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

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31,2007

                                       or

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

         For the transition period from ____________ to ________________

                       Commission file number: [000-28277]

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

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


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

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


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

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

The total  number  of shares of the  issuers'  common  stock,  $.001 par  value,
outstanding at May 10, 2007 was 17,410,299.

Transitional Small Business Disclosure Format: Yes [ ] No [X]


                                       1

<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 March 31,2007 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
our 2006 Annual Report of Form 10-KSB, 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.


                                       2
<PAGE>

                 HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2007
                                   (Unaudited)


                                     ASSETS
Current Assets:
  Cash                                                           $      283,045
  Accounts receivable, net of an allowance for
    doubtful accounts of $ 394,943
    and allowance for product returns of $99,835                      7,497,014
  Inventories                                                         4,541,387
  Prepaid expenses and other current assets                             718,208
                                                                  --------------

     Total current assets                                            13,039,654

Property and equipment, net of accumulated
   depreciation of $3,480,480                                         2,001,775
Goodwill                                                              1,166,116
Investment in SCI Lucas                                                 669,348
Other assets                                                             53,032
                                                                  --------------

     Total assets                                                $   16,929,925
                                                                  ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Lines of credit                                               $    1,889,431
  Accounts payable and accrued expenses                               4,694,589
  Current portion of capitalized lease obligations                      216,197
  Current portion of long term debt                                     249,875
  Reserve for product replacements                                      588,784
                                                                  --------------

     Total current liabilities                                        7,638,876

Convertible debentures, net of discount of $780,114                   2,219,886
Convertible debentures and related accrued interest payable,
  net of discount of $103,637-related party                             929,911
Capitalized lease obligations, net of current portion                   397,907
Long term debt, net of current portion                                  631,121
                                                                  --------------

     Total liabilities                                               11,817,701
                                                                  --------------

Minority interest                                                       955,851
                                                                  --------------

Stockholders' Equity:
  Common stock; $.001 par value, 50,000,000 shares authorized,
    18,160,299 issued and 17,410,299 outstanding                         17,411
  Additional paid-in capital                                          6,134,567
  Accumulated other comprehensive income                              2,341,870
  Accumulated deficit                                                (4,337,475)
                                                                  --------------

     Total stockholders' equity                                       4,156,373
                                                                  --------------

     Total liabilities and stockholders' equity                  $   16,929,925
                                                                  ==============


            See Notes to Unaudited Consolidated Financial Statements.



                                       3
<PAGE>

                   HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                         For the nine-month period ended For the three-month period ended
                                                      March 31,                    March 31,
                                         ------------------------------  ---------------------------
                                             2007            2006           2007           2006
                                         -------------  ---------------  -----------    ------------

<S>                                      <C>               <C>           <C>            <C>
Revenues                                 $ 10,958,343      $ 9,727,311   $3,188,873     $ 3,380,558

Cost of revenues                            5,277,126        4,172,055    1,767,474       1,531,988
                                         -------------  ---------------  -----------    ------------

     Gross profit                           5,681,217        5,555,256    1,421,399       1,848,570
                                         -------------  ---------------  -----------    ------------

Operating expenses:
  Selling, general and administrative       5,121,221        4,342,476    1,085,130       1,648,838
  Research and development                    919,017          780,249      199,114         258,637
                                         -------------  ---------------  -----------    ------------

     Total operating expenses               6,040,238        5,122,725    1,284,244       1,907,475
                                         -------------  ---------------  -----------    ------------

Operating (loss) income                      (359,021)         432,531      137,155         (58,905)
                                         -------------  ---------------  -----------    ------------

Other expenses:
  Gain in equity investment                    50,894           32,008       42,749          11,513
  Interest expense-related party             (147,700)        (155,600)     (61,432)        (75,400)
  Interest expense                           (274,464)        (323,534)     (88,201)        (81,112)
                                         -------------  ---------------  -----------    ------------

     Total other expenses                    (371,270)        (447,126)    (106,884)       (144,999)
                                         -------------  ---------------  -----------    ------------


(Loss) Income before minority interest       (730,291)         (14,595)      30,271        (203,904)

Minority interest                             (13,595)         (16,133)     (26,957)         14,428
                                         -------------  ---------------  -----------    ------------

Net (loss) income                            (743,886)         (30,728)       3,314        (189,476)

Other comprehensive income, net of taxes
  Foreign currency translation adjustment     509,889         (112,953)     117,998         247,268
                                         -------------  ---------------  -----------    ------------

     Comprehensive (loss) income         $   (233,997)     $  (143,681)  $  121,312     $    57,792
                                         =============  ===============  ===========    ============

Basic net loss per common share          $      (0.04)     $     (0.00)  $     0.00     $     (0.01)
                                         =============  ===============  ===========    ============

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

Diluted net (loss) income per share      $      (0.04)     $     (0.00)  $     0.00         $ (0.01)
                                         =============  ===============  ===========    ============

Diluted weighted average common shares     17,410,299       17,410,299   17,423,774      17,410,299
 outstanding
                                         =============  ===============  ===========    ============
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.

                                       4
<PAGE>


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

                                                     For the nine-month period
                                                          ended March 31,
                                                    --------------------------
                                                        2007           2006
                                                    -------------  -----------

Cash flows from operating activities:
Net income loss                                       $ (743,886)   $ (30,728)
Adjustments to reconcile net income loss to net cash
used in operating activities:
   Interest expense related to debenture discount        365,952      357,871
   Depreciation and amortization                         498,059      363,809
   Fair value of options                                 323,999       62,188
   Provision for doubtful accounts                       (91,743)    (335,595)
   Provision for returns                                (101,688)           -
   Gain on equity investment                             (50,894)     (32,008)
   Minority interest                                      13,595       16,133
Change in operating assets and liabilities:
   Accounts receivable                                   126,387      112,723
   Inventories                                          (483,443)    (559,875)
   Prepaid expenses and other current assets             (78,976)    (151,364)
  Other assets                                           194,963            -
   Provision for product replacements                     12,519     (126,081)
   Accrued interest on convertible debentures              4,987       91,990
   Accounts payable and accrued expenses                (763,921)     (67,170)
                                                    -------------  -----------

Net cash used in operating activities                   (774,090)    (298,107)
                                                    -------------  -----------

Cash flows from investing activity:

   Purchases of property and equipment                  (258,957)     (93,657)
                                                    -------------  -----------

Net cash used in investing activities                   (258,957)     (93,657)
                                                    -------------  -----------

