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

                                   FORM 10-QSB

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

                For the quarterly period ended December 31, 2006

                                       or

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

         For the transition period from ____________ to ________________

                       Commission file number: [000-28277]

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

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


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

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


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

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

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

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

                                       1

<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


         To the extent that the information presented in this Quarterly Report
on Form 10-QSB for the quarter ended December 31, 2006 discusses financial
projections, information or expectations about our products or markets, or
otherwise makes statements about future events, such statements are
forward-looking. We are making these forward-looking statements in reliance on
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Although we believe that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These risks and uncertainties
are described, among other places in our 2006 Annual Report of Form 10KB, in
"Management's Discussion and Analysis or Plan of Operation."

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

                                       2

<PAGE>

                  HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEET
                             December 31, 2006
                                (Unaudited)
<TABLE>
<CAPTION>

                                   ASSETS
Current Assets:
<S>                                                                               <C>
  Cash                                                                            $    129,070
  Accounts receivable, net of an allowance for doubtful accounts of $ 479,303
    and allowance for product returns of $110,703                                    7,178,287
  Inventories                                                                        4,134,740
  Due from a related party                                                              77,413
  Prepaid expenses and other current assets                                            561,961
                                                                                 --------------
     Total current assets                                                           12,081,471

Property and equipment, net of accumulated depreciation of $3,247,999                2,086,306
Goodwill                                                                             1,154,666
Investment in SCI Lucas                                                                638,086
Other assets                                                                           173,030
                                                                                 --------------
     Total assets                                                                 $ 16,133,559
                                                                                 ==============
                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Lines of credit                                                                 $  1,776,573
  Accounts payable and accrued expenses                                              4,545,790
  Current portion of long term debt                                                    211,257
  Current portion of capitalized lease obligations                                     215,798
  Reserve for product replacements                                                     593,949
                                                                                 --------------
     Total current liabilities                                                       7,343,364

Convertible debentures, net of discount of $862,127                                  2,137,873
Convertible debentures and related accrued interest payable,
  net of discount of $138,999-related party                                            892,083
Capitalized lease obligations, net of current portion                                  446,447
Long term debt, net of current portion                                                 515,170
                                                                                 --------------
     Total liabilities                                                              11,334,937
                                                                                 --------------
Minority interest                                                                      928,894
                                                                                 --------------
Stockholders' Equity:
  Common stock; $.001 par value, 50,000,000 shares authorized,
    40,160,299 issued and 17,410,299 outstanding                                        17,411
  Additional paid in capital                                                         5,969,234
  Accumulated other comprehensive income                                             2,223,872
  Accumulated deficit                                                               (4,340,792)
                                                                                 --------------
     Total stockholders' equity                                                      3,869,728
                                                                                 --------------
     Total liabilities and stockholders' equity                                   $ 16,133,559
                                                                                 ==============

</TABLE>

         See Notes to Unaudited Consolidated Financial Statements.
                                       3

<PAGE>

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

                                              For the six-month period ended  For the three-month period ended
                                                      December 31,                    December 31,
                                              ---------------------------     ---------------------------
                                                  2006          2005             2006           2005
                                              -------------  ------------     -----------    ------------
<S>                                            <C>           <C>              <C>            <C>
Revenues                                        $ 4,381,744   $ 3,324,361     $ 7,769,470     $ 6,346,753

Cost of revenues                                  1,422,331     1,041,895       3,509,652       2,640,067
                                              -------------  ------------     -----------    ------------

     Gross profit                                 2,959,413     2,282,466       4,259,818       3,706,686
                                              -------------  ------------     -----------    ------------
Operating expenses:
  Selling, general and administrative             3,014,960     1,754,449       3,888,391       2,693,638
  Research and development                          243,171       269,715         719,903         521,612
                                              -------------  ------------     -----------    ------------
     Total operating expenses                     3,258,131     2,024,164       4,608,294       3,215,250
                                              -------------  ------------     -----------    ------------

Operating (loss) income                           (298,718)       258,302       (348,476)         491,436
                                              -------------  ------------     -----------    ------------
Other expenses:
  Gain (loss) in equity investment                  (6,467)         4,167           8,145          20,495
  Other expense                                        -           17,078             -               -
  Interest expense-related party                   (30,205)           -          (86,268)             -
  Interest expense                                (237,165)     (159,676)       (333,963)       (322,622)
                                              -------------  ------------     -----------    ------------
     Total other expenses                         (273,837)     (138,431)       (412,086)       (302,127)
                                              -------------  ------------     -----------    ------------
 (Loss) income before provision for
    income taxes                                  (572,555)       119,871       (760,562)         189,309

  Benefit (provision) for income taxes               15,638           -               -               -
                                              -------------  ------------     -----------    ------------
(Loss) income before minority interest            (556,917)       119,871       (760,562)         189,309

Minority interest                                    27,832      (18,941)          13,362        (30,561)
                                              -------------  ------------     -----------    ------------
Net (loss) income                                 (529,085)       100,930       (747,200)         158,748

