United
States Securities and Exchange Commission


Washington,
D.C. 20549


Form
10-Q





x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
quarterly period ended June 30, 2009





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  0-21989





Medialink Worldwide
Incorporated


(Exact
name of registrant as specified in its charter)




Delaware
              
              52-1481284(State
      or other jurisdiction of
              
              (I.R.S.
      Employerincorporation
      or organization)
              
              Identification
      Number)




708 Third Avenue, New York,
    NY
              
              10017(Address
      of principal executive offices)
              
              (Zip
      Code)




(212)
682-8300


(Registrant's
telephone number, including area code)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes  ̈ No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer”, and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer  ̈
            
            Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company)
            Smaller
      reporting company x





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
number of shares of the issuer's common stock outstanding as of July 31, 2009,
was 6,428,059.











PART
I – FINANCIAL INFORMATION





Item
1. Financial
Statements





MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


(Unaudited)


(In
thousands of dollars, except share and per-share amounts)




June 30,
                      
                      
                      December 31,2009
                      
                      
                      2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                      
                      $
                      2,146
                      
                      
                      $
                      5,354Accounts
      receivable, net of allowance for doubtful accounts of $72 and
      $84
                      
                      
                      1,739
                      
                      
                      
                      2,190Prepaid
      expenses
                      
                      
                      221
                      
                      
                      
                      264Prepaid
      and refundable taxes
                      
                      
                      247
                      
                      
                      
                      627Other
      current assets
                      
                      
                      279
                      
                      
                      
                      824Total
      current assets
                      
                      
                      4,632
                      
                      
                      
                      9,259Other
      assets
                      
                      
                      153
                      
                      
                      
                      211Total
      assets
                      
                      $
                      4,785
                      
                      
                      $
                      9,470LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      payable
                      
                      $
                      871
                      
                      
                      $
                      1,221Accrued
      expenses and other current liabilities
                      
                      
                      2,881
                      
                      
                      
                      3,172Total
      current liabilities
                      
                      
                      3,752
                      
                      
                      
                      4,393Convertible
      debentures, net of unamortized discount of $133 in 2008
                      
                      
                      -
                      
                      
                      
                      2,517Other
      long-term liabilities
                      
                      
                      186
                      
                      
                      
                      379Total
      liabilities
                      
                      
                      3,938
                      
                      
                      
                      7,289Commitments
      and contingenciesStockholders'
      Equity:Series
      A Preferred stock: $.01 par value, authorized 50,000 shares;
      noneissued
      and outstanding
                      
                      
                      -
                      
                      
                      
                      -Common
      stock: $.01 par value, authorized 15,000,000 shares;
issued6,529,180
      shares in 2009 and 2008
                      
                      
                      65
                      
                      
                      
                      65Additional
      paid-in capital
                      
                      
                      28,874
                      
                      
                      
                      28,765Accumulated
      deficit
                      
                      
                      (27,862
                      )
                      
                      
                      (26,412
                      )Accumulated
      other comprehensive loss
                      
                      
                      113
                      
                      
                      
                      106Common
      stock in treasury (at cost, 101,121 shares)
                      
                      
                      (343
                      )
                      
                      
                      (343
                      )Total
      stockholders' equity
                      
                      
                      847
                      
                      
                      
                      2,181Total
      liabilities and stockholders' equity
                      
                      $
                      4,785
                      
                      
                      $
                      9,470








2




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)


(In
thousands, except per-share amounts)




For the six months ended
                    
                    
                    For the three months endedJune 30,
                    
                    
                    June 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Revenues
                    
                    $
                    6,732
                    
                    
                    $
                    9,706
                    
                    
                    $
                    3,550
                    
                    
                    $
                    4,846Operating
      expenses:Direct
      costs
                    
                    
                    2,563
                    
                    
                    
                    4,044
                    
                    
                    
                    1,316
                    
                    
                    
                    1,908Selling,
      general, and administrative expenses
                    
                    
                    5,653
                    
                    
                    
                    7,532
                    
                    
                    
                    2,510
                    
                    
                    
                    3,711Depreciation
      and amortization
                    
                    
                    -
                    
                    
                    
                    471
                    
                    
                    
                    -
                    
                    
                    
                    232Goodwill
      impairment
                    
                    
                    -
                    
                    
                    
                    3,429
                    
                    
                    
                    -
                    
                    
                    
                    3,429Charge
      for exit activities
                    
                    
                    81
                    
                    
                    
                    119
                    
                    
                    
                    -
                    
                    
                    
                    -Total
      operating expenses
                    
                    
                    8,297
                    
                    
                    
                    15,595
                    
                    
                    
                    3,826
                    
                    
                    
                    9,280Operating
      loss
                    
                    
                    (1,565
                    )
                    
                    
                    (5,889
                    )
                    
                    
                    (276
                    )
                    
                    
                    (4,434
                    )Gain
      on debt extinguishment
                    
                    
                    294
                    
                    
                    
                    -
                    
                    
                    
                    294
                    
                    
                    
                    -Interest
      expense - net
                    
                    
                    (179
                    )
                    
                    
                    (252
                    )
                    
                    
                    (90
                    )
                    
                    
                    (147
                    )Loss
      from continuing operations before taxes
                    
                    
                    (1,450
                    )
                    
                    
                    (6,141
                    )
                    
                    
                    (72
                    )
                    
                    
                    (4,581
                    )Income
      tax benefit
                    
                    
                    (109
                    )
                    
                    
                    (155
                    )
                    
                    
                    (109
                    )
                    
                    
                    (59
                    )Income
      (loss) from continuing operations
                    
                    
                    (1,341
                    )
                    
                    
                    (5,986
                    )
                    
                    
                    37
                    
                    
                    
                    (4,522
                    )Income
      (loss) from discontinued operations, net of tax
                    
                    
                    (109
                    )
                    
                    
                    (4,591
                    )
                    
                    
                    11
                    
                    
                    
                    (3,534
                    )Net
      income (loss)
                    
                    $
                    (1,450
                    )
                    
                    $
                    (10,577
                    )
                    
                    $
                    48
                    
                    
                    $
                    (8,056
                    )Net
      income (loss)
                    
                    $
                    (1,450
                    )
                    
                    $
                    (10,577
                    )
                    
                    $
                    48
                    
                    
                    $
                    (8,056
                    )Other
      comprehensive income (loss)
                    
                    
                    7
                    
                    
                    
                    (16
                    )
                    
                    
                    11
                    
                    
                    
                    (11
                    )Comprehensive
      income (loss)
                    
                    $
                    (1,443
                    )
                    
                    $
                    (10,593
                    )
                    
                    $
                    59
                    
                    
                    $
                    (8,067
                    )Basic
      income (loss) per common share:Income
      (loss) from continuing operations
                    
                    $
                    (0.21
                    )
                    
                    $
                    (0.93
                    )
                    
                    $
                    0.01
                    
                    
                    $
                    (0.70
                    )Income
      (loss) from discontinued operations
                    
                    
                    (0.02
                    )
                    
                    
                    (0.72
                    )
                    