Cash flows from financing activities:
   Increase in lines of credit                           735,488      102,682
   Proceeds from long term debt                          183,089      483,680
   Repayment of long term debt                          (254,135)    (127,978)
   Repayment of capitalized lease obligations            (70,076)           -
   Increase (decrease) in due to related parties          80,003      (51,649)
                                                    -------------  -----------

Net cash provided by financing activities                674,369      406,735
                                                    -------------  -----------

Effect of exchange rate changes on cash                  (53,786)       7,021
                                                    -------------  -----------

(Decrease) increase in cash                             (412,464)      21,992

Cash, beginning of period                                695,509      441,983
                                                    -------------  -----------

Cash, end of period                                   $  283,045    $ 463,975
                                                    =============  ===========

Supplemental disclosures of cash flow information:
     Cash paid during the period for interest         $   37,583    $ 102,019
                                                    =============  ===========

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

            See Notes to Unaudited Consolidated Financial Statements


                                       5
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (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 nine-months ended March 31, 2007 are not necessarily  indicative
of the results  that may be expected  for the fiscal year ending June 30,  2007.
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, 2006.

The  accompanying  consolidated  financial  statements  present  the  results of
operations of the Company's French ("PIP France"), Spanish ("PIP Spain"), and US
("OS")  subsidiaries for the three-month and nine-month  periods ended March 31,
2007 and 2006. All material  inter-company 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  38.05%.  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 inter-company accounts and transactions between the Company and SCI
Lucas have been eliminated.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

In preparing  financial  statements in  conformity  with  accounting  principles
generally  accepted  in the  United  States,  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 will differ from those estimates.  Significant estimates
during the periods  include the allowance for doubtful  accounts,  allowance for
product returns,  evaluation of obsolete inventory, the useful life of long-term
assets, such as property,  plant and equipment and goodwill,  and the accrual of
product replacement reserve.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original  maturities of
three months or less to be cash equivalents.

                                       6
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable

Accounts  receivable  are  reported  at net  realizable  value.  The Company has
established an allowance for doubtful accounts based upon factors  pertaining to
the credit risk of specific customers, historical trends, and other information.
Delinquent  accounts are written-off  when it is determined that the amounts are
uncollectible.  At March 31,  2007,  the  allowance  for  doubtful  accounts was
approximately $479,000.  Additionally,  the Company has established an allowance
for  product  returns  based  upon  factors  pertaining  to  historical  trends,
including,  among other  things,  recent and  historical  return  rates for both
specific products and distributors,  the impact of any new product releases in a
new  jurisdiction  and projected  economic  conditions.  At March 31, 2007,  the
provision for product returns was approximately $111,000.

Revenue recognition

The Company  recognizes  product  revenue,  net of estimated sales discounts and
provisions for returns,  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.

From time to time,  the Company  enters in bill and hold  arrangements.  None of
them were  outstanding at March 31, 2007. Such bill and hold  arrangements  meet
the following criteria for revenue recognition:

o The risks of ownership passed to the buyer;

o The customer made a fixed commitment to purchase the breast implants, in
  writing;

o The buyer, not the Company, requested that the transaction be on a bill and
  hold basis. The buyer had a substantial business purpose for ordering the
  goods on a bill and hold basis-primarily its on lack of warehousing space;

o There is a fixed schedule for delivery of the goods. The dates for delivery
  are reasonable and are consistent with the buyer's business purpose;

o The Company did not retain any specific performance obligations such that the
  earning process is not complete;

o The ordered breast implants were segregated from the Company's inventory and
  were not subject to being used to fill other orders;

o The breast implants were complete and ready for shipment.

o The date by which the Company expect payment was not modified and the Company
  has not modified its normal billing and credit terms for this buyer;

o The Company's past experiences with and pattern of bill and hold transactions;

o The buyer has the expected risk of loss in the event of a decline in the
  market value of the breast implants;

o The Company's custodial risks are insurable and insured; and

o The business reasons for the bill and hold have not introduced a contingency
  to the buyer's commitment.

                                       7
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock options

Prior to January 1, 2006, the Company accounted for its stock-based compensation
plans under the recognition and measurement  provisions of Accounting Principles
Board ("APB")  Opinion No. 25,  Accounting  for Stock Issued to  Employees,  and
related   Interpretations,   as  permitted  by  SFAS  No.  123,  Accounting  for
Stock-Based  Compensation.  The  Company  did not  recognize  compensation  cost
related to stock options  granted to its employees  and  non-employee  directors
that had an exercise  price equal to or above the market value of the underlying
common  stock on the date of grant in its  condensed  consolidated  statement of
income prior to January 1, 2006.  Effective January 1, 2006, the Company adopted
the fair value recognition provisions of SFAS No. 123R, Share-Based Payment, and
related interpretations using the modified-prospective  transition method. Under
that method,  compensation cost recognized in the first quarter of 2006 includes
(a) compensation  cost for all stock-based  awards granted prior to, but not yet
vested as of January 1, 2006  based on the grant  date fair value  estimated  in
accordance  with the original  provisions  of SFAS No. 123 and (b)  compensation
cost for all  stock-based  awards  granted on or  subsequent to January 1, 2006,
based on the grant-date  fair value  estimated in accordance with the provisions
of SFAS No. 123R. Results for prior periods have not been restated. Prior to the
adoption of SFAS No.  123R,  the Company  never  recognized  tax  benefits  from
deductions  resulting from the exercise of stock options because no options have
ever been recognized.

                                       8
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Pro Forma  Information  Under SFAS No. 123 for Periods  Prior to January 1, 2006
The  following  table  illustrates  the effect on net  earnings and earnings per
share if the Company had applied the fair value  recognition  provisions of SFAS
No. 123 to stock-based awards for the nine-month period ended March 31, 2007 and
2006:
<TABLE>
<CAPTION>
                                                                               Nine-month             Nine-month
                                                                               period                 period
                                                                               ended March            ended March
                                                                               31, 2007               31, 2006
                                                                               -------------          -------------
Net loss:
<S>                                                                            <C>                    <C>
As reported                                                                    $ (743,886)            $   (30,728)
Add: Total stock-based employee compensation included in net income
as reported, net of related tax effects                                                 -                       -
Deduct: Total stock-based employee compensation expense determined                      -                 124,376
under fair value based method for all awards, net of related tax
effects                                                                          (       )             (         )
                                                                               -------------          -------------