Other comprehensive income, net of taxes
  Foreign currency translation adjustment           299,765     (330,909)         391,891       (360,221)
                                              -------------  ------------     -----------    ------------
     Comprehensive (loss)                       $ (229,320)   $ (229,979)     $ (355,309)     $ (201,473)
                                              =============  ============     ===========    ============
Basic net (loss) income per common share           $ (0.03)        $ 0.01        $ (0.04)          $ 0.01
                                              =============  ============     ===========    ============
Basic weighted average common
shares outstanding                               17,410,299    17,410,299      17,410,299      17,410,299
                                              =============  ============     ===========    ============

Diluted net (loss) income per share                $ (0.03)        $ 0.01        $ (0.04)          $ 0.01
                                              =============  ============     ===========    ============
Diluted weighted average common shares           17,410,299    17,449,390      17,410,299      17,436,228
outstanding
                                              =============  ============     ===========    ============
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.
                                       4

<PAGE>
                  HERITAGE WORDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                      For the six-month period
                                                         ended December 31,
                                                    ------------------------------
                                                        2006            2005
                                                    --------------  --------------

Cash flows from operating activities:
<S>                                                    <C>              <C>
Net income (loss)                                      $ (747,200)      $ 158,748
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
   Interest expense related to debenture discount         254,630         298,406
   Depreciation and amortization                          298,767         248,250
   Fair value of options                                  158,666               -
   Provision for doubtful accounts                         (7,682)       (293,597)
   Provision for returns                                  (90,820)              -
   Gain on equity investment                               (8,145)        (20,495)
   Minority interest                                      (13,362)         30,561
Change in operating assets and liabilities:
   Accounts receivable                                    261,487         (58,814)
   Inventories                                           (106,897)        (50,824)
   Prepaid expenses and other current assets              (28,810)         46,328
  Other assets                                            165,056               -
   Provision for product replacements                      28,231        (125,864)
   Accounts payable and accrued expenses                 (820,799)        (56,533)
                                                    --------------  --------------
Net cash provided by (used in) operating activities      (656,878)        176,166
                                                    --------------  --------------
Cash flows from investing activity:

   Purchases of property and equipment                   (175,477)       (129,996)
                                                    --------------  --------------
Net cash used in investing activities                    (175,477)       (129,996)
                                                    --------------  --------------
Cash flows from financing activities:
   (Decrease) increase in lines of credit                 606,363        (274,464)
   Proceeds from long term debt                            35,471         131,798
   Repayment of long term debt                           (267,395)        (97,050)
   Repayment of capitalized lease obligations             (84,890)              -
   Increase (decrease) in due to related parties                -         (43,466)
                                                    --------------  --------------

Net cash provided by (used in) financing activities       289,549        (283,182)
                                                    --------------  --------------

Effect of exchange rate changes on cash                   (23,633)         (3,540)
                                                    --------------  --------------
Decrease in cash                                         (566,439)       (240,552)

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

Cash, end of period                                     $ 129,070       $ 201,431
                                                    ==============  ==============
Supplemental disclosures of cash flow information:
     Cash paid during the period for interest           $ 159,024       $ 102,019
                                                    ==============  ==============
     Cash paid during the period for taxes              $       -       $       -
                                                    ==============  ==============

</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.
                                       5

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 1 - NATURE OF BUSINESS AND ACQUISITION

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

NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six-months ended December 31, 2006 are not necessarily
indicative of the results that may be expected for the fiscal year ending June
30, 2007. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2006.

The accompanying consolidated financial statements present the results of
operations of the Company's French and Spanish subsidiaries for the three-month
and six-month periods ended December 31, 2006 and 2005. All material
inter-company accounts and transactions between the Company and its subsidiaries
have been eliminated in consolidation.

The accompanying consolidated financial statements include the results of
operations of SCI Lucas, a real estate holding company, in which the Company
holds an interest of 38.05%. SCI Lucas owns the production facility and
headquarters in which the Company operates in Southern France. The results of
operations of SCI Lucas are accounted for using the equity method of accounting.
All material inter-company accounts and transactions between the Company and SCI
Lucas have been eliminated.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

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

Cash and Cash Equivalents

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

                                       6

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable

Accounts receivable are reported at net realizable value. The Company has
established an allowance for doubtful accounts based upon factors pertaining to
the credit risk of specific customers, historical trends, and other information.
Delinquent accounts are written-off when it is determined that the amounts are
uncollectible. At December 31, 2006, the allowance for doubtful accounts was
approximately $479,000. Additionally, the Company has established an allowance
for product returns based upon factors pertaining to historical trends,
including, among other things, recent and historical return rates for both
specific products and distributors, the impact of any new product releases in a
new jurisdiction and projected economic conditions. At December 31, 2006, the
provision for product returns was approximately $111,000.

Revenue recognition

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

From time to time, the Company enters into bill and hold arrangements. None of
them were outstanding at December 31, 2006. Such bill and hold arrangements meet
the following criteria for revenue recognition:

o The risks of ownership have passed to the buyer;

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

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

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

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

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

o The breast implants were complete and ready for shipment;

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

o The pattern of bill and hold transactions, are consistent with the Company's
  past experiences;

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

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

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

                                       7

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

In November 2005, the FASB issued FASB Staff Position FAS123(R)-3, Transition
Election to Accounting for the Tax Effects of Share-Based Payment Awards, (the
"FSP"). This FSP requires an entity to follow either the transition guidance for
the additional-paid-in-capital pool as prescribed in SFAS No. 123R or the
alternative transition method as described in the FSP. An entity that adopts
SFAS No. 123R using the modified prospective method may make a one-time election
to adopt the transition method described in this FSP. An entity may take up to
one year from the later of its initial adoption of SFAS No. 123R or the
effective date of this FSP to evaluate its available transition alternatives and
make its one-time election. This FSP became effective in November 2005. The
Company is still evaluating whether it will adopt the alternative method for
calculating its additional-paid-in-capital pool described in the FSP.