                    
                    0.00
                    
                    
                    
                    (0.55
                    )Net
      income (loss)
                    
                    $
                    (0.23
                    )
                    
                    $
                    (1.65
                    )
                    
                    $
                    0.01
                    
                    
                    $
                    (1.25
                    )Diluted
      income (loss) per common share:Income
      (loss) from continuing operations
                    
                    $
                    (0.21
                    )
                    
                    $
                    (0.93
                    )
                    
                    $
                    0.01
                    
                    
                    $
                    (0.70
                    )Income
      (loss) from discontinued operations
                    
                    
                    (0.02
                    )
                    
                    
                    (0.72
                    )
                    
                    
                    0.00
                    
                    
                    
                    (0.55
                    )Net
      income (loss)
                    
                    $
                    (0.23
                    )
                    
                    $
                    (1.65
                    )
                    
                    $
                    0.01
                    
                    
                    $
                    (1.25
                    )Weighted
      average number of common shares:Basic
                    
                    
                    6,428
                    
                    
                    
                    6,428
                    
                    
                    
                    6,428
                    
                    
                    
                    6,428Diluted
                    
                    
                    6,428
                    
                    
                    
                    6,428
                    
                    
                    
                    6,443
                    
                    
                    
                    6,428








3




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)


(In
thousands of dollars)





For the six months endedJune 30,2009
                    
                    
                    2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                    
                    $
                    (1,450
                    )
                    
                    $
                    (10,577
                    )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Depreciation
      and amortization
                    
                    
                    -
                    
                    
                    
                    471Deferred
      income taxes
                    
                    
                    -
                    
                    
                    
                    308Loss
      from discontinued operations
                    
                    
                    109
                    
                    
                    
                    4,591Goodwill
      impairment charge
                    
                    
                    -
                    
                    
                    
                    3,429Gain
      on debt extinguishment
                    
                    
                    (294
                    )
                    
                    
                    -Other
                    
                    
                    (168
                    )
                    
                    
                    444Changes
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    465
                    
                    
                    
                    363Prepaid
      expenses and other assets
                    
                    
                    488
                    
                    
                    
                    66Prepaid
      and refundable taxes
                    
                    
                    465
                    
                    
                    
                    (492
                    )Accounts
      payable and accrued expenses
                    
                    
                    (982
                    )
                    
                    
                    (783
                    )Other
      liabilities
                    
                    
                    (142
                    )
                    
                    
                    (250
                    )Net
      cash used in operating activities of discontinued
    operations
                    
                    
                    (82
                    )
                    
                    
                    (1,628
                    )Net
      cash used in operating activities
                    
                    
                    (1,591
                    )
                    
                    
                    (4,058
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchases
      of property and equipment
                    
                    
                    -
                    
                    
                    
                    (162
                    )Expenditures
      on sale of businesses
                    
                    
                    (27
                    )
                    
                    
                    -Net
      cash used in investing activities of discontinued
    operations
                    
                    
                    -
                    
                    
                    
                    (339
                    )Net
      cash used in investing activities
                    
                    
                    (27
                    )
                    
                    
                    (501
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES - Repayment ofconvertible
      debentures
                    
                    
                    (1,590
                    )
                    
                    
                    -Net
      decrease in cash and cash equivalents
                    
                    
                    (3,208
                    )
                    
                    
                    (4,559
                    )Cash
      and cash equivalents at beginning of period
                    
                    
                    5,354
                    
                    
                    
                    11,438Cash
      and cash equivalents at end of period
                    
                    $
                    2,146
                    
                    
                    $
                    6,879








4




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 (In
thousands of dollars, except per-share amounts)




1.
            Basis
      of Presentation





The
accompanying unaudited consolidated financial statements of Medialink Worldwide
Incorporated and its subsidiaries (the “Company”), which have been prepared in
accordance with the instructions to Form 10-Q and therefore do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles, should be read in conjunction with the notes to
the consolidated financial statements contained in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008. The Company believes that all
adjustments, consisting primarily of normal recurring accruals, necessary for a
fair presentation have been included in the financial statements. The operating
results of any quarter are not necessarily indicative of the results for the
entire year or any future period.





The
accompanying financial statements have been prepared on a going concern basis,
which contemplates continuity of operations, realization of assets, and
liquidation of liabilities in the ordinary course of business, and do not
reflect adjustments that might result if the Company were unable to continue as
a going concern. The Company's ability to continue as a going concern is
dependent on the ability of the Company to achieve sustained profitability or to
obtain additional financing or investment from third-party investors. In July
2009, the Company entered into a merger agreement pursuant to which all of its
outstanding common stock would be acquired, subject to stockholder approval (see
Note 2). There can be no assurance that the merger will be consummated or that
the Company will be successful in its other endeavors.





Certain
prior-period amounts in the accompanying financial statements have been
reclassified to conform to the 2009 presentation, including the
reclassifications necessary to reflect the financial position, results of
operations, and cash flows of disposed businesses separately from continuing
operations (see Note 5).




2.
            Merger





On July
1, 2009, the Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with The NewsMarket, Inc. (“The NewsMarket”) and TNM Group
Incorporated (“Merger Sub”), a newly-formed wholly-owned subsidiary of The
NewsMarket. Pursuant to the Merger Agreement, all issued and outstanding shares
of the Company’s common stock and all stock purchase rights will be cancelled
and converted into the right to receive cash in the amount of $0.20 per share.
The Merger Agreement is subject to the approval of the Company’s stockholders,
and upon such approval and consummation of the merger, Merger Sub will merge
with and into the Company, with the Company surviving as a wholly-owned
subsidiary of The NewsMarket. The Company’s board of directors has unanimously
recommended a “for” vote approving the Merger Agreement.





The
Merger Agreement includes customary representations, warranties, and covenants
of the Company, The NewsMarket, and Merger Sub. The Company has agreed to
operate its business in the ordinary course until the Merger Agreement is
approved and the transaction is consummated. The Company has also agreed not to
solicit, encourage, or initiate discussions with third parties regarding other
proposals to acquire the Company and has agreed to certain other restrictions on
its ability to respond to any unsolicited proposals. The Merger Agreement also
includes customary termination provisions for both the Company and The
NewsMarket, and provides that, in connection with the termination of the Merger
Agreement under specified circumstances, either the Company or The NewsMarket
may be required to pay to the other party a termination fee of
$275.




3.
            Subordinated
      Debentures





On June
30, 2009, the Company entered into Payoff, Amendment and Settlement Agreements
(the “Payoff Agreements”) with the holders of its variable rate convertible
debentures under which the Company paid $1,590 to fully satisfy the outstanding
debentures with a face value of $2,650. In July 2009, subsequent to signing the
Payoff Agreements and receipt of payment thereunder, the former debenture
holders gave the Company written notice that they intended to file a complaint
seeking to block the transactions contemplated by the Merger Agreement. Such
claims were denied in their entirety by the Company.





