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 December 31, 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 February 7, 2005 was 17,410,299.

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

<PAGE>

                            HERITAGE WORLDWIDE, INC.
                         QUARTERLY REPORT ON FORM 10-QSB
                                December 31, 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 December 31,2004(Unaudited)..................................F1
      Consolidated Statements of Operations (Unaudited)
      For the Three and Six Months Ended December 31, 2004 and 2003......F2
      Consolidated Statements of Cash Flows (Unaudited)
      For the Three and Six Months Ended December 31, 2004 and 2003......F3

      Notes to Consolidated Financial Statements.........................F4-F13

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

      Item 3 - Control and Procedures....................................16

PART II - OTHER INFORMATION

      Item 1 - Legal proceedings.........................................17


      Item 6 - Exhibits..................................................17





<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 December 31, 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
                                December 31, 2004
                                   (Unaudited)


                                     ASSETS
Current Assets:
  Cash                                                          $       546,662
  Accounts receivable, net of an allowance for
   doubtful accounts of $ 2,255,619                                   3,297,046
  Inventories                                                         3,424,185
  Prepaid expenses and other current assets                             837,261
                                                                ----------------

     Total current assets                                             8,105,154

Property and equipment, net of accumulated
 depreciation of $3,627,666                                           1,903,483
Goodwill                                                              1,131,710
Investment in SCI Lucas                                                 536,962
Other assets                                                            277,144
                                                                ----------------

     Total assets                                               $    11,954,453
                                                                ================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Lines of credit                                               $     1,134,404
  Accounts payable and accrued expenses                               4,418,777
  Current portion of long term debt                                     138,466
  Due to related parties                                                 69,715
  Warranty reserve                                                      403,726
                                                                ----------------

     Total current liabilities                                        6,165,088

Convertible debentures and related accrued interest
 payable, net of discount of $2,192,760                               1,887,336
Long term debt, net of current portion                                  410,028
                                                                ----------------

     Total liabilities                                                8,462,452
                                                                ----------------


Minority interest                                                       820,098
                                                                ----------------


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                                          5,686,193
  Subscriptions receivable                                              (11,977)
  Accumulated other comprehensive income (foreign currency
   translation adjustment)                                            1,881,650
  Accumulated deficit                                                (4,901,373)
                                                                ----------------

     Total stockholders' equity                                       2,671,903
                                                                ----------------


     Total liabilities and stockholders' equity                 $    11,954,453
                                                                ================




            See Notes to Unaudited Consolidated Financial Statements.
                                      -F1-

<PAGE>

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

<TABLE>
<CAPTION>

                                          For the Three-Month Period Ended        For the Six-Month Period Ended
                                                   December 31,                            December 31,
                                           ------------------------------          -----------------------------
                                               2004            2003                    2004            2003
                                           --------------  --------------          --------------  -------------
<S>                                        <C>             <C>                     <C>             <C>
Revenues                                   $   3,074,019   $   3,681,670           $   5,957,741   $  6,296,316

Cost of revenues                               1,602,355       2,589,689               2,873,773      3,764,499
                                           --------------  --------------          --------------  -------------

     Gross profit                              1,471,664       1,091,981               3,083,968      2,531,817
                                           --------------  --------------          --------------  -------------
Operating expenses:
  Selling, general and administrative          1,050,220       2,022,972               2,072,622      2,950,773
  Write-down of inventories                            -         458,410                       -        458,410
  Research and development                       255,810         419,732                 528,210        735,487
                                           --------------  --------------          --------------  -------------

     Total operating expenses                  1,306,030       2,901,114               2,600,832      4,144,670
                                           --------------  --------------          --------------  -------------

Income loss before other expenses and
     income taxes                                165,634      (1,809,133)                483,136     (1,612,853)
                                           --------------  --------------          --------------  -------------

Other expenses:
  Other income (expense)                         (20,439)         (1,625)                 (8,147)        (1,953)
  Gain (loss) in equity investment                24,236               -                  30,621              -
  Interest expense                              (157,678)        (57,790)               (315,060)       (91,991)
                                           --------------  --------------          --------------  -------------

     Total other expenses                       (153,881)        (59,415)               (292,586)       (93,944)
                                           --------------  --------------          --------------  -------------