                                       8

<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Pro Forma Information Under SFAS No. 123 for Periods Prior to January 1, 2006
The following table illustrates the effect on net earnings and earnings per
share if the Company had applied the fair value recognition provisions of SFAS
No. 123 to stock-based awards for the six-month period ended December 31, 2006
and 2005:

<TABLE>
<CAPTION>

                                                                                Six-month               Six-month
                                                                                 period                  period
                                                                                 ended                   ended
                                                                                December                December
                                                                                31, 2006                31, 2005
                                                                               -------------          ------------
Net (loss) income:
<S>                                                                            <C>                     <C>
As reported                                                                    $ (747,200)             $ 158,748
Add: Total stock-based employee compensation included in net income
as reported, net of related tax effects                                                 -                      -
Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax
effects                                                                                (-)              (124,376)
                                                                               -------------           ------------

Pro forma                                                                      $ (747,200)             $  34,372
                                                                               =============           ============
Basic earnings per share:
As reported                                                                    $    (0.04)             $    0.01
                                                                               =============           ============
Pro forma                                                                      $    (0.04)             $    0.00
                                                                               =============           ============
Diluted earnings per share:
As reported                                                                    $    (0.04)             $    0.01
                                                                               =============           ============
Pro forma                                                                      $    (0.04)             $    0.00
                                                                               =============           ============
</TABLE>

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

                                       9

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

As of December 31, 2006, the unrecognized compensation costs related to
non-vested awards amounted to approximately $362,000, which will be recognized
over the following 18 months.

The Company recognized a compensation expense of approximately $159,000 during
the six-month period ended December 31, 2006 in connection with all options
outstanding during that period.

Foreign currency translation

For foreign operations with the local currency as the functional currency,
assets and liabilities are translated from the local currencies into U.S.
dollars at the exchange rate prevailing at the balance sheet date. Revenues,
expenses and cash flows are translated at the average exchange rate for the
period to approximate translation at the exchange rate prevailing at the dates
those elements are recognized in the financial statements. Translation
adjustments resulting from the process of translating the local currency
financial statements into U.S. dollars are included in determining comprehensive
loss. As of December 31, 2006, the exchange rate for the Euros (EUR) was $1.32
U.S. for 1.00 EUR.

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

Inventories

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

Property and Equipment

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

                                       10

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill

Goodwill represents the excess of costs over fair value of assets of businesses
acquired. In June 2001, the Financial Accounting Standards Board ("FASB")
approved the issuance of Statement of Financial Accounting Standards ("SFAS")
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets." The new standards require that all business combinations
initiated after December 31, 2001 be accounted for using the purchase method. In
addition, all intangible assets acquired that are obtained through contractual
or legal right, or are capable of being separately sold, transferred, licensed,
rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to
amortization, but will be subject to at least an annual assessment for
impairment by applying a fair value based test. The Company's goodwill at
December 31, 2006 results from its 2002 acquisition of its Spain subsidiary.
Management has established that based on future cash flows generated from its
Spain's operations, the Company's goodwill at December 31, 2006 is not impaired.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered. In such circumstances, the Company will estimate the future
cash flows expected to result from the use of the asset and its eventual
disposition. Future cash flows are the future cash inflows expected to be
generated by an asset less the future outflows expected to be necessary to
obtain those inflows. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, the
Company will recognize an impairment loss to adjust to the fair value of the
asset. At December 31, 2006, the Company believes that there has been no
impairment of its long-lived assets.

Investment

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

Income Taxes

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

Shipping and Handling Costs

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

                                       11

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Research and Development

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

Income (Loss) per Share

The Company presents basic income (loss) per share and, if appropriate, diluted
earnings per share in accordance with the provisions of SFAS No. 128 "Earnings
per Share" ("SFAS 128"). Under SFAS 128, basic net income (loss) per share is
computed by dividing the net income (loss) for the year by the weighted average
number of common shares outstanding during the year. Diluted net income per
share is computed by dividing the net income for the year by the weighted
average number of common shares and common share equivalents outstanding during
the year. The Company has 1,125,000 options outstanding at December 31, 2006.
Additionally, the Company may have to issue up to 2,220,512 shares upon
conversion of certain convertible debentures, including those exchanged during
September 2005. The weighted average amount of common stock equivalents included
in the six-month period ended December 31, 2006 and 2005 dilutive earnings per
share amounts to 0 and 25,929, respectively. All other common stock equivalents
are antidilutive.

Fair Value of Financial Instruments

The carrying amounts of financial instruments, including cash, accounts
receivable, lines of credit and accounts payable and accrued expenses
approximate fair value at December 31, 2006 because of the relatively short
maturity of the instruments. The carrying value of capitalized lease
obligations, long-term debt, and convertible debentures approximate fair value
at December 31, 2006 based upon terms available for companies under similar
arrangements.