Pro forma                                                                      $ (743,886)            $  (155,104)
                                                                               =============          =============
Basic earnings per share:
As reported                                                                    $ (0.04)               $      0.00
                                                                               =============          =============
Pro forma                                                                      $ (0.04)               $      0.00
                                                                               =============          =============
Diluted earnings per share:
As reported                                                                    $ (0.04)               $     (0.01)
                                                                               =============          =============
Pro forma                                                                      $ (0.04)               $     (0.01)
                                                                               =============          =============
</TABLE>

For  purposes of the pro forma  calculations,  the fair value of each option was
estimated on the date of the grant using the Black-Scholes option-pricing model,
assuming  no  expected  dividends,  and  the  following  assumptions:   expected
volatility rate: 44%, risk-free  interest rate: 3.7%,  expected term: 3 years At
the  date of the  issuance  of the  options,  the  Company's  common  stock  was
publicly-traded  for less than 18 months and it was thinly-traded.  Accordingly,
the Company  estimated  the expected  volatility  factor based upon the expected
volatility  of similar  publicly-traded  companies.  The  approximate  risk free
interest rate was based on the implied yield available on U.S. Treasury constant
maturities  issues with  remaining  terms  equivalent to the Company's  expected
term. The expected term of the Company's stock options was based on the expected
term of services of the individuals who received the options.

                                       9
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

As of March 31, 2007, the unrecognized  compensation costs related to non-vested
awards  amounted to  approximately  $104,000,  which will be recognized over the
following 14 months.

The Company  recognized a  compensation  expense of  approximately  $324,000 and
$62,000   during  the   nine-month   period  ended  March  31,  2007  and  2006,
respectively, in connection with all options outstanding during that period.

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 March 31, 2007, the exchange rate for the Euros (EUR) was $1.33 U.S.
for 1.00 EUR.

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

Inventories

Inventories  are stated at the lower of cost or market,  cost  determined by the
first-in,  first-out  (FIFO)  method.  The Company writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory  and the  estimated  market  value based upon  assumptions
about future demand and market  conditions.  The Company  writes down  inventory
during the  period in which such  products  are no longer  marketable  in any of
their markets due to governmental regulations as well as inventory which matures
within the next three months of the measurement date. Property and Equipment

Property and  equipment  are stated at cost less  accumulated  depreciation  and
amortization.  Depreciation  is  recorded  on the  straight-line  basis over the
estimated  useful  lives of the  assets,  which  range  from three to ten years.
Amortization of leasehold  improvements  and capital leases is recorded over the
shorter of the  straight-line  basis over the estimated useful life or the lease
term of the asset.  Normal maintenance and repairs of property and equipment are
expensed  as  incurred  while  renewals,  betterments  and  major  repairs  that
materially  extend the useful life of property and  equipment  are  capitalized.
Upon retirement or disposition of property and equipment,  the asset and related
accumulated  depreciation  or  amortization is removed from the accounts and any
resulting gain or loss is charged to operations.

                                       10
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Goodwill

Goodwill  represents the excess of costs over fair value of assets of businesses
acquired.  In June 2001,  the  Financial  Accounting  Standards  Board  ("FASB")
approved the issuance of Statement of Financial  Accounting  Standards  ("SFAS")
No.  141,  "Business  Combinations"  and  SFAS  No.  142,  "Goodwill  and  Other
Intangible  Assets."  These  standards  require that all  business  combinations
initiated after December 31, 2001 be accounted for using the purchase method. In
addition,  all intangible assets acquired that are obtained through  contractual
or legal right, or are capable of being separately sold, transferred,  licensed,
rented  or  exchanged  shall be  recognized  as an asset  apart  from  goodwill.
Goodwill  and  intangibles  with  indefinite  lives will no longer be subject to
amortization,  but  will  be  subject  to at  least  an  annual  assessment  for
impairment by applying a fair value based test. The Company's  goodwill at March
31, 2007 results from its 2002 acquisition of its Spain  subsidiary.  Management
has  established  that based on future  cash flows  generated  from its  Spanish
operations, the Company's goodwill at March 31, 2007 is not impaired. Impairment
of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever  circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered.  In such  circumstances,  the Company will estimate the future
cash  flows  expected  to  result  from the use of the  asset  and its  eventual
disposition.  Future  cash  flows are the future  cash  inflows  expected  to be
generated  by an asset less the future  outflows  expected  to be  necessary  to
obtain those inflows. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, the
Company  will  recognize an  impairment  loss to adjust to the fair value of the
asset. At March 31, 2007, the Company believes that there has been no impairment
of its long-lived assets. Investment

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

The Company uses the  liability  method for income taxes as required by SFAS No.
109  "Accounting  for Income Taxes." Under this method,  deferred tax assets and
liabilities are determined based on differences  between financial reporting and
tax basis of assets and  liabilities.  Deferred tax assets and  liabilities  are
measured  using  enacted  tax rates  and laws  that  will be in effect  when the
differences are expected to reverse.  Valuation  allowances are established when
it is more likely than not that the  deferred  tax assets will not be  realized.
Shipping and Handling Costs

Shipping and handling costs are included in cost of revenues in accordance  with
guidance  established  by the  Emerging  Issues  Task  Force,  issue No.  00-10,
"Accounting for Shipping and Handling Costs."

                                       11
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Research and Development

Research  and  development  costs are  charged to  operations  as  incurred  and
consists primarily of salaries and related benefits, raw materials and supplies.

Income (Loss) per Share

The Company presents basic income (loss) per share and, if appropriate,  diluted
earnings per share in accordance  with the  provisions of SFAS No. 128 "Earnings
per Share" ("SFAS 128").

Under SFAS 128,  basic net income  (loss) per share is computed by dividing  the
net income (loss) for the year by the weighted  average  number of common shares
outstanding  during  the year.  Diluted  net  income  per share is  computed  by
dividing  the net income for the year by the weighted  average  number of common
shares and common share equivalents outstanding during the year. The Company has
725,000  options  outstanding at March 31, 2007.  Additionally,  the Company may
have to issue up to  2,220,512  shares upon  conversion  of certain  convertible
debentures,  including those exchanged  during  September 2005. All common stock
equivalents  outstanding  during the nine-month  period ended March 31, 2007 and
2006 are antidilutive. Fair Value of Financial Instruments

The  carrying  amounts  of  financial  instruments,   including  cash,  accounts
receivable,   lines  of  credit  and  accounts   payable  and  accrued  expenses
approximate  fair  value at March  31,  2007  because  of the  relatively  short
maturity  of  the   instruments.   The  carrying  value  of  capitalized   lease
obligations,  long-term debt, and convertible  debentures approximate fair value
at March 31,  2007  based upon  terms  available  for  companies  under  similar
arrangements.