5





MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued
 (In
thousands of dollars, except per-share amounts)





On July
27, 2009, the Company entered into an Agreement and General Release (the
“Release”) with the former debenture holders. Under the terms of the Release,
the Company paid $515 to the former debenture holders and provided a general
release from any claims the Company may have, including any counter claims, in
exchange for a general release of any and all claims by the former debenture
holders related to, among other things, the Payoff Agreements and the
transactions contemplated by the Merger Agreement. In addition, the Company paid
$10 in the aggregate to repurchase from the former debenture holders outstanding
warrants to purchase 536,729 shares of the Company’s common stock.





In
connection with entering into the Release with the former debenture holders, on
July 27, 2009, the Company entered into a Consent and Waiver with The NewsMarket
and Merger Sub (the “Consent”). Under the terms of the Consent, The NewsMarket
and Merger Sub consented to the actions taken by the Company in connection with
the Release and acknowledged that such actions taken by the Company shall not be
deemed to be violations of the Merger Agreement.





The
Company has been released from all future obligations related to the
subordinated debentures and the security interest on the Company’s assets held
by the former debenture holders has been terminated. The Company recognized a
gain on debt extinguishment of approximately $294 in June 2009 in connection
with the Payoff Agreements and the Release.




4.
            Preferred
      Stock





On July
1, 2009, prior to the execution of the Merger Agreement, the Company entered
into an amendment (the “Rights Amendment”) to its Preferred Stock Rights
Agreement (the “Rights Agreement”). The Rights Amendment, among other things,
renders the Rights Agreement inapplicable to the transaction contemplated by the
Merger Agreement. The Rights Amendment provides that the approval, execution, or
delivery of the Merger Agreement or the consummation of or announcement of the
merger or any other transaction contemplated in the Merger Agreement will not
result in either The NewsMarket or Merger Sub being deemed an “Acquiring Person”
(as such term is defined in the Rights Agreement).




5.
            Discontinued
      Operations





On August
29, 2008, the Company transferred its 76% ownership interests in TTX (US) LLC
and TTX Limited (collectively, “Teletrax”), the two subsidiaries that comprised
the Company’s digital video monitoring services business, to Philips Electronics
North America Corporation and Koninklijke Philips Electronics N.V.
(collectively, “Philips”), respectively. The Company has no further involvement
in the digital video monitoring services business and no further funding
obligations for Teletrax.





On
October 1, 2008, the Company sold the client list of Medialink UK Limited
(“Medialink UK”), its UK-based media communications services subsidiary, to
World Television Group plc (“World”) and subsequently wound down the operation.
Under the terms of the agreement, the Company will receive from World a
percentage of the gross profit derived from certain Medialink UK client revenue
for a period of eighteen months from the closing date. The Company has earned
payments totaling approximately $18 related to such gross profit derived by
World.





The
operations of Teletrax and Medialink UK are presented as discontinued operations
for all periods presented in the accompanying consolidated financial statements
as follows:





6




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued
 (In
thousands of dollars, except per-share amounts)




Six months ended June 30,
                
                
                Three months ended June 30,2009
                
                
                2008
                
                
                2009
                
                
                2008Revenues
                
                $
                -
                
                
                $
                4,431
                
                
                $
                -
                
                
                $
                2,190Income
      (loss) from operations before taxes
                
                $
                (82
                )
                
                $
                (4,591
                )
                
                $
                8
                
                
                $
                (3,534
                )Income
      tax expense
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Income
      (loss) from operations
                
                
                (82
                )
                
                
                (4,591
                )
                
                
                8
                
                
                
                (3,534
                )Gain
      (loss) on disposal before taxes
                
                
                (27
                )
                
                
                -
                
                
                
                3
                
                
                
                -Income
      tax expense
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Gain
      (loss) on disposal
                
                
                (27
                )
                
                
                -
                
                
                
                3
                
                
                
                -Income
      (loss) from discontinued operations
                
                $
                (109
                )
                
                $
                (4,591
                )
                
                $
                11
                
                
                $
                (3,534
                )





The loss
from operations of $82 and the loss on disposal of $27 for the six months ended
June 30, 2009, relate entirely to Medialink UK. The loss from operations of
$4,591 for the six months ended June 30, 2008, is comprised of a loss from
operations of $3,439 and $1,152 for Teletrax and Medialink UK, respectively.
Income from operations of $8 and the gain on disposal of $3 for the three months
ended June 30, 2009, relate entirely to Medialink UK and represent the
settlement of charges previously accrued for less than the amounts originally
estimated. The loss from operations of $3,534 for the three months ended June
30, 2008, is comprised of a loss from operations of $2,614 and $920 for Teletrax
and Medialink UK, respectively.




6.
            Earnings
      (Loss) per Share





Basic
earnings (loss) per share of common stock is computed by dividing income (loss)
available to common stockholders by the weighted average number of common shares
outstanding. There were no reconciling items to net income (loss) to arrive at
income (loss) available to common stockholders for the year-to-date and
quarterly periods ended June 30, 2009 and 2008. Diluted earnings (loss) per
share of common stock is computed by giving effect to all dilutive potential
common shares.




The
number of shares used in the calculation of diluted earnings (loss) per share
for the six months ended June 30, 2009, excluded 12,051 incremental shares
related to stock options and warrants.  The number of shares for the
six months ended June 30, 2008, excluded 493 incremental shares related to stock
options and warrants and 1,074,074 incremental shares related to convertible
debentures.  All such incremental shares were excluded from the
calculation of diluted earnings (loss) per share due to their antidilutive
effect on the loss from continuing operations.





The
number of shares used in the calculation of diluted earnings (loss) per share
for the three months ended June 30, 2009, included 15,049 incremental shares
related to stock options and warrants. The number of shares for the three months
ended June 30, 2008, excluded 1,074,074 shares related to convertible debentures
due to their antidilutive effect on the loss from continuing
operations.  There were no incremental shares related to stock options
and warrants for the three months ended June 30, 2008.




7.
            Exit
      Activities





In
February 2009, the Company completed a plan to vacate the remaining portion of
its office location in Norwalk, CT (the “2009 Q1 Plan”). The results of
operations for the six months ended June 30, 2009, include a charge of $81
related to the 2009 Q1 Plan, which consisted entirely of costs associated with a
contractual lease obligation. In addition, in January 2008, the Company
completed a plan to vacate a portion of its facility in New York (the “2008 Q1
Plan”) and during 2006 the Company initiated and completed an exit activity in
connection with the sale of U.S. Newswire, the Company’s wire distribution and
photography services division (the “2006 Q4 Plan”). In connection with the
disposal of Medialink UK, the Company completed certain exit activities in
October 2008 (the “2008 Q4 Plan”) that included vacating its facility in London
that served as the headquarters and sole facility of Medialink UK.