New Accounting Pronouncements

     In May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 154, "Accounting Changes and Error
Corrections" (FAS 154). FAS 154 replaces Accounting Principals Board Opinion No.
20 (APB 20) and Statement of Financial Accounting Standards No. 3 "Reporting
Accounting Changes in Interim Financial Statements", and applies to all
voluntary changes in accounting principle, and changes the requirements for
accounting for and reporting of a change in accounting principle. APB 20
previously required that most voluntary changes in accounting principle be
recognized by including in net income of the period of change a cumulative
effect of changing to the new accounting principle whereas FAS 154 requires
retrospective application

                                       12

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

to prior periods' financial statements of a voluntary change in accounting
principle, unless it is impracticable. FAS 154 enhances the consistency of
financial information between periods. FAS 154 will be effective beginning the
first quarter of our fiscal 2007. We do not expect the adoption of FAS 154 will
have a material impact on our financial position, results of operations, or cash
flows.

In September 2006, the FASB issued FASB Statement No. 157. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practices. This Statement is effective for
financial statements for fiscal years beginning after November 15, 2007. Earlier
application is permitted provided that the reporting entity has not yet issued
financial statements for that fiscal year. Management believes this Statement
will have no impact on the financial statements of the Company once adopted.

Provision for returns

In the normal course of business, the Company does not provide stock-balancing
or price protection rights to its distributors; however, on a non-recurring
basis, we have historically accepted product returns. The Company estimates its
provision for product returns to amount to approximately $111,000 at December
31, 2006. Management establishes provisions for estimated returns concurrently
with the recognition of revenue. The provisions are established based upon
consideration of a variety of factors, including, among other things, recent and
historical return rates for both specific distributors and projected economic
conditions.

Provision for Product Replacements

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

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and
cash equivalents and accounts receivable. The Company maintains accounts with
French financial institutions, which at times exceeds the insured French
statutory limit of approximately $150,000. The Company minimizes its credit
risks associated with cash by periodically evaluating the credit quality of its
primary financial institutions. The Company's accounts receivables are due from
surgeons in France and from distributors in all other countries in which it
markets its products. The Company does not require collateral to secure its
accounts receivables. However, the Company regularly insures a proportion of its
accounts receivable through a financial institution. At December 31, 2006, the
financial institution insured approximately $3.4 million of the Company's
accounts receivables. Two of the Company's customers accounted for approximately
18% and 10%, respectively, of its net accounts receivable at December 31, 2006.
No other customers accounted for more than 10% of its net accounts receivables.

                                       13

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Product Concentration Risk

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

Supplier Concentration Risk

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

Customers Concentration Risk

Two of the Company's customers accounted for 15% and 11%, respectively, of its
revenues during the six-month period ended December 31, 2006. Three of the
Company's customers accounted for 17%, 11%, and 10% of its revenues,
respectively, during 2005. The Company minimizes its concentration risk
associated with customers by diversifying its customer base and introducing its
products in new countries.

Reclassifications

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

NOTE 4 - INVENTORIES

Inventories at December 31, 2006 consist of the following:

Finished goods                 $ 2,703,435
Work-in-process                  1,041,852
Raw materials                      389,453
                              -------------
                               $ 4,134,740
                              =============


NOTE 5 - INVESTMENTS
At December 31, 2006, the Company has a 38.05% investment in SCI Lucas, a
related French real estate company. The equity in income of the investee
amounting to approximately $14,000 and $16,000 during the six-month periods
ended December 31, 2006 and 2005, respectively. SCI Lucas leases its facilities
to the Company, which is the sole tenant. The leases expire in November 2009.
The leases are renewable automatically unless the Company cancels the leases six
months prior to the renewal date. At December 31, 2006, the Company had a
non-interest bearing advance of approximately $77,000 owed by SCI Lucas. SCI
Lucas reimbursed approximately $28,000 during the six-month period ended
December 31, 2006 in connection with this advance. The Company incurred rental
expense and paid rent to SCI Lucas in amounts aggregating approximately $212,000
and $208,000 during the six-month periods ended December 31, 2006 and 2005,
respectively.

                                       14

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 6 - LONG TERM DEBT

The Company's long term debt consists of various notes payable with outstanding
principal amounts ranging from approximately $291,000 to $330,000, with variable
interest rates, based on the EURIBOR plus 1.6% to 3%, ranging from 4.77% to
6.17% per year at December 31, 2006, and due dates between April 2010 and
December 2012. In addition, the Company has received non-interest bearing
advances from ANVAR, an agency of the French government, which finances or
subsidizes certain research and development projects. If the research does not
result in a commercially feasible product and certain other conditions are met,
the Company will not have to repay some or all of the advances. The Company is
currently unable to determine whether the research associated with the advance
will result in a commercially feasible product and does not anticipate knowing
the outcome of such research efforts in the foreseeable future. Accordingly, the
Company includes the advances in the long-term portion of its debt.