Income (loss) before (provision for)
 benefit from income taxes                        11,753      (1,868,548)                190,550     (1,706,797)

  (Provision for) benefit from income taxes            -         425,017                       -        371,774
                                           --------------  --------------          --------------  -------------

Net income (loss) before minority interest        11,753      (1,443,531)                190,550     (1,335,023)

Minority interest                                   (791)              -                  (9,934)             -
                                           --------------  --------------          --------------  -------------

Net income (loss)                                 10,962      (1,443,531)                180,616     (1,335,023)

Other comprehensive income, net of taxes
  Foreign currency translation adjustment        273,444         501,600                 463,202        119,103
                                           --------------  --------------          --------------  -------------

     Comprehensive income (loss)           $     284,406   $    (941,931)          $     643,818   $ (1,215,920)
                                           ==============  ==============          ==============  =============

Basic and diluted net income (loss) per
 common share                              $        0.00   $       (0.09)          $        0.01   $      (0.08)
                                           ==============  ==============          ==============  =============

Basic weighted average common
shares outstanding                            17,410,299      16,821,718              17,410,299     16,516,692
                                           ==============  ==============          ==============  =============

</TABLE>



            See Notes to Unaudited Consolidated Financial Statements.
                                      -F2-



<PAGE>

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


                                                For the Six-Month Period Ended
                                                       December 31,
                                                ----------------------------
                                                    2004           2003
                                                -------------  -------------

Cash flows from operating activities:
Net income (loss)                               $    180,616   $ (1,335,023)
Adjustments to reconcile net income (loss) to
 net cash (used in) provided by operating
 activities:
   Interest expense related to debenture
    discount                                         197,759         22,740
   Depreciation and amortization                     115,681        303,300
   Provision for doubtful accounts                  (283,778)       818,197
   Provision for obsolete inventories                      -        565,012
   Deferred income tax                                     -       (360,885)
   Loss on disposition of property and equipment         989              -
  Gain on equity investment                          (30,621)             -
   Minority interest                                   9,934              -
Change in operating assets and liabilities:
   Accounts receivable                               861,549     (1,486,525)
   Inventories                                      (253,309)      (558,820)
   Prepaid expenses and other current assets          19,804          2,489
  Accrued interest on convertible debentures          47,484              -
   Provision for customer warranty                    38,106         72,055
   Accounts payable and accrued expenses            (556,154)       774,019
                                                -------------  -------------

Net cash (used in) provided by operating
 activities                                          348,060     (1,183,441)
                                                -------------  -------------

Cash flows from investing activities:
   Proceeds from disposition of property
    and equipment                                     51,006              -
   Purchases of property and equipment              (234,848)      (161,791)
                                                -------------  -------------

Net cash used in investing activities               (183,842)      (161,791)
                                                -------------  -------------

Cash flows from financing activities:
   (Decrease) increase in lines of credit             78,708       (224,133)
   Proceeds from long term debt                       35,782              -
   Repayment of long term debt                      (162,502)      (160,473)
   Proceeds from sale of convertible debentures            -        500,000
   Proceeds from subscriptions receivable              2,541              -
   Proceeds from sale of common stock                      -      1,522,629
   Increase (decrease) in due to stockholders        218,330         (9,179)
                                                -------------  -------------

Net cash provided by financing activities            172,859      1,628,844
                                                -------------  -------------

Effect of exchange rate changes on cash               40,837         21,646
                                                -------------  -------------

Increase in cash                                     377,914        305,258

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

Cash, end of period                             $    546,662   $    412,322
                                                =============  =============

Supplemental disclosures of cash flow
 information:
     Cash paid during the year for interest     $     28,982   $     69,251
                                                =============  =============

     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 Unaudited Consolidated Financial Statements.
                                      -F3-

<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 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 - Restatement of Financial Statements

