area
of our operations have varied and may grow rapidly.  In addition,  we acquired a
company  in  Spain  in  2002.  This  growth  and the  assimilation  of  acquired
operations and their employees  could continue to place a significant  strain on
our managerial,  operational and financial  resources.  To manage our growth, if
any,  effectively,  we need to continue  to  implement  and  improve  additional
management and financial systems and controls.  We may not be able to manage the
current scope of our operations or future growth  effectively  and still exploit
market  opportunities for our products in a timely and  cost-effective  way. Our
future operating results could also depend on our ability to manage an expanding
product line, marketing and sales.

WE COULD CHANGE OUR MARKETING PROGRAMS, WHICH COULD NEGATIVELY IMPACT THE TIMING
OF OUR RECOGNITION OF REVENUES.

We continually  re-evaluate our marketing  programs,  including specific pricing
models,  delivery methods,  and terms and conditions,  to effectively market our
current  and future  products  and  services.  We may  implement  new  marketing
programs,  including  offering  specified and  unspecified  enhancements  to our
current and future  products.  Such changes  could result in deferring  revenues
over a future  period as opposed to upon the initial  shipment  of the  product.
Changes  to our  marketing  programs,  including  the  timing of the  release of
enhancements,  discounts  and other  factors,  could  impact  the  timing of the
recognition of revenue for our products and could adversely affect our operating
results and financial condition.

IF WE LOSE KEY PERSONNEL, CANNOT INTEGRATE NEWLY HIRED PERSONNEL, OR CANNOT HIRE
ENOUGH QUALIFIED EMPLOYEES, OUR ABILITY TO MANAGE OUR BUSINESS COULD BE
ADVERSELY AFFECTED.

Our  success  depends,  in large  part,  upon the  services  of a number  of key
employees,  such as Jean-Claude  Mas and our Chief  Executive  Officer and Chief
Financial  Officer,  Mr.  Sereyjol-Garros  and  Mr.  Couty,  respectively.   The
effective  management of our growth,  if any, depends upon our ability to retain
highly skilled technical,  managerial, finance and marketing personnel. The loss
of the  services  of key  personnel  might  significantly  delay or prevent  the
achievement of our development and strategic objectives.  We do not maintain key
person life  insurance  on any of our  employees,  and none of our  employees is
under any obligation to continue providing services to us.

We must  continue to attract key  personnel  to develop  new  products,  product
enhancements and  technologies.  Competition for highly skilled employees in our
industry  is high,  and we  cannot  be  certain  that we will be  successful  in
recruiting or retaining such personnel. We also believe that our success depends
to a  significant  extent  on  the  ability  of our  key  personnel  to  operate
effectively,  both  individually  and as a group.  If we are unable to identify,
hire and  integrate  new employees in a timely and  cost-effective  manner,  our
ability to develop  future  enhancements  and features to our existing or future
products as well as expand to new markets  could be  delayed.  Any delays  could
have a  material  adverse  effect on our  business,  results of  operations  and
financial condition.

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<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of significant accounting policies is included in Note 4 to the
audited consolidated financial statements included in our filing on Form 10-KSB
as filed with the Securities and Exchange Commission for the year ended June 30,
2004. 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.

There have been no material changes in the critical accounting policies that are
set forth in Management's Discussion and Analysis of Financial Condition or Plan
of Operation included in Item 6 of the Company's 2004 Form 10-KSB.


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

There has been no material developments on the legal matters disclosed on the
Company's Form 10-KSB for the year ended June 30, 2004.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

On October 9, 2003, OS MXM, Inc. ("OS") entered into a convertible debenture
purchase agreement (the "Agreement") with HEM Mutual Assurance, LLC ("HEM"),
pursuant to which OS issued to HEM three 1% convertible debentures due on
October 9, 2008 totaling $1,000,000 in the aggregate principal amount. On the
same day, the Company merged with OS and assumed all the obligations and
responsibilities of OS under the Agreement and the debentures. On the advice of
prior legal counsel that these transactions complied with Rule 504 of Regulation
D promulgated under the Securities Act of 1933 ( the "Securities Act"),
10,000,000 unrestricted, free-trading shares of the Company's common stock were
placed in escrow to be released upon appropriate conversion notices from HEM.
Although the Company does not believe that the transactions complied with Rule
504 of Regulation D promulgated under the Securities Act, the issuance of the
debentures and the conversion of all or a portion thereof into the Company's
common stock would comply with Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder as long as the shares of the Company's
common stock issued to HEM are restricted. Accordingly, the Company has notified
the escrow agent and HEM of its objection to the issuance of free-trading shares
to HEM. In response to the Company's objection, the Company was advised on
November 4, 2004 by legal counsel to the escrow agent that the escrow agent will
release 50,526 shares held in escrow to HEM pursuant to HEM's conversion notice
dated October 27, 2004 relating to $15,000 of principal and accrued interest of
one of the debentures. The Company has requested legal counsel of the escrow
agent whether any unrestricted, free-trading shares has been released from
escrow. The escrow agent's legal counsel has not responded to this request.

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<PAGE>

ITEM 6.     EXHIBITS

              (a)  Exhibits

        Exhibit No.            Description
        2.1                    Agreement and Plan of Reorganization between
                               Heritage Productions, Inc. and Heritage
                               Worldwide, Inc. dated May 18, 2001.  Filed with
                               the SEC as Exhibit C to the Company's Definitive
                               Information Statement on Schedule 14C on June 21,
                               2001 and incorporated herein by reference.
        2.2                    Acquisition Agreement between Heritage Worldwide,
                               Inc., Poly Implants Protheses, S.A. and Milo
                               Finance, S.A. dated February 28, 2003.  Filed
                               with the SEC as Exhibit 2.1 to the Company's
                               Current Report on Form 8-K on March 13, 2003 and
                               incorporated herein by reference.
        2.3                    Agreement and Plan of Merger dated as of October
                               9, 2003 between Heritage Worldwide, Inc., PIP
                               Acquisition II, Inc. and OS MXM, Inc.  Filed with
                               the SEC as Exhibit 2.3 to the Company's Annual
                               Report on Form 10-KSB on November 12, 2003 and
                               incorporated herein by reference.
        3.1                    Certificate of Incorporation of the Company.
                               Filed with the SEC as Exhibit A to the Company's
                               Definitive Information Statement on Schedule 14C
                               on June 21, 2001 and incorporated herein by
                               reference.
        3.2                    By-Laws of the Company, as amended.  Filed with
                               the SEC as Exhibit B to the Company's Definitive
                               Information Statement on Schedule 14C on June 21,
                               2001 and incorporated herein by reference.
        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.

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<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.

                                            By: /s/   Alain Sereyjol-Garros
                                                -----------------------------
                                                      Alain Sereyjol-Garros
                                                      Chief Executive Officer



Signature                           Title                   Date
------------------------------      -----------------       --------------------

/s/   Alain Sereyjol-Garros          Chief Executive        November 16, 2004
------------------------------       Officer
      Alain Sereyjol-Garros


/s/ Claude Couty                     Chief Financial        November 16, 2004
------------------------------       Officer
    Claude Couty