NOTE 7 - CONVERTIBLE DEBENTURES

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

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

The convertible debentures initially issued to HEM contain an imbedded
beneficial conversion feature since the fair market value of the common stock
exceeds the most beneficial exercise price on the debenture issuance date. The
value was computed as $1,000,000, which will be amortized over the respective
term of the debentures. During the six-month periods ended December 31, 2006 and
2005, the amortization of the debt discount amounted to

                                       15

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 8 - CONVERTIBLE DEBENTURES (continued)

approximately $86,000 and $127,000, respectively, and has been included in
interest expense in the accompanying consolidated financial statements. Accrued
interest associated with the convertible debentures amounted to $31,082 at
December 31, 2006.

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

The difference between the face amount of the Debenture and the proceeds
generated from the shares received in exchange of the Debentures amounted to
approximately $1,580,000 and has been recorded as a debt discount. Such debt
discount is amortized over the term of the Debenture. During the six-month
period ended December 31, 2006 and 2005, the amortization of the debt discount
amounted to approximately $155,000 and $133,000, respectively, and has been
included in interest expense in the accompanying financial statements.

NOTE 9 - LINES OF CREDIT

The Company entered into lines of credit agreements with two financial
institutions up to the aggregate amount of approximately $4.9 million. The
Company has used approximately $1.8 million under such lines of credit at
December 31, 2006. The lines of credit bear interest at the EURIBOR rate plus
2.0% (3.05% at December 31, 2006). The outstanding principal balance plus any
interest is payable on demand and is secured by accounts receivables of
approximately $7.2 million and inventories of approximately $4.1 million.

Effective March 31, 2004, concurrent with an amended distribution agreement, the
Company issued to a distributor a revolving promissory note for certain sums to
come due to Medicor based on Medicor's and the manufacturer's administration of
product replacement claims. The note bears interest at the rate of 6.75% per
annum. The principal amount under the note as of December 31, 2006 was $0.
During the second quarter of fiscal 2006, the distributor notified the Company
that the distributor is owed $3.3 million under the promissory note. The Company
disputes that it presently owes the distributor the $3.3 million claimed to be
due under the amended distribution agreement and has sought substantiation for
such amount by requesting information from the distributor. To date, the
distributor has not provided the information requested. The Company is currently
discussing the issues related to the amended distribution agreement and the
promissory note with the distributor. Additionally, due to the distributor's
delay in filing a PMA with the US Food and Drug Administration for the Company's
breast implant products, the Company believes that the distributor may be in
breach of the amended distribution agreement. In this regard, the Company will
be seeking information from the distributor to determine whether the distributor
has acted in compliance with its obligations under the amended distribution
agreement. The Company believes that

                                       16

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 9 - LINES OF CREDIT (continued)

it has incurred significant damages in excess of the $3.3 million claimed to be
due to the distributor because of the of the distributor's failure to file the
PMA on a timely basis. The Company has provided for a provision for such claims
aggregating $1.3 million at December 31, 2006, which is included in accounts
payable and accrued expenses in the accompanying balance sheet.

NOTE 10 - STOCK OPTIONS

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

The 2004 Plan allows for the grant of both incentive stock options and
nonstatutory stock options. The 2004 Plan may be administered, interpreted and
constructed by the Board of Directors or a compensation committee. The maximum
number of shares of common stock which may be issued pursuant to options granted
under the 2004 Plan may not exceed 2,000,000 shares. During July 2004, the
Company issued 1,175,000 options. If any options granted under the 2004 Plan
expires or terminates without having been exercised or ceased to be exercisable,
such options will be available again under the 2004 Plan. All employees of the
Company and its subsidiaries are eligible to receive incentive stock options and
nonstatutory stock options. Non-employee directors and outside consultants who
provided bona-fide services not in connection with the offer or sale of
securities in a capital raising transaction are eligible to receive nonstatutory
stock options. Incentive stock options may not be granted below their fair
market value at the time of grant or, if to an individual who beneficially owns
more than 10% of the total combined voting power of all stock classes of the
Company or a subsidiary, the option price may not be less than 110% of the fair
value of the common stock at the time of grant. The expiration date of an
incentive stock option may not be longer than ten years from the date of grant.
Option holders, or their representatives, may exercise their vested options up
to three months after their employment termination or one year after their death
or permanent and total disability. The 2004 Plan provides for adjustments upon
changes in capitalization.

There were no transactions in the 2004 Plan during the six-month periods ended
December 31, 2006 and 2005.

NOTE 11 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one single segment, breast implants and analyzes its
revenues derived from two geographic locations: France and the rest of the
world. The Company did not have revenues from the U.S. during the six-month
periods ended December 31, 2006 and 2005. Information about the Company's sales
in different geographic locations for the six-month periods ended December 31,
2006 and 2005 is shown below pursuant to the provisions of SFAS No. 131,
"Disclosures about segments of an Enterprise and Related Information."