As part of its review of its financial statements and underlying assumptions,
management uncovered in September 2004 that it had inappropriately accounted for
its inventory since June 30, 2002. As part of its valuation of inventory, it has
imputed an erroneous direct labor rate to its inventory which resulted in an
overstatement of its inventory by approximately $2,600,000 and $1,480,000 as of
June 30, 2003 and 2002 respectively. Additionally, management has incorrectly
accounted for this error in its financial statements for the period ended
December 31, 2003 and March 31, 2004, as a change in estimate in 2004 while it
should have accounted for it as a correction of an error in the appropriate
prior periods. The correction of this error results in the reduction of
inventory and a corresponding reduction in the provision for obsolete inventory
of approximately $2.9 million as of December 31, 2003. There is no impact on the
stockholders' equity as of December 31, 2003 and 2004, respectively.
Additionally, the correction of this error results in a decrease in write-down
of inventories and in net loss of approximately $2.6 million during the
six-month period ended December 31, 2003. Accordingly, the Company will restate
its 2003 and 2002 annual financial statements as well as its interim financial
statements from September 30, 2002 through March 31, 2004.

NOTE 3 - 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 six months ended December 31, 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 six-month
period ended December 31, 2004 and 2003, respectively and OS MXM, Inc. ("OS")
from July 1, 2004 through December 31, 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 December 31, 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.

                                      -F4-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 4 - 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 will differ from those estimates. Significant estimates
during the periods include the allowance for doubtful accounts, reserve for
obsolete inventory, the useful life of property, plant and equipment, and the
accrual of product replacement and liability reserve.

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,

                                      -F5-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

"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 December 31, 2004, the exchange rate for the Euros (EUR) was $1.36US
for 1.00 EUR.

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

Inventories

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

New accounting pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151 "Inventory Costs". This Statement amends the guidance in ARB No. 43, Chapter
4, "Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). In
addition, this Statement requires that allocation of fixed production overhead
to the costs of conversion be based on the normal capacity of the production
facilities. The provisions of this Statement will be effective for the Company
beginning with its fiscal 2006. The Company is currently evaluating the impact
this new Standard will have on its operations, but believes that it will not
have a material impact on the Company's financial position, results of
operations or cash flows.

                                      -F6-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In December 2004, the FASB issued SFAS 153 "Exchanges of Nonmonetary Assets - an
amendment of APB Opinion No. 29. This Statement amended APB Opinion 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. A non-monetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The adoption of this Standard is not
expected to have any material impact on the Company's financial position,
results of operations or cash flows.

In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based Payment".
This Statement requires that the cost resulting from all share-based
transactions be recorded in the financial statements. The Statement establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The Statement replaces SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for
Stock Issued to Employees". The provisions of this Statement will be effective
for the Company beginning with its fiscal 2007. The Company is currently
evaluating the impact this new Standard will have on its financial position,
results of operations or cash flows.

Product Replacement Program

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 replacement 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 5 - 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 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

                                      -F7-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 5 - CONVERTIBLE DEBENTURES (continued)

debenture amountingto $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 six-month period ended December 31, 2004, approximately $198,000 of the
recorded debt discount has been amortized to interest expense.

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.

                                      -F8-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 6 - PROMISSORY NOTE

Effective March 31, 2004, concurrent with an amended distribution agreement, the
Company issued to a distributor a revolving promissory note for certain sums to
come due to Medicor based on Medicor's and the manufacturer's administration of
product replacement claims. The note bears interest at the rate of 6.75% per
annum. The principal amount under the note as of December 31, 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 replacement 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 December 31, 2004.

NOTE 7 - 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 expire or terminate 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.

                                      -F9-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)
NOTE 8 - 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.

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. A motion by PIP/USA and Mr. Mas to recover their
attorneys' fees is pending in the trial court, as is a motion to disqualify the
Plaintiffs' counsel in that lawsuit. Case No. 00-14665-CA-01 by Steven Kwartin
remains pending. In June of 2003, Robert and Nina Kwartin commenced a lawsuit
assigned Case No. 03-15006. That lawsuit remains pending. In September of 2003,
Saul and Ruth Kwartin filed another lawsuit assigned Case No. 0322537-CA-27,
alleging similar claims to those included in the dismissed case. Within a day or
two of that lawsuit, Steven Kwartin filed his second lawsuit assigned Case No.
03-15006-CA-09, against Mr. Mas and Donald McGhan only. 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.

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. A motion seeking to dismiss filed by PIP .America remains pending. Our
U.S. distributor has tendered this case to PIP, for defense and indemnity
pursuant to the distributor agreement.