7





MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued
 (In
thousands of dollars, except per-share amounts)
  The
remaining liability for future payments for these plans and the amounts charged
against the liability were as follows:





Total
                
                
                2006 Q4
                  Plan
                
                
                2008 Q1
                  Plan
                
                
                2008 Q4
                  Plan
                
                
                2009 Q1
                  PlanBalance
      at January 1, 2009
                
                $
                407
                
                
                $
                28
                
                
                $
                (13
                )
                
                $
                392Charge
      for exit activities
                
                
                81
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                $
                81Facility
      closure cost receipts (payments)
                
                
                (484
                )
                
                
                (28
                )
                
                
                1
                
                
                
                (376
                )
                
                
                (81
                )Balance
      at June 30, 2009
                
                $
                4
                
                
                $
                -
                
                
                $
                (12
                )
                
                $
                16
                
                
                $
                -




8.
              Severance
 
 In June
2009 the Company settled a previously accrued severance obligation on which no
future payments will be made.  Selling, general, and administrative
(“SG&A”) expenses for the three and six months ended June 30, 2009, include
a reduction of $441 related to this settlement.  SG&A expenses for
the three and six months ended June 30, 2008, include a severance charge of $196
related to terminated employees.




9.
            Stock
      Options





The
Company administers two stock option plans, one covering employees and other
eligible participants (the “Employee Plan”) and one covering members of its
board of directors (the “Directors’ Plan”). At June 30, 2009, 1,252,937 and
164,400 shares remained available for the issuance of stock options under the
Employee Plan and the Directors’ Plan, respectively.





The
Company granted 24,000 stock options to non-employee directors on the first
business day of 2009 pursuant to the provisions of the Directors’ Plan. All such
options vest ratably over a three-year period. No stock options were granted
under the Employee Plan during the first six months of 2009.





The
following weighted average assumptions were used in calculating the fair value
of stock options granted under the Directors’ Plan during the six months ended
June 30, 2009:





Directors’ PlanExpected
      term
                  
                  
                  3.60Expected
      volatility
                  
                  
                  1.1758Expected
      dividends
                  
                  
                  0
                  %Risk-free
      interest rate
                  
                  
                  3.75
                  %





For the
six months ended June 30, 2009 and 2008, the Company recognized $109 and $176,
respectively, of compensation expense related to stock options. For the three
months ended June 30, 2009 and 2008, the Company recognized $55 and $87,
respectively, of compensation expense related to stock options. Such amounts
were based on the fair value of the stock options at the grant date. The Company
did not recognize any tax benefit related to the stock-based compensation
expense incurred during the six and three months ended June 30, 2009 and
2008.





Information
relating to activity in the Employee Plan for the six months ended June 30,
2009, is summarized in the following table. All stock option grants included in
the following table had exercise prices equal to the market price on the grant
date.





8




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued
 (In
thousands of dollars, except per-share amounts)


Number of
                                  shares
                                
                                
                                Weighted
                                  Average
                                  Exercise
                                  Price
                                
                                
                                Aggregate
                                  Intrinsic
                                  Value
                                
                                
                                Weighted
                                  Average
                                  Remaining
                                  Contractual
                                  TermOptions
      outstanding at January 1, 2009
                                
                                
                                491,725
                                
                                
                                $
                                4.44Options
      forfeited and expired
                                
                                
                                (33,400
                                )
                                
                                $
                                8.01Options
      outstanding at June 30, 2009
                                
                                
                                458,325
                                
                                
                                $
                                4.18
                                
                                
                                $
                                0
                                
                                
                                
                                6.14Options
      exercisable at June 30, 2009
                                
                                
                                302,975
                                
                                
                                $
                                4.11
                                
                                
                                $
                                0
                                
                                
                                
                                5.37





Information
relating to activity in the Directors’ Plan for the six months ended June 30,
2009, is summarized in the following table. All stock option grants included in
the following table had exercise prices equal to the market price on the grant
date.





Number of
                          shares
                        
                        
                        Weighted
                          Average
                          Exercise
                          Price
                        
                        
                        Weighted
                          Average
                          Fair
                          Value
                        
                        
                        Aggregate
                          Intrinsic
                          Value
                        
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          TermOptions
      outstanding at January 1, 2009
                        
                        
                        217,200
                        
                        
                        $
                        4.55Options
      granted
                        
                        
                        24,000
                        
                        
                        $
                        0.06
                        
                        
                        $
                        0.04Options
      forfeited and expired
                        
                        
                        (9,000
                        )
                        
                        $
                        16.50Options
      outstanding at June 30, 2009
                        
                        
                        232,200
                        
                        
                        $
                        3.62
                        
                        
                        
                        
                        
                        
                        $
                        4
                        
                        
                        
                        5.96Options
      exercisable at June 30, 2009
                        
                        
                        178,533
                        
                        
                        $
                        3.96
                        
                        
                        
                        
                        
                        
                        $
                        0
                        
                        
                        
                        5.11





Compensation
expense related to non-vested stock options under both the Employee Plan and the
Directors’ Plan that was not recognized as of June 30, 2009, totaled $275 and is
expected to be recognized over a weighted average period of 1.6 years. No
options were exercised during the six months ended June 30, 2009 and 2008. The
Company has a policy of issuing new shares of common stock upon the exercise of
stock options.




10.
            Supplemental
      Cash Flow Information:





Cash paid
for interest and income taxes during the six months ended June 30, 2009 and
2008, was as follows:





2009
                  
                  
                  2008Interest
      paid
                  
                  $
                  4
                  
                  
                  $
                  213Income
      taxes paid (refunded) – net
                  
                  $
                  (551
                  )
                  
                  $
                  29





There
were no non-cash investing and financing activities for the six months ended
June 30, 2009 and 2008.




9




MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued
 (In
thousands of dollars, except per-share amounts)




11.
              Common
      Stock Listing





In April
2009, the Company received notice from The NASDAQ Stock Market (“NASDAQ”) that
the Company’s stockholders’ equity of $2,181 as of December 31, 2008, was below
the minimum requirement of $2,500 for continued listing on The NASDAQ Capital
Market as set forth in NASDAQ Listing Rule 5550(b)(1). In June 2009, upon review
of a plan to regain compliance submitted by the Company, NASDAQ granted an
extension until August 3, 2009, for the Company to regain compliance. On August
4, 2009, the Company received a staff determination letter from NASDAQ noting
that the Company had not regained compliance as of that date and, as a result,
the Company’s common stock will be subject to delisting from NASDAQ unless the
Company requests a hearing before a NASDAQ Listing Qualifications Panel (the
“Panel”). The Company has requested such a hearing, which is scheduled for
September 23, 2009, and as a result the Company expects that its common stock
will remain listed on NASDAQ pending the issuance of a decision by the Panel
following the hearing.





In August
2008, the Company received notice from NASDAQ that for a period of thirty
consecutive business days the bid price of the Company’s common stock had closed
below the minimum $1.00 per share requirement for continued listing in
accordance with NASDAQ Listing Rule 4310(c)(4). In accordance with NASDAQ
Listing Rule 4310(c)(8)(D), the Company has been provided with a grace period of
180 days to regain compliance. During this grace period, the Company’s common
stock continues to be listed on NASDAQ. NASDAQ temporarily suspended the $1.00
per share minimum bid price requirement for continued listing through July 31,
2009. Accordingly, the Company’s grace period has been extended through November
30, 2009.