                          Six-month period ended December 31,
                               2006               2005
                            ------------      ------------
France                      $ 2,068,669        $1,027,343
Outside of France             5,700,801         5,319,410
                            ------------      ------------
                            $ 7,769,470        $6,346,753
                            ============       ===========

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

                                       17

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 12 - LEGAL CONTINGENCIES

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

Initially, two cases were filed: one in October of 1999 by Saul and Ruth Kwartin
and assigned Case No. 99-25227-CA-01 and one in June of 2000 by Steven Kwartin
and assigned Case No. 00-14665-CA-01. Case No. 99-25227 was voluntarily
dismissed by the Pl
aintiffs, who then unsuccessfully tried to withdraw their
dismissal. The Plaintiffs then appealed. In May of 2004, the appellate court
affirmed the trial court's Order approving the voluntary dismissal. A motion by
PIP/USA and Mr. Mas to recover their attorneys' fees is pending in the trial
court, as is a motion to disqualify the Plaintiffs' counsel in that lawsuit.
Case No. 00-14665-CA-01 by Steven Kwartin remains pending. In June of 2003,
Robert and Nina Kwartin commenced a lawsuit assigned Case No. 03-15006. That
lawsuit remains pending. In September of 2003, Saul and Ruth Kwartin filed
another lawsuit assigned Case No. 0322537-CA-27, alleging similar claims to
those included in the dismissed case. Within a day or two of that lawsuit,
Steven Kwartin filed his second lawsuit assigned Case No. 03-22399-CA-15,
against Mr. Mas and Donald McGhan only. Case Nos.: 03-15006, 00-14665, 03-22399
and 03-22537 were consolidated for all pretrial purposes by Orders dated
December 22, 2005.A status conference was held on October 23, 2006 and a hearing
date was reserved for March 14, 2007 for all four cases on Defendants' motions
to dismiss.

In November of 2003, Jessica Fischer Schnebel and fifteen other women filed a
Second Amended Consolidated Class Action Complaint against PIP, PIP/USA, Inc.
and III Acquisition Corp. d/b/a PIP America in the Circuit Court of Cook County,
Illinois. The Second Amended Consolidated Class Action Complaint contains counts
alleging product liability, breach of the implied warranties of merchantability
and fitness for a particular purpose, violation of the Illinois Consumer Fraud
Act and a contract claim alleging third-party beneficiary status. Unspecified
monetary damages, exemplary damages and attorneys fees and costs are sought.
Motions to dismiss filed by PIP and PIP America remains pending and discovery is
underway. The plaintiffs have not sought to date to certify any putative class.
Our U.S. distributor has tendered this case to PIP, for defense and indemnity
pursuant to the distributor agreement. A hearing was held on November 1, 2006 on
III Acquisition's motion to dismiss the Third Amended Complaint. The Court
dismissed it with leave to re-plead. On June 7, 2006, Poly Implant Protheses,
S.A. filed a motion to dismiss third amended consolidated class action
Complaint. That motion remains pending.

Heritage Worldwide, Inc. and PIP and other defendants were sued by Madeline
Sanchez in New York Supreme Court in July of 2004 for alleged product liability
and other related claims. Both Heritage Worldwide, Inc. and PIP deny any
liability to the Plaintiff and have answered the Complaint and asserted
affirmative defenses. Discovery is ongoing. PIP filed a motion for summary
judgment on December 11, 2006, which remains pending.

                                       18

<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006
                                   (Unaudited)

NOTE 12 - LEGAL CONTINGENCIES (continued)

PIP was served with a product liability lawsuit in Louisiana entitled Jo Ann
Sagona Carimi, et al. v. Poly Implant Protheses, S.A., et al., Case No.:
04-2813in United States District Court for the Eastern District of Louisiana in
August, 2006. This action was steeled in January 2007.

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

On September 1, 2006, PIP was sued in federal court in Houston, Texas by eleven
individuals alleging product liability claims in that certain action entitled
Edwards, et al. v. PIP, et al. Case No, H-06-2817. PIP has not yet been served.

III Acquisition Corp. d/b/a PIP .America claims indemnification from PIP/USA,
Inc., Poly Implants Protheses, S.A., and Jean-Claude Mas, personally, from all
claims, including those asserted above. As a result, the Company believes the
costs associated with these matters will not have a material adverse impact on
the Company's business, results of operations or financial position.

The Company has recorded a provision of approximately $470,000 at December 31,
2006 in connection with these matters.

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

                                       19

<PAGE>

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

Overview

Heritage Worldwide, Inc. (the "Company" or "we") and its subsidiaries develop,
manufacture, and market breast implants worldwide. We ceased making sales in the
U.S. market in May 2000, as a result of changes in FDA regulations. At that
time, the U.S. market represented approximately $4 million, or 40% of our
revenues.

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

Critical Accounting Policies and Estimates

A summary of significant accounting policies is provided in Note 3 to our
consolidated financial statements included in our 2005 Form 10-KSB. Management
believes that the application of these policies on a consistent basis enables
the Company to provide useful and reliable financial information about the
Company's operating results and financial condition.

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

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

                                       20

<PAGE>

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

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

o The risks of ownership have passed to the buyer;

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

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

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

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

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

o The breast implants were complete and ready for shipment;

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

o The pattern of bill and hold transactions, are consistent with the Company's
  past experiences;

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

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

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

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

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

Goodwill. At December 31, 2006, we had approximately $1.1 million in indefinite
lived goodwill related to our acquisition of our subsidiary in Spain. We
evaluate goodwill based on the future contributing margins of such subsidiary.
We use judgment in assessing goodwill for impairment. Goodwill is reviewed for
impairment annually, or sooner if events or changes in circumstances indicate
that the carrying amount could exceed fair value. Fair values are based on
discounted cash flows using a discount rate determined by our management to be
consistent with industry discount rates and the risks inherent in our current
business model. In accordance with SFAS No. 142, we completed the required
impairment tests of goodwill at the date of adoption and annually as required.
There were no impairment charges recorded as a result of the adoption of SFAS
No. 142 or annual impairment tests. Due to uncertain market conditions and
potential changes in our strategy and product portfolio, it is possible that the
forecasts we use to support our goodwill could change in the future, which could
result in non-cash charges that would adversely affect our results of operations
and financial condition.