New Accounting Pronouncements

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering
the  Effects of Prior  Year  Misstatements  when  quantifying  Misstatements  in
Current Year Financial  Statements  ("SAB 108").  SAB 108 requires  companies to
evaluate the  materiality  of  identified  unadjusted  errors on each  financial
statement and related  financial  statement  disclosure  using both the rollover
approach and the iron curtain  approach,  as those terms are defined in SAB 108.
The rollover approach quantifies  misstatements based on the amount of the error
in the current  year  financial  statement,  whereas the iron  curtain  approach
quantifies  misstatements  based on the effects of correcting  the  misstatement
existing in the balance  sheet at the end of the current year,  irrespective  of
the  misstatement's  year(s)  of  origin.  Financial  statements  would  require
adjustment  when either approach  results in quantifying a misstatement  that is
material. Correcting prior year financial statements for immaterial errors would
not require previously filed reports to be amended. If a Company determines that
an  adjustment to prior year  financial  statements is required upon adoption of
SAB 108 and does not elect to restate its previous financial statements, then it
must  recognize  the  cumulative  effect  of  applying  SAB 108 in  fiscal  2006
beginning  balances of the affected assets and liabilities  with a corresponding
adjustment to the fiscal 2006 opening balance in retained  earnings.  SAB 108 is
effective for interim periods of the first fiscal year ending after November 15,
2006.  The  adoption  of SAB  108  did  not  have  an  impact  on the  Company's
consolidated financial statements.

Other  accounting  standards  that have been  issued or  proposed by the FASB or
other standards-setting  bodies that do not require adoption until a future date
are not  expected  to  have a  material  impact  on the  consolidated  financial
statements upon adoption.

                                       12
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Provision for returns

In the normal course of business,  the Company does not provide  stock-balancing
or price  protection  rights to its  distributors;  however,  on a non-recurring
basis, we have historically  accepted product returns. The Company estimates its
provision for product returns to amount to  approximately  $111,000 at March 31,
2007. Management  establishes provisions for estimated returns concurrently with
the  recognition  of  revenue.   The  provisions  are  established   based  upon
consideration of a variety of factors, including, among other things, recent and
historical  return rates for both specific  distributors and projected  economic
conditions.

Provision for Product Replacements

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

Concentration of Credit Risks

The Company is subject to  concentrations of credit risk primarily from cash and
cash equivalents and accounts  receivable.  The Company maintains  accounts with
French  financial  institutions,  which  at times  exceeds  the  insured  French
statutory  limit of  approximately  $150,000.  The Company  minimizes its credit
risks associated with cash by periodically  evaluating the credit quality of its
primary financial institutions.  The Company's accounts receivables are due from
surgeons  in France and from  distributors  in all other  countries  in which it
markets its  products.  The Company  does not require  collateral  to secure its
accounts receivables. However, the Company regularly insures a proportion of its
accounts  receivable  through a financial  institution.  At March 31, 2007,  the
financial  institution  insured  approximately  $2.5  million  of the  Company's
accounts receivables. Two of the Company's customers accounted for approximately
18% and 10%,  respectively,  of its gross accounts receivable at March 31, 2007.
No other customers accounted for more than 10% of its net accounts receivables.

                                       13
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Product Concentration Risk

Substantially  all of the  Company's  revenues  derive  from the sale of  breast
implants.

Supplier Concentration Risk

One of the Company's  suppliers  procures  titanium  which is used as coating in
certain of the  Company's  breast  implants.  The  agreement  with this supplier
terminates in 2009. The Company  cannot  guarantee that it will be able to renew
such agreement on acceptable terms, or if unable to renew the agreement, that it
will secure the  procurement  of such titanium  from other  suppliers on similar
terms, if at all.

Customers Concentration Risk

Two of the Company's customers accounted for 19% and 10%,  respectively,  of its
revenues during the nine-month period ended March 31, 2007. Two of the Company's
customers  accounted for 16% and 16% of its revenues,  respectively,  during the
nine-month  period ended March 31, 2006. The Company minimizes its concentration
risk associated with customers by diversifying its customer base and introducing
its products in new countries.

Reclassifications

Certain items in the prior years'  consolidated  financial  statements have been
reclassified to conform to the current year presentation.

NOTE 4 - INVENTORIES

Inventories at March 31, 2007 consist of the following:

Finished goods            $ 2,729,835
Work-in-process             1,445,535
Raw materials                 366,017
                          -----------
                          $ 4,541,387
                          ===========

NOTE 5 - INVESTMENTS

At March 31, 2007,  the Company has a 38.05%  investment in SCI Lucas, a related
French real estate  company.  The equity in income of the  investee  amounted to
approximately  $51,000 and $32,000 during the nine-month periods ended March 31,
2007 and 2006,  respectively.  SCI Lucas leases its  facilities  to the Company,
which is the sole tenant.  The leases  expire in November  2009.  The leases are
renewable  automatically unless the Company cancels the leases nine months prior
to the renewal date.

During the  nine-month  period  ended March 31,  2007,  SCI Lucas  reimbursed  a
non-interest  bearing  advance  of  approximately  $88,000 to the  Company.  The
Company  incurred  rental  expense  and  paid  rent  to  SCI  Lucas  in  amounts
aggregating  approximately  $410,000 and $208,000 during the nine-month  periods
ended March 31, 2007 and 2006, respectively.

                                       14
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 6 - LONG TERM DEBT

The Company's long term debt consists of various notes payable with  outstanding
principal amounts ranging from approximately $106,000 to $335,000, with variable
interest  rates,  based on the EURIBOR  plus 1.6% to 2.5%,  ranging from 5.3% to
6.4% per year at March 31, 2007,  with due dates between April 2010 and December
2012. In addition,  the Company has received  non-interest bearing advances from
ANVAR, an agency of the French government,  which finances or subsidizes certain
research  and  development  projects.  If the  research  does  not  result  in a
commercially  feasible product and certain other conditions are met, the Company
will not have to repay some or all of the  advances.  The  Company is  currently
unable to determine whether the research associated with the advance will result
in a commercially  feasible product and does not anticipate  knowing the outcome
of such research  efforts in the foreseeable  future.  Accordingly,  the Company
includes the advances in the long-term portion of its debt.