If the
Company’s common stock is delisted from The NASDAQ Capital Market it may
initially trade on the Pink OTC Market (also known as the “Pink Sheets”)
subsequent to such delisting. The Company may seek to have its common stock
traded on the OTC Bulletin Board, but there can be no assurance that it will be
successful in such efforts.




12.
            Subsequent
      Events





The
Company has evaluated subsequent events through August 14, 2009, the date that
the Company’s financial statements were issued.




13.
            Recently
      Issued Accounting Standards





Statement
of Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events,” was
issued in May 2009 and is effective for interim or annual financial periods
ending after June 15, 2009. SFAS No. 165 established general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. The
Company does not expect the provisions of SFAS No. 165 to have a material effect
on its financial condition or results of operations.





SFAS No.
168, “The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles,” was issued in July 2009 and is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. SFAS No. 168 replaces SFAS No. 162, “The Hierarchy of
Generally Accepted Accounting Principles,” which was issued in November 2008.
SFAS No. 168 establishes the FASB Accounting Standards Codification (the
“Codification”) as the source of authoritative U.S. generally accepted
accounting principles. The Codification will supersede all existing non-SEC
accounting and reporting standards and, once in effect, all of its content will
carry the same level of authority. Accordingly, the GAAP hierarchy will be
modified to include only two levels of GAAP: authoritative and
non-authoritative. The Company does not expect the provisions of SFAS No. 168 to
have a material effect on its financial reporting.





10





Item
2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations





Certain
statements made in this Quarterly Report on Form 10-Q are “forward looking”
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended). Such statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results, performance, or
achievements of the Company to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, the
Company’s actual results could differ materially from those set forth in the
forward-looking statements. See Part II Item 1A “Risk Factors” below and Item I
Part 1A in the Company’s Annual Report on Form 10-K for the year ended December
31, 2008, for a description of certain factors that might cause such a
difference.





The
following discussion and analysis (in thousands of dollars) should be read in
conjunction with the Company’s unaudited consolidated financial statements and
notes thereto.





On July
1, 2009, the Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with The NewsMarket, Inc. (“The NewsMarket”) and TNM Group
Incorporated (“Merger Sub”), a newly-formed wholly-owned subsidiary of The
NewsMarket. Pursuant to the Merger Agreement, all issued and outstanding shares
of the Company’s common stock and all stock purchase rights will be cancelled
and converted into the right to receive cash in the amount of $0.20 per share.
The Merger Agreement is subject to the approval of the Company’s stockholders,
and upon such approval and consummation of the merger, Merger Sub will merge
with and into the Company, with the Company surviving as a wholly-owned
subsidiary of The NewsMarket. The Company’s board of directors has unanimously
recommended a “for” vote approving the Merger Agreement.





On June
30, 2009, the Company entered into Payoff, Amendment and Settlement Agreements
(the “Payoff Agreements”) with the holders of its variable rate convertible
debentures under which the Company paid $1,590 to fully satisfy the outstanding
debentures with a face value of $2,650. In July 2009, subsequent to signing the
Payoff Agreements and receipt of payment thereunder, the former debenture
holders gave the Company written notice that they intended to file a complaint
seeking to block the transactions contemplated by the Merger Agreement. Such
claims were denied in their entirety by the Company.





On July
27, 2009, the Company entered into an Agreement and General Release (the
“Release”) with the former debenture holders. Under the terms of the Release,
the Company paid $515 to the former debenture holders and provided a general
release from any claims the Company may have, including any counter claims, in
exchange for a general release of any and all claims by the former debenture
holders related to, among other things, the Payoff Agreements and the
transactions contemplated by the Merger Agreement. In addition, the Company paid
$10 in the aggregate to repurchase from the former debenture holders outstanding
warrants to purchase 536,729 shares of the Company’s common stock.





In August
2008, the Company transferred its 76% ownership interests in TTX (US) LLC and
TTX Limited (collectively, “Teletrax”), its digital video monitoring services
segment, to Philips Electronics North America Corporation and Koninklijke
Philips Electronics N.V., respectively (collectively, “Philips”). In October
2008, the Company sold the client list of Medialink UK Limited (“Medialink UK”),
its UK-based media communications services business, to World Television Group
plc (“World”) and subsequently wound down the operation. The unaudited
consolidated financial statements contained in this Form 10-Q reflect both
Teletrax and Medialink UK as discontinued operations in all periods
presented.





Results
of Operations





Six
months ended June 30, 2009, compared to six months ended June 30,
2008





Revenues
for the six months ended June 30, 2009, decreased by $2,974, or 30.6%, as
compared to the 2008 period due primarily to a decline in the volume of
work.





11




Direct
costs decreased by $1,481 in the first six months of 2009 primarily as a result
of a decline in the volume of work. As a percentage of revenue, direct costs
decreased to 38.1% from 41.7% in the comparable 2008 period primarily as a
result of cost cutting initiatives.





Selling,
general, and administrative (“SG&A”) expenses in the first six months of
2009 decreased by $1,879 as compared to the 2008 period, but as a percentage of
revenue increased to 84.0% in the 2009 period from 77.6% in the 2008 period.
SG&A expenses in the 2009 period include a reduction of $441 from the
settlement of a previously accrued severance obligation on which no future
payments will be made. SG&A expenses in the 2008 period include a severance
charge of $196.





Exclusive
of the reduction in SG&A for the severance obligation settlement in the 2009
period and the severance charge in the 2008 period, SG&A expenses in the
first six months of 2009 decreased by $1,242 as compared to the 2008 period, but
as a percentage of revenue increased to 90.5% from 75.6% in the 2008 period.
SG&A expenses decreased as a result of cost cutting initiatives, including
lower payroll costs resulting from headcount reductions, a decrease in occupancy
costs as a result of consolidating certain offices, a decrease in professional
fees as a result of the disposal of businesses, and a reduction in both
marketing and non-billable travel and entertainment expenses.  These
decreases were partially offset by $185 of transaction costs incurred in the
2009 period related to the merger.





There was
no depreciation expense in the first six months of 2009 due to an impairment
charge incurred in 2008 that resulted in no net book value in the Company’s
fixed assets as of December 31, 2008. Depreciation expense was $471 for the
comparable period in 2008.





The
Company incurred a goodwill impairment charge of $3,429 in the first six months
of 2008 based on its goodwill impairment test at that time indicating that the
carrying value of the goodwill exceeded its fair value. No goodwill remained on
the Company’s balance sheet as of June 30, 2008.





The
Company incurred a charge for exit activities of $81 in the first six months of
2009 related to vacating the remaining portion of its office location in
Norwalk, CT. The Company incurred a charge for exit activities of $119 in the
first six months of 2008 related to vacating a portion of its facility in New
York.





The
Company had an operating loss of $1,565 in the first six months of 2009 as
compared to an operating loss of $5,889 in the comparable period in
2008.





The
Company recognized a gain of $294 on the extinguishment of its subordinated
debentures in connection with the Payoff Agreements and the Release in the first
six months of 2009.





The
Company incurred net interest expense of $179 in the first six months of 2009,
as compared to net interest expense of $252 in the 2008 period.