                                       21

<PAGE>

Deferred Tax Assets. We are required to estimate our income taxes in each of the
jurisdictions in which we operate as part of the process of preparing our
consolidated financial statements. At June 30, 2006, the Company has no net
deferred tax assets. SFAS No. 109, Accounting for Income Taxes, requires a
valuation allowance to reduce the deferred tax assets reported if, based on the
weight of the evidence, it is not more likely than not that some portion or all
of the deferred tax assets will be realized. Management reviews deferred tax
assets periodically for recoverability and makes estimates and judgments
regarding the expected geographic sources of taxable income, gains from
investments, as well as tax planning strategies in assessing the need for a
valuation allowance. We determined that a valuation allowance relating to
foreign tax net operating loss carryovers was necessary to reduce our deferred
tax assets to the amount that will more likely than not be realized. If the
estimates and assumptions used in our determination change in the future, we
could be required to revise our estimates of the valuation allowances against
our deferred tax assets and adjust our provisions for additional income taxes.
In the ordinary course of global business, there are transactions for which the
ultimate tax outcome is uncertain, thus judgment is required in determining the
worldwide provision for income taxes. We provide for income taxes on
transactions based on our estimate of the probable liability. We adjust our
provision as appropriate for changes that impact our underlying judgments.
Changes that impact provision estimates include such items as jurisdictional
interpretations on tax filing positions based on the results of tax audits and
general tax authority rulings. Due to the evolving nature of tax rules combined
with the large number of jurisdictions in which we operate, it is possible that
our estimates of our tax liability and the realization of our deferred tax
assets could change in the future, which may result in additional tax
liabilities and adversely affect our results of operations, financial condition
and cash flows.

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

                                       22

<PAGE>

RESULTS OF OPERATIONS

                         CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                 Increase/        Increase/
                                             For the six-month period ended     (Decrease)       (Decrease)
                                                       December 31,           2006 vs 2005      2006 vs 2005
                                         -----------------------------------
                                                2006                    2005             $              %
                                         ------------------    ----------------------------------------------
<S>                                            <C>                  <C>             <C>                <C>
Revenues                                       $ 7,769,470          $ 6,346,753     $1,422,717         22.4%

Cost of revenues                                 3,509,652            2,640,067        869,585         32.9%
                                         ------------------    ----------------------------------------------
     Gross margin                                4,259,818            3,706,686        553,132         14.9%
                                         ------------------    ----------------------------------------------

Operating expenses:
  Selling, general and administrative            3,888,391            2,693,638      1,194,753         44.4%

  Research and development                         719,903              521,612        198,291         38.0%
                                         ------------------    ----------------------------------------------
     Total operating expenses                    4,608,294            3,215,250      1,393,044         43.3%
                                         ------------------    ----------------------------------------------
Loss before other expenses and
Operating (loss) income                           (348,476)             491,436       (839,912)      -170.9%
                                         ------------------    ----------------------------------------------
Other expenses:
 Gain in equity investment                           8,145               20,495        (12,350)          NM
 Other expenses:                                         -                    -
  Interest expense-related party                   (86,268)                   -        (86,268)          NM
  Interest expense                                (333,963)            (322,622)       (11,341)         3.5%
                                         ------------------    ----------------------------------------------
     Total other expenses                         (412,086)            (302,127)      (109,959)        36.4%
                                         ------------------    ----------------------------------------------
 (Loss) income before provision for
    income taxes                                  (760,562)             189,309       (949,871)      -501.8%

  Provision for from income taxes                        -                    -              -           NM
                                         ------------------    ----------------------------------------------
(Loss) income before minority interest            (760,562)             189,309       (949,871)      -501.8%

Minority interest                                   13,362              (30,561)        43,923       -143.7%
                                         ------------------    ----------------------------------------------
Net (loss) income                               $ (747,200)           $ 158,748     $ (905,948)      -570.7%
                                         ==================    ==============================================

</TABLE>

NM: not meaningful

Six months Ended December 31, 2006 Compared with Six months Ended
December 31, 2005

   Revenues

Revenues consist primarily of the sale of breast implants and other body support
products. The increase in revenues during the six-month period ended December
31, 2006 when compared to the prior year period is primarily attributable to
increased volume of breast implants sold to existing surgeons and clinics in
France, and to a lesser extent, distributors in countries other than France,
such as in Latin America as well a decrease in average selling price of the
breast implants.

   Cost of Revenues

Cost of revenues consists primarily of materials and direct labor expenses
associated with the production of breast implants. The increase in costs of
revenues during the six-month period ended December 31, 2006 is primarily
attributable to an increase of the costs of raw materials as well as an increase
in volume of product sold.