NOTE 7 - CONVERTIBLE DEBENTURES

On October 9, 2003,  OSMXM,  Inc., one of the Company's  subisidiaries,  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 transaction 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.

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

The  convertible   debentures  initially  issued  to  HEM  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.  During the nine-month  period ended March 31, 2007 and
2006, the amortization of the debt discount amounted to

                                       15
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 8 - CONVERTIBLE DEBENTURES (continued)

approximately  $86,000  and  $155,000,  respectively,  and has been  included in
interest expense in the accompanying consolidated financial statements.  Accrued
interest  associated with the convertible  debentures  amounted to approximately
$34,000 at March 31, 2007.

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

The  difference  between  the face  amount  of the  Debenture  and the  proceeds
generated  from the shares  received in exchange of the  Debentures  amounted to
approximately  $1,580,000  and has been recorded as a debt  discount.  Such debt
discount is  amortized  over the term of the  Debenture.  During the  nine-month
period  ended March 31, 2007 and 2006,  the  amortization  of the debt  discount
amounted to  approximately  $237,000 and  $203,000,  respectively,  and has been
included in interest expense in the accompanying financial statements.

NOTE 9 - LINES OF CREDIT

The  Company  entered  into  lines  of  credit  agreements  with  two  financial
institutions  up to the aggregate  amount of  approximately  $5.0  million.  The
Company has used  approximately $1.9 million under such lines of credit at March
31,  2007.  The lines of credit bear  interest at the EURIBOR  rate plus 2.0% or
3.7% at March 31, 2007. The outstanding  principal  balance plus any interest is
payable on demand and is secured by accounts  receivables of approximately  $7.5
million and inventories of approximately $4.5 million.

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  replacement  claims.  The note bears  interest at the rate of 6.75% per
annum.  The principal  amount under the note as of March 31, 2007 was $0. During
the second quarter of fiscal 2006, the distributor notified the Company that the
distributor is owed $3.3 million under the promissory note. The Company disputes
that it presently owes the  distributor the $3.3 million claimed to be due under
the amended  distribution  agreement.  Based on the information  provided to the
Company by  Medicor,  the Company  has  determined  that  Medicor  breached  its
obligations under the amended  distribution  agreement.  Therefore,  the Company
terminated such agreement in May 2007.

                                       16
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 9 - LINES OF CREDIT (continued)

In this regard, the Company will be seeking  information from the distributor to
determine  whether the  distributor has acted in compliance with its obligations
under the  amended  distribution  agreement.  The Company  believes  that it has
incurred  significant damages in excess of the $3.3 million claimed to be due to
the distributor because of the distributor's breach of its obligations under the
amended  distribution  agreement.  The Company has provided for a provision  for
such claims aggregating $1.3 million at March 31, 2007, as reflected in accounts
payable and accrued expenses in the accompanying balance sheet.

NOTE 10 - STOCK OPTIONS

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  1,175,000  options.  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  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.

There were no transactions in the 2004 Plan during the nine-month  periods ended
March 31, 2007 and 2006.

NOTE 11 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company  operates in one single  segment,  breast  implants and analyzes its
revenues as derived from two  geographic  locations:  France and the rest of the
world.  The Company did not have  revenues from the U.S.  during the  nine-month
periods ended March 31, 2007 and 2006.  Information about the Company's sales in
different  geographic  locations for the nine-month periods ended March 31, 2007
and 2006 is shown below pursuant to the provisions of SFAS No. 131, "Disclosures
about segments of an Enterprise and Related Information."

                                 Nine-months ended March 31,
                                      2007             2006
                               ------------        ------------
France                          $ 2,039,403         $1,660,895
Outside of France                 8,918,940          8,066,416
                               ------------        ------------
                               $10,958,343          $9,727,311
                               ============        ============

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

                                       17
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 12 - LEGAL CONTINGENCIES

In October 1999, June 2000 and July 2003,  separate but related  complaints were
filed by Saul Kwartin, Ruth Kwartin,  Steven M. Kwartin, Robert Kwartin and Nina
Kwartin  against our  subsidiary  Poly  Implant  Protheses,  S.A.  ("PIP"),  III
Acquisition Corp. d/b/a PIP .America, PIP/USA, Inc., Jean-Claude Mas, our former
CEO, personally, and others, in the Circuit Court of Miami-Dade County, Florida.
Plaintiffs  are all  members  of one family who  purport to be  shareholders  of
PIP/USA,  Inc., a distributor  of PIP,  suing  derivatively  on its behalf,  and
individually,  and seeking to rescind various  transactions between PIP .America
and PIP, and seeking to impose liability  against PIP and its  co-defendants for
unspecified monetary damages arising out of alleged tortious and other purported
wrongful acts concerning alleged relationships  between plaintiffs,  PIP and the
other defendants.

Initially, two cases were filed: one in October of 1999 by Saul and Ruth Kwartin
and assigned Case No.  99-25227-CA-01  and one in June of 2000 by Steven Kwartin
and  assigned  Case  No.  00-14665-CA-01.  Case  No.  99-25227  was  voluntarily
dismissed by the  Plaintiffs,  who then  unsuccessfully  tried to withdraw their
dismissal.  The Plaintiffs  then appealed.  In May of 2004, the appellate  court
affirmed the trial court's Order approving the voluntary dismissal.  A motion by
PIP/USA  and Mr. Mas to recover  their  attorneys'  fees is pending in the trial
court,  as is a motion to disqualify  the  Plaintiffs'  counsel in that lawsuit.
Case No.  00-14665-CA-01  by Steven Kwartin  remains  pending.  In June of 2003,
Robert and Nina Kwartin  commenced a lawsuit  assigned Case No.  03-15006.  That
lawsuit  remains  pending.  In  September of 2003,  Saul and Ruth Kwartin  filed
another lawsuit  assigned Case No.  03-22537-CA-27,  alleging  similar claims to
those  included  in the  dismissed  case.  Within a day or two of that  lawsuit,
Steven  Kwartin  filed his  second  lawsuit  assigned  Case No.  03-22399-CA-15,
against Mr. Mas and Donald  McGhan  only.  On December 22, 2005 four of the five
lawsuits  were  consolidated  for  pre-trial  purposes.   They  are  cases  No.:
00-14665-CA-31, 03-15006-CA-31, 03-22399-CA-31 and 03-22537-CA-31, of those four
cases three were  transferred to the Complex Business  Litigation  Section 40 by
Order  dated  December  29,  2006.  The  cases   transferred   were  cases  No.:
03-15006-CA-31, 03-22399-CA-31 and 0322537-CA-31.