The
results of operations for the six months ended June 30, 2009, include a loss
from discontinued operations of $109, which consisted of a loss from operations
of $82 and a loss on disposal of $27 related to Medialink UK. The results of
operations for the six months ended June 30, 2008, include a loss from
discontinued operations of $4,591, which consisted of a loss from operations of
$3,439 and $1,152 for Teletrax and Medialink UK, respectively.





Three
months ended June 30, 2009, compared to three months ended June 30,
2008





Revenues
for the three months ended June 30, 2009, decreased by $1,296, or 26.7%, as
compared to the 2008 period due primarily to a decline in the volume of
work.





Direct
costs decreased by $592 in the second quarter of 2009 primarily as a result of a
decline in the volume of work. As a percentage of revenue, direct costs
decreased to 37.1% from 39.4% in the comparable 2008 quarter primarily as a
result of cost cutting initiatives.





12




SG&A
expenses in the second quarter of 2009 decreased by $1,201 as compared to the
2008 period, and as a percentage of revenue decreased to 70.7% in the 2009
quarter from 76.6% in the 2008 quarter. SG&A expenses in the 2009 quarter
include a reduction of $441 from the settlement of a previously accrued
severance obligation on which no future payments will be made. SG&A expenses
in the 2008 period include a severance charge of $196.





Exclusive
of the reduction in SG&A for the severance obligation settlement in the 2009
period and the severance charge in the 2008 period, SG&A expenses in the
second quarter of 2009 decreased by $564 as compared to the 2008 quarter, but as
a percentage of revenue increased to 83.1% from 72.5% in the 2008 quarter.
SG&A expenses decreased as a result of cost cutting initiatives, including
lower payroll costs resulting from headcount reductions, a decrease in occupancy
costs as a result of consolidating certain offices, a decrease in professional
fees as a result of the disposal of businesses, and a reduction in both
marketing and non-billable travel and entertainment expenses.  These
decreases were partially offset by $185 of transaction costs incurred in the
2009 quarter related to the merger.





There was
no depreciation expense in the second quarter of 2009 due to an impairment
charge incurred in 2008 that resulted in no net book value in the Company’s
fixed assets as of December 31, 2008. Depreciation expense was $232 for the
comparable quarter in 2008.





The
Company incurred a goodwill impairment charge of $3,429 in the second quarter of
2008 based on its goodwill impairment test at that time indicating that the
carrying value of the goodwill exceeded its fair value.





The
Company incurred an operating loss of $276 in the second quarter of 2009 as
compared to an operating loss of $4,434 in the comparable quarter in
2008.





The
Company recognized a gain of $294 on the extinguishment of its subordinated
debentures in connection with the Payoff Agreements and the Release in the
second quarter of 2009.





The
Company had net interest expense of $90 in the second quarter of 2009, as
compared to net interest expense of $147 in the 2008 quarter.





The
results of operations for the three months ended June 30, 2009, include income
from discontinued operations of $11, which consisted of income from operations
of $8 and a gain on disposal of $3 related to Medialink UK and represent the
settlement of charges previously accrued for less than the amounts originally
estimated. The results of operations for the three months ended June 30, 2008,
include a loss from discontinued operations of $3,534, which consisted of a loss
from operations of $2,614 and $920 for Teletrax and Medialink UK,
respectively.





Financial
Condition





The
Company continues to finance its operations and capital investment requirements
from its existing cash balances, which totaled $2,146 at June 30, 2009. Working
capital in the first six months of 2009 decreased by $3,986 primarily as a
result of the Company paying $1,590 in connection with the Payoff Agreements,
accruing $525 in connection with the Release, and funding its operating losses
during the period.





Cash
flows from operating activities of continuing operations increased by $921
during the first six months of 2009 as compared to the comparable period in 2008
due primarily to a Federal tax refund of $574 received in the 2009 period as
compared to tax payments of $492 in the 2008 period and the receipt of a real
estate security deposit and non-trade receivables during the 2009 period. Such
increases were partially offset by payments made in the 2009 period related to
exit activities. During the first six months of 2009 the Company paid $1,590 to
extinguish its subordinated debentures.





The
Company expects to incur operating losses throughout 2009 as revenues continue
to decline from the prior year in the current economic climate. Revenues in the
first six months of 2009 of $6,732 decreased by $2,974 as compared to the
comparable period in 2008, and the Company currently forecasts a decline in
revenues in the third quarter of 2009 of approximately $1,000 from the
comparable quarter in 2008. In addition, the Company paid $525 in July 2009
related to the Release and during the remainder of 2009 the Company expects to
spend approximately $75 for capital improvements for equipment modernization and
replacement.





13




In July
2009, the Company entered into the Merger Agreement. The Company also continues
to take action to reduce its costs, and has completed, and will continue to
initiate, various measures in an effort to achieve sustained profitability.
There can be no assurance that the merger will be consummated. If the merger is
not consummated or the Company is unable to achieve sustained profitability, the
Company will need to obtain additional financing or investment from third-party
investors.  If the Company is not successful in these efforts, it may not
be able to finance its operations and commitments with its working capital, and
therefore may not be able to continue as a going concern. This would result in
the Company’s inability to realize the carrying value of its assets and
liquidate its liabilities, and would likely result in the Company ceasing
operations.





Critical
Accounting Policies





Management
must make certain estimates and assumptions in preparing the financial
statements of the Company. Certain of these estimates and assumptions relate to
matters that are inherently uncertain as they pertain to future events.
Management believes that the estimates and assumptions used in preparing the
financial statements of the Company were the most appropriate at that time,
although actual results could differ significantly from those estimates under
different conditions. Note 2, “Summary of Significant Accounting Policies,” to
the consolidated financial statements included in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008, provides a detailed discussion
of the various accounting policies of the Company. In addition, a summary of
critical accounting policies is included in Management’s Discussion and Analysis
of Financial Condition and Results of Operations in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008. There have been no
significant changes to the critical accounting policies previously
disclosed.





Recent Accounting
Pronouncements





Statement
of Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events,” was
issued in May 2009 and is effective for all interim and annual financial periods
ending after June 15, 2009. SFAS No. 165 established general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. The
Company does not expect the provisions of SFAS No. 165 to have a material effect
on its financial condition or results of operations.





SFAS No.
168, “The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles,” was issued in July 2009 and is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. SFAS No. 168 replaces SFAS No. 162, “The Hierarchy of
Generally Accepted Accounting Principles,” which was issued in November 2008.
SFAS No. 168 establishes the FASB Accounting Standards Codification (the
“Codification”) as the source of authoritative U.S. generally accepted
accounting principles. The Codification will supersede all existing non-SEC
accounting and reporting standards and, once in effect, all of its content will
carry the same level of authority. Accordingly, the GAAP hierarchy will be
modified to include only two levels of GAAP: authoritative and
non-authoritative. The Company does not expect the provisions of SFAS No. 168 to
have a material effect on its financial reporting.




Item
3. Quantitative and
Qualitative Disclosures About Market Risk





Not
applicable to smaller reporting companies.