                                       23

<PAGE>

   Selling and General Administrative Expenses

Selling, general and administrative expenses consist primarily of compensation
and related benefits of sales representatives which market our products as well
as general and administrative staff used to support our operations, as well as
facilities-related expenses professional fees and allowance for bad debts. The
increase in selling, general and administrative expenses during the six-month
period ended December 31, 2006 when compared to the prior year comparable period
is primarily due to a decrease in the provision for doubtful accounts and
product replacements recorded in the six-month period ended December 31, 2005
aggregating $419,000 compared to an increase in such provision of approximately
$20,000 during the six-month period ended December 31, 2006. Additionally,
during the six-month ended December 31, 2006, we recognized approximately
$159,000 in share-based payment expenses pursuant to FAS 123 (R), which became
effective January 1, 2006. No such expenses occurred during the six-month period
ended December 31, 2005. The remaining increases in our selling, general, and
administrative expenses is primarily due to increased selling and marketing
expenses incurred to support our increased revenues.

   Research and Development

Research and development expenses primarily consist of compensation and related
benefits of personnel associated with the development and introduction of
existing and future product lines. The increase in research and development
expenses during the six-month period ended December 31, 2006 is primarily due to
an increase in personnel allocated to development of new products and the
enhancement of existing products.

   Interest Expense

Interest expense consists primarily of amortization of debt discount associated
with the issuance of convertible debentures and interest expense associated with
our lines of credit and other long-term debt. The increase in interest expense
during the six-month period ended December 31, 2006 is primarily due to
increased utilization of our interest-bearing lines of credit.

Liquidity and Capital Resources

During the six-month period ended December 31, 2006, we used approximately
$657,000 to fund our operating activities, which is due to the following:

o         Our net loss of approximately $747,000 adjusted for non-cash items:
          debt discount of approximately $255,000, depreciation of $299,000, and
          the imputation of the fair value of options amounting to approximately
          $159,000. Additionally, our account receivables and accounts payable
          and accrued expenses decreased by approximately $261,000 and $821,000,
          respectively, and our inventory and prepaid expenses and other current
          assets increased by approximately $107,000 and $29,000, respectively.

o         Our proceeds from issuance of long-term debt and line of credit
          amounting to approximately $35,000 and $606,000, respectively. We
          repaid approximately $267,000 and $85,000 in long-term debt and
          capitalized obligations during the six-month period ended December 31,
          2006.

During the six-month period ended December 31, 2005, we have generated cash
flows from operating activities of approximately $176,000, which is due to the
following:

o         Our net income of approximately $159,000 adjusted for non-cash items:
          debt discount of approximately $298,000, depreciation of $248,000, a
          decrease in provision for doubtful accounts of approximately $294,000.
          Additionally, our inventory increased approximately by $51,000.

o         We incurred capital expenditures of approximately $130,000.

o         Our net cash provided by operating activities funded repayment on our
          lines of credit and long-term debt of approximately $275,000 and
          $97,000. We also generated proceeds from the issuance of long term
          debt of approximately $132,000.

                                       24

<PAGE>

New Accounting Pronouncements

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

In September 2006, the FASB issued FASB Statement No. 157. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practices. This Statement is effective for
financial statements for fiscal years beginning after November 15, 2007. Earlier
application is permitted provided that the reporting entity has not yet issued
financial statements for that fiscal year. Management believes this Statement
will have no impact on the financial statements of the Company once adopted.

ITEM 3.     CONTROLS AND PROCEDURES

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

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


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

None

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

None

ITEM 3.    DEFAULTS IN SENIOR SECURITIES

None

                                       25

<PAGE>

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

None

ITEM 5.     OTHER INFORMATION

During April 2006, we were informed by the District Attorney's office of the
Appeals Court of Aix-en-Provence, France, that Alain Sereyjol-Garros, one of our
directors and officers, cannot directly or indirectly, manage or control a
French commercial, professional, or industrial enterprise, such as our main
subsidiary, PIP. According to the District Attorney's office, on November 15,
2000, Mr. Garros was convicted by a French court of breach of trust and misuse
of funds and fraudulent use of corporate property for his personal use, in the
last 10 years. As a result of the above-mentioned conviction, he was sentenced
by the Criminal Chamber [division] of the Appeal Court of Aix-en-Provence (5th
chamber) to a term of at least three months of imprisonment without suspension
in this particular case, to ten months of imprisonment with suspended sentence,
and to three years probation from which three months were revoked by a decision
of the said division on November 22, 2005. Mr. Sereyjol-Garros resigned from our
subsidiary's oversight committee on April 26, 2006. We are in discussion with
Mr. Garros to secure his resignation from all positions with the Company,
including financing the repurchase of his interest in the Company.


ITEM 6.     EXHIBITS

              (a)  Exhibits

        Exhibit No.            Description

 31.1    Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.  Filed herewith.
 31.2    Certification of Chief Financial Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.  Filed herewith.
 32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C Section
         1350. Filed Herewith
 32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C Section
         1350. Filed Herewith.

                                       26

<PAGE>


                                   SIGNATURES

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

                                   HERITAGE WORLDWIDE, INC.
                                         (Registrant)

Date:  February 14, 2007        By: /s/ Jean Claude Mas
                                    -----------------------
                                        Jean Claude Mas
                                        Chairman of the Board


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


                                       27