In November of 2003,  Jessica  Fischer  Schnebel and fifteen other women filed a
Second Amended  Consolidated  Class Action Complaint against PIP, PIP/USA,  Inc.
and III  Acquisition  Corp.  d/b/a PIP  .America  in the  Circuit  Court of Cook
County,  Illinois.  The  Second  Amended  Consolidated  Class  Action  Complaint
contains counts alleging product liability,  breach of the implied warranties of
merchantability and fitness for a particular purpose,  violation of the Illinois
Consumer Fraud Act and a contract claim alleging third-party beneficiary status.
Unspecified monetary damages, exemplary damages and attorneys fees and costs are
sought.  Motions to dismiss  filed by PIP and PIP .America  remains  pending and
discovery is  underway.  The  plaintiffs  have not sought to date to certify any
putative class. Our U.S.  distributor has tendered this case to PIP, for defense
and  indemnity  pursuant to the  distributor  agreement.  On June 7, 2006,  Poly
Implant  Protheses,  S.A.  filed a motion to dismiss third amended  consolidated
class action Complaint.  That motion remains pending. A Status conference is set
for December 6, 2007 at 11:00a.m.

Heritage  Worldwide,  Inc.  and PIP and other  defendants  were sued by Madeline
Sanchez in New York Supreme Court in July of 2004 for alleged product  liability
and  other  related  claims.  Both  Heritage  Worldwide,  Inc.  and PIP deny any
liability  to the  Plaintiff  and  have  answered  the  Complaint  and  asserted
affirmative  defenses.  Discovery  is  ongoing.  PIP filed a motion for  summary
judgment on  December  11,  2006,  which  remains  pending.  Discovery  has been
completed  and no trial date has been set.  In April  2006,  PIP was served with
four product liability lawsuits in Texas entitled Melissa Stoltz, et al. v. Poly
Implant Protheses, S.A., et al., Case No.: 2005CI18773,  District Court of Bexar
County,  Texas; Lisa Anderson,  et al. v. Poly Implant  Protheses,  S.A. et al.,
Case No.: DC-05-12614, District Court of Dallas County, Texas; Rose

                                       18
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

NOTE 12 - LEGAL CONTINGENCIES

Healey,  et al. v. Poly Implant  Protheses,  S.A. et al., Case No.:  2005-65625,
District  Court of Harris  County,  Texas;  Landa  Joly et al.  v. Poly  Implant
Protheses,  S.A. et al., Case No.:  05-11-63,596-B,  District  Court of Victoria
County, Texas. PIP has removed these lawsuits to federal court and filed Answers
and Affirmative Defenses. PIP denies all liability. Discovery is ongoing.

PIP was sued by Jo Ann Sagona  Carimi in United  States  District  Court for the
Eastern  District of Louisiana in August,  2006, Case No.  04-2813,  for alleged
product liability and other related claims.  PIP has denied any liability.  This
action was settled on confidential terms in January, 2007.

On September 1, 2006, PIP was sued in federal court in Houston,  Texas by eleven
individuals  alleging  product  liability claims in that certain action entitled
Edwards,  et al. v. PIP, et al. Case No,  H-06-2817.  Filed a Motion to Dismiss.
The Motion to Dismiss  has not been ruled on yet.  Discovery  is ongoing in this
case.

On March 14,  2007,  PIP was sued in federal  court in  Houston,  Texas by eight
individuals  alleging  product  liability claims in an action entitled Adams, et
al., v. PIP, et al. PIP has not been served.

In July 2005, IP Resource Ltd ("IP"), a British corporation sued PIP for alleged
patent  infringement  and  claims in excess of $2.1  million  in  damages.  This
litigation is in its early stage of discovery and the Company  believes that the
likelihood that any contingencies associated with it is remote.

III Acquisition  Corp. d/b/a PIP .America claims  indemnification  from 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 $470,000 at March 31, 2007
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
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.

                                       19
<PAGE>


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

Overview

Heritage Worldwide,  Inc. (the "Company" or "we") and its subsidiaries  develop,
manufacture, and market breast implants worldwide. 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 in the process of developing  new products.  We expect to introduce a new
product  line of breast  implants  which is based on  titanium  coating.  We are
completing  the planning  phase of our European  clinical  trials and anticipate
that we will market such breast implants in the European Union within 24 months,
although  this date may be  extended  subject  to the  results  of our  clinical
trials.  We believe that the costs of  monitoring  the  clinical  trials will be
approximately  $500,000 over this period. We will continue to invest in research
and  development  to enhance and  introduce new and existing  products.  To meet
these operational costs, we depend upon equity financings,  collaborations,  and
proceeds from short and long-term debt.

Critical Accounting Policies and Estimates

A summary  of  significant  accounting  policies  is  provided  in Note 3 to our
consolidated  financial statements included in our 2006 Form 10-KSB.  Management
believes that the  application of these  policies on a consistent  basis enables
the  Company to provide  useful and  reliable  financial  information  about the
Company's operating results and financial condition.

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

Stock-Based  Compensation.  Prior to January 1, 2006, the Company  accounted for
its  stock-based  compensation  plans  under  the  recognition  and  measurement
provisions of Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations, as permitted by SFAS No.
123,  Accounting  for  Stock-Based  Compensation.  The Company did not recognize
compensation  cost  related  to  stock  options  granted  to its  employees  and
non-employee  directors  that had an exercise price equal to or above the market
value of the  underlying  common  stock  on the  date of grant in its  condensed
consolidated  statement of income prior to January 1, 2006. Effective January 1,
2006,  the Company  adopted the fair value  recognition  provisions  of SFAS No.
123R,    Share-Based   Payment,   and   related    interpretations   using   the
modified-prospective  transition  method.  Under that method,  compensation cost
recognized in the third quarter of 2006 includes (a)  compensation  cost for all
stock-based  awards  granted  prior to, but not yet vested as of January 1, 2006
based on the grant date fair value  estimated  in  accordance  with the original
provisions of SFAS No. 123 and (b) compensation cost for all stock-based  awards
granted on or subsequent to January 1, 2006,  based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123R.  Results for prior
periods have not been  restated.  Prior to the  adoption of SFAS No.  123R,  the
Company did not recognize any tax benefits from  deductions  resulting  from the
exercise  of stock  options as  operating  cash flows in its  statement  of cash
flows, because no options have ever been exercised.  SFAS No. 123R requires that
the portion of benefits  resulting  from tax  deductions in excess of recognized
compensation (the "excess tax benefits") be presented as financing cash flows.