Item
4T. Controls and
Procedures





The
Company’s management evaluated, with the participation of the Company’s
principal executive and principal financial officers, the effectiveness of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) as of June 30, 2009. Based on their evaluation, the Company’s principal
executive and principal financial officers concluded that the Company’s
disclosure controls and procedures were effective as of June 30, 2009. The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.





14




There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
occurred during the fiscal quarter ended June 30, 2009, that have materially
affected, or are reasonably likely to affect, the Company’s internal control
over financial reporting.





15





PART
II. OTHER INFORMATION




Item
1. Legal
Proceedings





From time
to time, the Company becomes involved in various legal matters that the Company
considers to be in the ordinary course of business. While the Company is not
presently able to determine the potential liability, if any, related to any such
matters, the Company believes that no such matters, individually or in the
aggregate, will have a material adverse effect on its financial
position.




Item
1A. Risk
Factors





The
following risk factors supplements the Risk Factors disclosed in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008.





Failure to consummate merger
– On July 1, 2009, the Company entered into an Agreement and Plan of Merger with
The NewsMarket, Inc. (the “Merger Agreement”), pursuant to which all issued and
outstanding shares of the Company’s common stock and all stock purchase rights
will be cancelled and converted into the right to receive cash in the amount of
$0.20 per share. The Merger Agreement is subject to stockholder approval and
there can be no assurance that the merger will be consummated. If the merger is
not consummated for any reason, including the Merger Agreement not being
approved, stockholders may not receive any consideration for their
shares.





Available cash – The
Company’s cash balance at June 30, 2009, was $2,146,000. In June 2009, the
Company paid $1,590,000 to fully extinguish its outstanding subordinated
debentures. In July 2009, the Company paid a total of $525,000 and provided a
general release to the former debenture holders in exchange for a general
release of any and all claims from the former debenture holders and the
repurchase from the former debenture holders of outstanding warrants to purchase
536,729 shares of the Company’s common stock. Also in July 2009, the Company
entered into the Merger Agreement, which is subject to stockholder approval.
There can be no assurance that the merger will be consummated. If the merger is
not consummated, the Company’s remaining cash reserves may not be sufficient for
it to continue as a going concern, which may result in the Company’s inability
to realize the carrying value of its assets and liquidate its liabilities, and
would likely result in the Company ceasing operations.





Common stock delisting – In
April 2009 the Company received notice from The NASDAQ Stock Market (“NASDAQ”)
that the Company’s stockholders’ equity as of December 31, 2008, was below the
minimum requirement for continued listing on The NASDAQ Capital Market. In June
2009, upon review of a plan to regain compliance submitted by the Company,
NASDAQ granted an extension until August 3, 2009, for the Company to regain
compliance. On August 4, 2009, the Company received staff determination letter
from NASDAQ noting that the Company had not regained compliance as of that date
and, as a result, the Company’s common stock will be subject to delisting from
NASDAQ unless the Company requests a hearing before a NASDAQ Listing
Qualifications Panel (the “Panel”). The Company has requested such a hearing,
which is scheduled for September 23, 2009, and as a result the Company expects
that its common stock will remain listed on NASDAQ pending the issuance of a
decision by the Panel following the hearing. If the Company’s common stock is
delisted from The NASDAQ Capital Market it may initially trade on the Pink OTC
Market (also known as the “Pink Sheets”) subsequent to such delisting. The
Company may seek to have its common stock traded on the OTC Bulletin Board, but
there can be no assurance that it will be successful in such efforts. A
delisting of the Company’s common stock from The NASDAQ Capital Market could
have an adverse effect on the market for and liquidity of the common
stock.




Item
6. Exhibits





See
Exhibit Index.





16





SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





MEDIALINK
      WORLDWIDE INCORPORATED(Registrant)By:
              /s/ Laurence MoskowitzLaurence
      MoskowitzChairman
      of the Board, Chief Executive Officer, and
                President(Principal
      Executive Officer)Dated:
      August 14, 2009By:
              /s/ Kenneth G. TorosianKenneth
      G. TorosianChief
      Financial Officer, Treasurer, and Secretary
                (Principal
      Financial Officer and Principal Accounting
                Officer)


Dated:
August 14, 2009










EXHIBIT
INDEX





Exhibit No.
            
            Description2.1
            
            Asset
      Purchase Agreement dated as of September 29, 2006, between Medialink
      Worldwide Incorporated and PR Newswire Association, LLC (Incorporated by
      reference to Exhibit 2.1 of Registrant’s Current Report on Form 8-K filed
      on October 5, 2006).2.2
            
            Securities
      Purchase Agreement dated as of August 29, 2008, entered into by and among
      Philips Electronics North America Corporation, Koninklijke Philips
      Electronics N.V., and Medialink Worldwide Incorporated (Incorporated by
      reference to Exhibit No. 2.2 of Registrant’s Current Report on Form 8-K
      filed on September 4, 2008).2.3
            
            Agreement
      dated as of October 1, 2008, among Medialink UK Limited, World Television
      Group plc, and Medialink Worldwide Incorporated (Incorporated by reference
      to Exhibit No. 2.2 of Registrant’s Current Report on Form 8-K filed on
      October 7, 2008).2.4(a)
            
            Agreement
      and Plan of Merger dated as of July 1, 2009, by and between The
      NewsMarket, Inc. and TNM Group Incorporated and Medialink Worldwide
      Incorporated (Incorporated by reference to Exhibit No. 2.1 of Registrant’s
      Current Report on Form 8-K filed on July 8, 2009).2.4(b)
            
            Consent
      and Waiver made as of July 27, 2009, by and among Medialink Worldwide
      Incorporated, The NewsMarket, Inc., and TNM Group Incorporated
      (Incorporated by reference to Exhibit No. 2.1 of the Registrant’s Current
      Report on Form 8-K filed on July 27, 2009).3.1
            
            Amended
      and Restated Certificate of Incorporation of Medialink Worldwide
      Incorporated (Incorporated by reference to Exhibit No. 2.5 of Registrant’s
      Registration Statement on Form 8-A filed on January 16, 1997 (File No.
      000-21989)).3.2
            
            Amended
      and Restated By-Laws of Medialink Worldwide Incorporated dated November 8,
      2007 (Incorporated by reference to Exhibit No. 3.2 of Registrant’s Current
      Report on Form 8-K filed on November 13, 2007).4.1(a)
            
            Preferred
      Stock Rights Agreement, dated as of August 16, 2001, between Medialink
      Worldwide Incorporated and Mellon Investor Services, LLC, including the
      Certificate of Designation, the form of Rights Certificate and the Summary
      of Rights attached thereto as Exhibits A, B, and C, respectively
      (Incorporated by reference to Exhibit No. 4.1 of Registrant’s Registration
      Statement on Form 8-A filed on August 16, 2001 (File No.
      000-21989)).4.1(b)
            