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. PIP has filed an answer to the

                                     -F10-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 8 - LEGAL CONTINGENCIES (continued)

complaint, and discovery is ongoing. Our distributor has settled the action
against it, and had previously 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 settled the lawsuit againt it. PIP.America
had, prior to settling, tendered this case to Poly Implant Prostheses, S.A., for
defense and indemnity.

PIP and PIP .America were sued by a woman named Alice Holt in the Circuit Court
of Lake County, Illinois in May of 2003 for alleged product liability and other
related claims. PIP denies any liability to the Plaintiff and has answered the
Complaint and asserted affirmative defenses.

Heritage Worldwide, Inc. and PIP and other defendants were sued by a woman named
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.

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

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 and distributed by PIP.America with a product replacement
program in place. 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.

                                     -F11-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 8 - LEGAL CONTINGENCIES (continued)

Other than certain of its own product replacement claims that it is
administering, PIP.America is indemnified by PIP/USA, Inc., Poly Implants
Protheses, S.A., and Jean Claude Mas, personally, from all claims, including
those asserted above. As a result, the Company believes the costs associated
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 December 31, 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 replacement claims. Litigation,
particularly product liability litigation, can be expensive and disruptive to
normal business operations and the results of complex legal proceedings can be
very difficult to predict. Claims against the Company or its subsidiaries have
been and are periodically reviewed with counsel in the ordinary course of
business. The Company presently believes it or its subsidiaries have meritorious
defenses in all lawsuits in which the Company or any of its subsidiaries are
defendants, subject to the subsidiaries' continuing product replacement
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 9 - 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 10 - LINES OF CREDIT

The Company entered into lines of credit agreements with two financial
institutions up to the aggregate amount of approximately $1,560,000. The Company
has used approximately $1.1 million under such lines of credit at December 31,
2004. The lines of credit bear interest at the EURIBOR rate plus 0.50% per annum
(2.867% at December 31, 2004). The outstanding principal balance plus any
interest is payable on demand and is secured by accounts receivables of
approximately $700,000, inventories of approximately $1.2 million, and a
personal guarantee of the Company's Chief Executive Officer of approximately
$270,000.

                                     -F12-

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004
                                   (Unaudited)

NOTE 11 - DUE TO SHAREHOLDERS

One of the Company's shareholder advanced approximately $160,000 to the Company
during the six-month period ended December 31, 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 six-month
period ended December 31, 2004. This capital infusion is accounted for as
minority interest in the accompanying balance sheet. The remaining amounts due
at December 31, 2004 consists of operating expenses paid on behalf of the
Company by the shareholders.

NOTE 12 - SUBSEQUENT EVENTS

In January 2005, the Company and Eurofortune S.A.("Eurofortune"), an affiliate
of the Company, reached a verbal understanding with HEM, whereby Eurofortune
would purchase for $1,048,897, the three debentures issued to HEM on October 9,
2003. See Note 4 to these Notes to the Unaudited Consolidated Financial
Statements. Contemporaneously with Eurofortunes' purchase of the three
debentures from HEM, the debentures would be exchanged with the Company for two
debentures each having an aggregate principal amount of $500,000. The conversion
prices of the debentures would be fixed at $1.25 and $1.56. The shares of the
Company's common stock issuable upon conversion of the debentures would be
restricted shares and could only be sold publicly in accordance with Rule 144
under the Securities Act of 1933, unless the shares are registered with the
Securities and Exchange Commission. All other material terms of the new
debentures will be the same as the original debentures. The completion of these
transactions is subject to the negotiation of definitive agreements.
Accordingly, there can be no assurance that the transactions will be completed.
















                                     -F13-

<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>

                                       For the           Increase/  Increase/          For the              Increase/ Increase/
                               Three-Month Period ended (Decrease  (Decrease)   Six-Month Period Ended     (Decrease  (Decrease)
                                    December 31,          2004 vs    2004 vs          December 31,           2004 vs   2004 vs
                               ------------------------    2003        2003     -------------------------     2003      2003
                                  2004         2003          $          %          2004           2003         $         %
                               ----------- ----------------------------------   ------------ ---------------------------------
<S>                            <C>         <C>           <C>            <C>     <C>          <C>           <C>            <C>
Revenues                       $3,074,019  $  3,681,670  $   (607,651) -16.5%   $ 5,957,741  $ 6,296,316   $ (338,575)   -5.4%