                                       20
<PAGE>

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

From time to time,  we enter in bill and hold  arrangements.  Such bill and hold
arrangements meet the following criteria for revenue recognition:

o The risks of ownership passed to the buyer;

o The customer made a fixed commitment to purchase the breast implants,
  in writing;

o The buyer, not us, requested that the transaction be on a bill and hold
  basis. The buyer had a substantial business purpose for ordering the goods on
  a bill and hold basis-primarily its on lack of warehousing space;

o There is a fixed schedule for delivery of the goods. The date for delivery are
  reasonable and are consistent with the buyer's business purpose;

o We did not retain any specific performance obligations such that the earning
  process is not complete;

o The ordered breast implants were segregated from our inventory and were not
  subject to being used to fill other orders;

o The breast implants were complete and ready for shipment;

o The date by which we expect payment was not modified and we have not modified
  our normal billing and credit terms for this buyer;

o Our past experiences with and pattern of bill and hold transactions;

o The buyer has the expected risk of loss in the event of a decline in the
  market value of the breast implants;

o Our custodial risks are insurable and insured;

o The business reasons for the bill and hold have not introduced a contingency
  to the buyer's commitment.


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

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

Goodwill.  At March 31, 2007,  we had  approximately  $1.1 million in indefinite
lived  goodwill  related  to our  acquisition  of our  subsidiary  in Spain.  We
evaluate goodwill based on the future  contributing  margins of such subsidiary.
We use judgment in assessing  goodwill for impairment.  Goodwill is reviewed for
impairment  annually,  or sooner if events or changes in circumstances  indicate
that the  carrying  amount  could  exceed fair  value.  Fair values are based on
discounted  cash flows using a discount rate  determined by our management to be
consistent  with industry  discount  rates and the risks inherent in our current
business  model.  In  accordance  with SFAS No. 142, we  completed  the required
impairment  tests of goodwill at the date of adoption  and annually as required.
There were no  impairment  charges  recorded as a result of the adoption of SFAS
No. 142 or annual  impairment  tests.  Due to uncertain  market  conditions  and
potential changes in our strategy and product portfolio, it is possible that the
forecasts we use to support our goodwill could change in the future, which could
result in non-cash charges that would adversely affect our results of operations
and financial condition.

Deferred Tax Assets. We are required to estimate our income taxes in each of the
jurisdictions  in which we  operate  as part of the  process  of  preparing  our
consolidated  financial  statements.  At June 30,  2006,  the Company has no net
deferred  tax assets.  SFAS No. 109,  Accounting  for Income  Taxes,  requires a
valuation  allowance to reduce the deferred tax assets reported if, based on the
weight of the evidence,  it is not more likely than not that some portion or all
of the  deferred tax assets will be realized.  Management  reviews  deferred tax
assets  periodically  for  recoverability  and  makes  estimates  and  judgments
regarding  the  expected  geographic  sources  of  taxable  income,  gains  from
investments,  as well as tax planning  strategies  in  assessing  the need for a
valuation  allowance.

                                       21
<PAGE>

We determined that a valuation  allowance  relating to foreign tax net operating
loss  carryovers  was  necessary to reduce our deferred tax assets to the amount
that will more likely than not be realized.  If the  estimates  and  assumptions
used in our  determination  change in the future, we could be required to revise
our  estimates of the valuation  allowances  against our deferred tax assets and
adjust our  provisions for additional  income taxes.  In the ordinary  course of
global  business,  there are  transactions for which the ultimate tax outcome is
uncertain,  thus judgment is required in determining the worldwide provision for
income taxes. We provide for income taxes on transactions  based on our estimate
of the probable  liability.  We adjust our provision as appropriate  for changes
that impact our underlying  judgments.  Changes that impact provision  estimates
include such items as  jurisdictional  interpretations  on tax filing  positions
based on the results of tax audits and general tax authority rulings. Due to the
evolving nature of tax rules combined with the large number of  jurisdictions in
which we operate, it is possible that our estimates of our tax liability and the
realization  of our deferred  tax assets  could change in the future,  which may
result in  additional  tax  liabilities  and  adversely  affect  our  results of
operations, financial condition and cash flows.

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

RESULTS OF OPERATIONS

                                           CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                  Increase/      Increase/
                                            For the nine-month period ended      (Decrease )    (Decrease)
                                                     December 31,               2007 vs 2006   2007 vs 2006
                                            ---------------------------------
                                                2007              2006                $              %
                                            ---------------   ----------------- ------------- -------------
                                            (Unaudited)       (Unaudited)

<S>                                           <C>                <C>              <C>              <C>
Revenues                                      $ 10,958,343       $ 9,727,311      $1,231,032       12.7%

Cost of revenues                                 5,277,126         4,172,055       1,105,071       26.5%
                                            ---------------   ----------------- ------------- -------------

     Gross margin                                5,681,217         5,555,256         125,961        2.3%
                                            ---------------   ----------------- ------------- -------------
Operating expenses:
  Selling, general and administrative            5,121,221         4,342,476         778,745       17.9%
  Research and development                         919,017           780,249         138,768       17.8%
                                            ---------------   ----------------- ------------- -------------

     Total operating expenses                    6,040,238         5,122,725         917,513       17.9%
                                            ---------------   ----------------- ------------- -------------

Loss before other expenses and
Operating (loss) income                           (359,021)          432,531        (791,552)    -183.0%
                                            ---------------   ----------------- ------------- -------------

Other expenses:
 Gain in equity investment                          50,894            32,008          18,886          NM
  Interest expense-related party                  (147,700)         (155,600)          7,900          NM
  Interest expense                                (274,464)         (323,534)         49,070      -15.2%
                                            ---------------   ----------------- ------------- -------------

     Total other expenses                         (371,270)         (447,126)         75,856      -17.0%
                                            ---------------   ----------------- ------------- -------------


(Loss) income before minority interest            (730,291)          (14,595)       (715,696)         NM

Minority interest                                  (13,595)          (16,133)          2,538      -15.7%
                                            ---------------   ----------------- ------------- -------------

Net (loss) income                               $ (743,886)        $ (30,728)     $ (713,158)         NM
                                            ===============   ================= ============= =============

NM: not meaningful
</TABLE>

                                       22
<PAGE>

Nine months Ended March 31, 2007 Compared with Nine months Ended March 31, 2006

Revenues

Revenues consist primarily of the sale of breast implants and other body support
products.  The increase in revenues during the nine-month period ended March 31,
2007  when  compared  to the prior  year  period is  primarily  attributable  to
increased volume of breast implants sold to distributors in Latin America,  and,
to a lesser  extent,  to existing  surgeons  and clinics in France,  offset by a
decrease in the average selling price of breast implants.