            Amendment
      No. 1 to Preferred Stock Rights Agreement entered into as of July 1, 2009,
      by and between Medialink Worldwide Incorporated and Mellon Investor
      Services LLC (Incorporated by reference to Exhibit No. 4.1 of Registrant’s
      Current Report on Form 8-K filed on July 8, 2009).4.2
            
            Form
      of Variable Rate Convertible Debenture due November 9, 2009 (Incorporated
      by reference to Exhibit No. 4.2 of Registrant’s Current Report on Form 8-K
      filed on November 9, 2004).4.3
            
            Form
      of Common Stock Purchase Warrant (Incorporated by reference to Exhibit No.
      4.1 of Registrant’s Current Report on Form 8-K filed on November 9,
      2004).4.4
            
            Form
      of Registration Rights Agreement, dated as of November 8, 2004
      (Incorporated by reference to Exhibit No. 4.3 of Registrant’s Current
      Report on Form 8-K filed on November 9, 2004).4.5
            
            Form
      of Amendment and Waiver Agreement dated as of October 6, 2008
      (Incorporated by reference to Exhibit No. 4.5 of Registrant’s Current
      Report on Form 8-K filed on October 10, 2008).4.6
            
            Form
      of Payoff, Amendment and Settlement Agreement dated as of June 30, 2009
      (Incorporated by reference to Exhibit No. 4.6 of Registrant’s Current
      Report on Form 8-K filed on July 7, 2009).4.7
            
            Agreement
      and General Release entered into as of July 27, 2009, by and between
      Medialink Worldwide Incorporated and Iroquois Master Fund, Ltd., Rockmore
      Investment Master Fund Ltd., Portside Growth and Opportunity Fund, and
      Smithfield Fiduciary LLC (Incorporated by reference to Exhibit No. 4.7 of
      the Registrant’s Current Report on Form 8-K filed on July 27,
      2009).10.1(a)
            
            Amended
      and Restated Employment Agreement, dated as of December 31, 2005, by and
      between Medialink Worldwide Incorporated and Laurence Moskowitz
      (Incorporated by reference to Exhibit No. 10.1 of Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31,
      2005).10.1(b)
            
            Separation
      Agreement and General Release effective as of July 1, 2009, by and between
      Medialink Worldwide Incorporated and Laurence Moskowitz (Incorporated by
      reference to Exhibit No. 10.1 of Registrant’s Current Report on Form 8-K
      filed on July 8, 2009).10.3(a)
            
            Separation
      Agreement and General Release, dated as of December 30, 2005, by and
      between Medialink Worldwide Incorporated and J. Graeme McWhirter
      (Incorporated by reference to Exhibit No. 10.3 of Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31,
      2005).10.3(b)
            
            Supplement
      to Separation Agreement and General Release, effective as of June 30,
      2009, by and between Medialink Worldwide Incorporated and J. Graeme
      McWhirter (Incorporated by reference to Exhibit No. 10.3(b) of
      Registrant’s Current Report on Form 8-K filed on July 7,
      2009).










Exhibit No.
                
                Description10.4
                
                Asset
      Purchase Agreement, dated December 31, 2004, by and between Medialink
      Worldwide Incorporated and Bacon’s Information Inc. (Incorporated by
      reference to Exhibit No. 10.1 of Registrant’s Current Report on Form 8-K/A
      filed on March 14, 2005).10.5
                
                Agreement
      for the Sale and Purchase of Certain Assets of Medialink UK Limited
      forming part of the Delahaye Business, dated December 31, 2004, by and
      between Medialink UK Limited and Romeike Limited (Incorporated by
      reference to Exhibit No. 10.2 of Registrant’s Current Report on Form 8-K/A
      filed on March 14, 2005).10.7
                
                Medialink
      Worldwide Incorporated 401(k) Employee Savings Plan (Incorporated by
      reference to Exhibit No. 10.7 of Registrant’s Quarterly Report on Form
      10-Q for the quarterly period ended September 30,
2006).10.8
                
                Medialink
      Worldwide Incorporated Amended and Restated Stock Option Plan
      (Incorporated by reference to Exhibit No. 10.8 of Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31,
      2006).10.9
                
                Medialink
      Worldwide Incorporated Amended and Restated 1996 Directors Stock Option
      Plan (Incorporated by reference to Exhibit No. 10.9 of Registrant’s
      Quarterly Report on Form 10-Q for the quarterly period ended March 31,
      2006).10.12(a)
                
                Amended
      and Restated Employment Agreement, dated as of November 12, 2008, by and
      between Medialink Worldwide Incorporated and Kenneth G. Torosian
      (Incorporated by reference to Exhibit No. 10.12 of Registrant’s Quarterly
      Report on Form 10-Q for the quarterly period ended September 30,
      2008).10.12(b)
                
                Amended
      and Restated Separation Agreement and General Release effective as of July
      1, 2009, by and between Medialink Worldwide Incorporated and Kenneth
      Torosian (Incorporated by reference to Exhibit No. 10.12 of Registrant’s
      Current Report on Form 8-K filed on July 27, 2009).10.13(a)
                
                Employment
      Agreement, dated as of September 9, 2005, by and between Medialink
      Worldwide Incorporated and Lawrence A. Thomas (Incorporated by reference
      to Exhibit No. 10.13 of Registrant’s Quarterly Report on Form 10-Q for the
      quarterly period ended September 30, 2005).10.13(b)
                
                Separation
      Agreement and General Release effective as of July 1, 2009, by and between
      Medialink Worldwide Incorporated and Lawrence Thomas (Incorporated by
      reference to Exhibit No. 10.13 of Registrant’s Current Report on Form 8-K
      filed on July 8, 2009).10.15
                
                Securities
      Purchase Agreement dated as of November 8, 2004 among Medialink Worldwide
      Incorporated, Iroquois Capital LP, Portside Growth and Opportunity Fund,
      Rockmore Investment Master Fund Ltd., and Smithfield Fiduciary LLC
      (Incorporated by reference to Exhibit No. 10.1 of Registrant’s Current
      Report on Form 8-K filed on November 9, 2004).10.16
                
                Security
      Agreement among Medialink Worldwide Incorporated, Iroquois Master Fund,
      Ltd., Portside Growth and Opportunity Fund, Rockmore Investment Master
      Fund Ltd., and Smithfield Fiduciary LLC (Incorporated by reference to
      Exhibit No. 10.16 of Registrant’s Current Report on Form 8-K filed on
      October 10, 2008).10.17
                
                Stockholder
      Voting Agreement dated as of July 1, 2009, by and among named
      Shareholders, Medialink Worldwide Incorporated, The NewsMarket, Inc., and
      TNM Group Incorporated (Incorporated by reference to Exhibit No. 10.17 of
      Registrant’s Current Report on Form 8-K filed on July 8,
      2009).31.1
                
                Certification
      of the principal executive officer pursuant to Rules 13a-14(a) and
      15d-14(a) of the Securities Exchange Act of 1934, as
    amended.31.2
                
                Certification
      of the principal financial officer pursuant to Rules 13a-14(a) and
      15d-14(a) of the Securities Exchange Act of 1934, as
    amended.32
                
                Certification
      of the principal executive officer and principal financial officer
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of
2002.