Cost of revenues                1,602,355     2,589,689      (987,334) -38.1%     2,873,773    3,764,499     (890,726)  -23.7%
                               ----------- ----------------------------------   ------------ ---------------------------------

     Gross profit               1,471,664     1,091,981       379,683   34.8%     3,083,968    2,531,817      552,151    21.8%
                               ----------- ----------------------------------   ------------ ---------------------------------

Operating expenses:
  Selling, general and
   administrative               1,050,220     2,022,972      (972,752) -48.1%     2,072,622    2,950,773     (878,151)  -29.8%
  Write-down of inventories             -       458,410      (458,410)  NM                -      458,410     (458,410)   NM
  Research and development        255,810       419,732      (163,922) -39.1%       528,210      735,487     (207,277)  -28.2%
                               ----------- ----------------------------------   ------------ ---------------------------------

     Total operating expenses   1,306,030     2,901,114    (1,595,084) -55.0%     2,600,832    4,144,670   (1,543,838)  -37.2%
                               ----------- ----------------------------------   ------------ ---------------------------------

Income (loss) before other
 expenses and income taxes        165,634    (1,809,133)    1,974,767 -109.2%       483,136   (1,612,853)   2,095,989  -130.0%
                               ----------- ----------------------------------   ------------ ---------------------------------

Other expenses:
  Other expense                   (20,439)       (1,625)     (18,814)   NM           (8,147)      (1,953)      (6,194)   NM
  Loss in equity investment        24,236             -       24,236    NM           30,621            -       30,621    NM
  Interest expense               (157,678)      (57,790)     (99,888)  172.8%      (315,060)     (91,991)    (223,069)  242.5%
                               ----------- ----------------------------------   ------------ ---------------------------------

     Total other expenses        (153,881)      (59,415)     (94,466)  159.0%      (292,586)     (93,944)    (198,642)  211.4%
                               ----------- ----------------------------------   ------------ ---------------------------------

Income (loss) before (provision
 for) benefit from income taxes    11,753    (1,868,548)   1,880,301  -100.6%       190,550   (1,706,797)   1,897,347  -111.2%

  (Provision for) benefit from
   income taxes                         -       425,017     (425,017) -100.0%             -       371,774    (371,774) -100.0%
                               ----------- ----------------------------------   ------------ ---------------------------------

 Income (loss) before minority
  interest                         11,753    (1,443,531)   1,455,284  -100.8%       190,550    (1,335,023)  1,525,573  -114.3%

Minority interest                    (791)            -         (791)   NM           (9,934)            -      (9,934)   NM
                               ----------- ----------------------------------   ------------ ---------------------------------

Net income (loss)              $   10,962  $ (1,443,531) $ 1,454,493  -100.8%   $   180,616  $ (1,335,023) $1,515,639  -113.5%
                               =========== ==================================   ============ =================================
</TABLE>

NM: not meaningful

Six Months Ended December 31, 2004 Compared with Six Months Ended December 31,
2003

                                       4

<PAGE>
                                    Revenues

Revenues consist primarily of the sale of breast implants and other body support
products. The decrease in revenues during the six-month period ended December
31, 2004 when compared to the prior year period is primarily attributable to
decreased volume of breast implants sold to customers in France. This decrease
is due to a lower number of sales representatives focusing on the French market
during the six-month period ended December 31, 2004 when compared to the prior
year period.

                                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 six-month period ended December 31,
2004 by 12% to 52%, 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 six-month period ended December 31, 2004 by
approximately $600,000 when compared to the prior year period. The increase is
primarily attributable to higher productivity from direct labor offset by
decreased sales of breast implants in the French market.

                   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 decrease in selling,
general and administrative expenses during the six-month period ended December
31, 2004 when compared to the prior year period is primarily due to higher
provisions for doubtful accounts recorded during the six-month period ended
December 31, 2003 of approximately $800,000 related to increased exposure by the
Company on distributors located outside of France with riskier financial
conditions.