Cost of Revenues

Cost of revenues consists primarily of materials and direct labor expenses
associated with the production of breast implants. The increase in costs of
revenues during the nine-month period ended March 31, 2007 is primarily
attributable to an increase in volume of product sold.

Selling and General Administrative Expenses

Selling,  general and administrative  expenses consist primarily of compensation
and related benefits of sales  representatives which market our products as well
as general and administrative  staff used to support our operations,  as well as
facilities-related  expenses  professional fees and allowance for bad debts. The
increase in selling,  general and administrative  expenses during the nine-month
period ended March 31, 2007 when compared to the prior year comparable period is
primarily due to a an increase of expenses associated with share-based payments,
which was  accelerated  due to the  termination  of the  options  granted to our
former chief  executive in the third quarter of 2007 as well as a lower decrease
in the provision for doubtful accounts and product replacements  recorded in the
nine-month period ended March 31, 2007 of approximately $380,000

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  increase in research and  development
expenses  during the nine-month  period ended March 31, 2007 is primarily due to
an increase in  personnel  allocated  to  development  of new  products  and the
enhancement of existing products.

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 decrease in interest  expense
during the nine-month  period ended March 31, 2007 is primarily  higher interest
resulting from increased  utilization  of our  interest-bearing  lines of credit
during the nine-month period ended March 31, 2006.

Liquidity  and  Capital Resources

During  the  nine-month  period  ended  March 31,  2007,  we used  approximately
$774,000 to fund our operating activities, which is due to the following:

o Our net loss of approximately $744,000 adjusted for non-cash items:
  debt discount of approximately $366,000, depreciation of $499,000, and
  the imputation of the fair value of options amounting to approximately
  $324,000. Additionally, our account receivables and accounts payable
  and accrued expenses decreased by approximately $126,000 and $764,000,
  respectively, and our inventory increased by approximately $483,000.

o We incurred capital expenditures of approximately $259,000 in connection with
  the remodeling of our plant.

o Our proceeds from issuance of long-term debt and line of credit amounting to
  approximately $184,000 and $735,000, respectively. We repaid approximately
  $254,000 in long-term debt during the nine-month period ended March 31, 2007.

During the  nine-month  period ended  December 31, 2006,  we used  approximately
$298,000 to fund our operating activities, which is due to the following:

o Our net loss of approximately $31,000 adjusted for non-cash items:
  debt discount of approximately $358,000, depreciation of $364,000, a decrease
  in provision for doubtful accounts of approximately $336,000. Additionally,
  our inventory increased by $560,000 to anticipate the increased demand of our
  products.

o We incurred capital expenditures of approximately $94,000.

o Our proceeds from long-term debt and lines of credit, which amounted to
  $483,000 and $103,000, funded our cash used in operating activities and
  capital expenditures and funded repayments long-term debt of approximately
  $128,000.

                                       23
<PAGE>


New Accounting Pronouncements


In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering
the  Effects of Prior  Year  Misstatements  when  quantifying  Misstatements  in
Current Year Financial  Statements  ("SAB 108").  SAB 108 requires  companies to
evaluate the  materiality  of  identified  unadjusted  errors on each  financial
statement and related  financial  statement  disclosure  using both the rollover
approach and the iron curtain  approach,  as those terms are defined in SAB 108.
The rollover approach quantifies  misstatements based on the amount of the error
in the current  year  financial  statement,  whereas the iron  curtain  approach
quantifies  misstatements  based on the effects of correcting  the  misstatement
existing in the balance  sheet at the end of the current year,  irrespective  of
the  misstatement's  year(s)  of  origin.  Financial  statements  would  require
adjustment  when either approach  results in quantifying a misstatement  that is
material. Correcting prior year financial statements for immaterial errors would
not require previously filed reports to be amended. If a Company determines that
an  adjustment to prior year  financial  statements is required upon adoption of
SAB 108 and does not elect to restate its previous financial statements, then it
must  recognize  the  cumulative  effect  of  applying  SAB 108 in  fiscal  2006
beginning  balances of the affected assets and liabilities  with a corresponding
adjustment to the fiscal 2006 opening balance in retained  earnings.  SAB 108 is
effective for interim periods of the first fiscal year ending after November 15,
2006.  The  adoption  of SAB  108  did  not  have  an  impact  on the  Company's
consolidated financial statements.

Other  accounting  standards  that have been  issued or  proposed by the FASB or
other standards-setting  bodies that do not require adoption until a future date
are not  expected  to  have a  material  impact  on the  consolidated  financial
statements upon adoption.

ITEM 3.     CONTROLS AND PROCEDURES

     Our  principal  executive  officer  and  our  principal  financial  officer
evaluated  the  effectiveness  of our  disclosure  controls and  procedures  (as
defined in Rules  13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of
1934, as amended) as of the end of the period  covered by this report.  Based on
this evaluation,  our principal  executive  officer and our principal  financial
officer  have  concluded  that our  controls  and  procedures  are  effective in
providing  reasonable assurance that the information required to be disclosed in
this report has been recorded, processed,  summarized and reported as of the end
of the period covered by this report.

     During the period  covered by this report,  there have not been any changes
in our  internal  controls  or, to our  knowledge,  in other  factors that could
materially affect our internal controls.


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

None

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

None

ITEM 3.    DEFAULTS IN SENIOR SECURITIES

None

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

None

ITEM 5.     OTHER INFORMATION

None


                                       24
<PAGE>


ITEM 6.     EXHIBITS

              (a)  Exhibits

 Exhibit No.                  Description

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

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

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

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


                                       25
<PAGE>

                                   SIGNATURES

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

                                   HERITAGE WORLDWIDE, INC.
                                            (Registrant)

Date:  May  14 , 2007              By: /s/   Jean Claude Mas
                                     -----------------------
                                             Jean Claude Mas
                                             Chairman of the Board and
                                             Chief Executive Officer


                                   By: /s/ Claude Couty
                                     -----------------------
                                           Claude Couty
                                           Chief Financial Officer and
                                           General Manager