                            Write-down of inventories

Write-down of inventories consist of periodic write-downs we provide for an
allowance for obsolete inventories items during interim periods. The decrease in
write-down of inventories during the six-month period ended December 31, 2004
when compared to the prior period is primarily due to a significant write-down
of inventories during the six month period ended December 31, 2003 for obsolete
items. No such write-downs were recorded during the six-month period ended
December 31, 2004.

                            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 six-month period ended December 31, 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 six-month period ended December 31, 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 six-month period ended December 31, 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.

                                       5

<PAGE>

                            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 six-month period
ended December 31, 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 six-month period ended December 31, 2004, we have generated cash
flows from operating activities of approximately $350,000, most of which
resulted from our net income adjusted for amortization of debt discount of
$380,000. Our provision for doubtful accounts, accounts receivables, and
accounts payable decreased by approximately $280,000, $860,000 and $560,000,
respectively, while our inventories increased by approximately $250,000.
Additionally, we have incurred approximately $235,000 in capital expenditures.
We have also increased our working capital by receiving approximately $210,000
from Milo Finance SA, one of our shareholders, and have received proceeds from
the issuance of long-term debt and lines of credit of approximately $110,000. We
have also made repayments on the principal of our long-term debt of
approximately $160,000.

During the six-month period ended December 31, 2003, we used approximately
$1,180,000 in our operating activities, mostly from incurring a loss of
approximately $1,335,000. Our accounts receivable, provision for doubtful
accounts, inventories, provision for obsolete inventories, and accounts payable
increased by approximately $1,490,000, $820,000, $560,000, $560,000, and
$770,000, respectively. We had incurred capital expenditures of approximately
$160,000. Our operating and investing activities were funded by the issuance of
shares of common stock and convertible debentures generating proceeds of
approximately $1,520,000 and $500,000 respectively. We have used such proceeds
to make repayments on our long-term debt and lines of credit of approximately
$160,000 and $220,000, respectively.

Going Concern

As reflected in the accompanying consolidated financial statements as of
December 31, 2004, we had an accumulated deficit of approximately $4.9 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.

New Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151 "Inventory Costs". This Statement amends the guidance in ARB No. 43, Chapter
4, "Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). In
addition, this Statement requires that allocation of fixed production overhead
to the costs of conversion be based on the normal capacity of the production
facilities. The provisions of this Statement will be effective for the Company
beginning with its fiscal 2006. The Company is currently evaluating the impact
this new Standard will have on its operations, but believes that it will not
have a material impact on the Company's financial position, results of
operations or cash flows.

                                       6

<PAGE>

In December 2004, the FASB issued SFAS 153 "Exchanges of Nonmonetary Assets - an
amendment of APB Opinion No. 29. This Statement amended APB Opinion 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. A non-monetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The adoption of this Standard is not
expected to have any material impact on the Company's financial position,
results of operations or cash flows.

In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based Payment".
This Statement requires that the cost resulting from all share-based
transactions be recorded in the financial statements. The Statement establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The Statement replaces SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for
Stock Issued to Employees". The provisions of this Statement will be effective
for the Company beginning with its fiscal 2007. The Company is currently
evaluating the impact this new Standard will have on its financial position,
results of operations or cash flows.

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 December 31, 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.

                                       7

<PAGE>

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
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.

                                       8

<PAGE>

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.

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

                                       9

<PAGE>

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

                                       10

<PAGE>

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.

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

                                       11

<PAGE>

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.

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.

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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:

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.

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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 December 31,
2004, we had approximately $1 million of goodwill. We review 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. 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.

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<PAGE>

IF WE FAIL TO MANAGE OUR OPERATIONS OR FAIL TO CONTINUE TO EFFECTIVELY CONTROL
EXPENSES, OUR REVENUES, RESULTS 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

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<PAGE>

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.

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

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<PAGE>

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

During the quarter ended December 31, 2004, the Company was informed of the
following two proceedings :

Heritage Worldwide, Inc. and PIP and other defendants were sued by a woman named
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.

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



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.

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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.


                                   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



Signatures                           Title                   Date
------------------------------      -----------------       ---------------

/s/   Alain Sereyjol-Garros          Chief Executive       February 9, 2005
------------------------------       Officer
      Alain Sereyjol-Garros


/s/ Claude Couty                     Chief Financial       February 9, 2005
------------------------------       Officer
    Claude Couty