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 March 31, 2009





or





o 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
o





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 o    No
o





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   o                                                                                          
Accelerated filer o





Non-accelerated
filer o (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 o    No
x





The
number of shares of the issuer's common stock outstanding as of April 30, 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)





March
      31,
                        
                        
                        December
      31,2009
                        
                        
                        2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                        
                        $
                        4,686
                        
                        
                        $
                        5,354Accounts
      receivable, net of allowance for doubtful accounts of $59
      and  $84
                        
                        
                        1,663
                        
                        
                        
                        2,190Prepaid
      expenses
                        
                        
                        346
                        
                        
                        
                        264Prepaid
      and refundable taxes
                        
                        
                        53
                        
                        
                        
                        627Other
      current assets
                        
                        
                        500
                        
                        
                        
                        824Total
      current assets
                        
                        
                        7,248
                        
                        
                        
                        9,259Other
      assets
                        
                        
                        200
                        
                        
                        
                        211Total
      assets
                        
                        $
                        7,448
                        
                        
                        $
                        9,470LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      payable
                        
                        $
                        951
                        
                        
                        $
                        1,221Accrued
      expenses and other current liabilities
                        
                        
                        2,922
                        
                        
                        
                        3,172Total
      current liabilities
                        
                        
                        3,873
                        
                        
                        
                        4,393Convertible
      debentures, net of unamortized discount of $112 and $133
                        
                        
                        2,538
                        
                        
                        
                        2,517Other
      long-term liabilities
                        
                        
                        304
                        
                        
                        
                        379Total
      liabilities
                        
                        
                        6,715
                        
                        
                        
                        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
                        
                        
                        28,819
                        
                        
                        
                        28,765Accumulated
      deficit
                        
                        
                        (27,910
                        )
                        
                        
                        (26,412
                        )Accumulated
      other comprehensive loss
                        
                        
                        102
                        
                        
                        
                        106Common
      stock in treasury (at cost, 101,121 shares)
                        
                        
                        (343
                        )
                        
                        
                        (343
                        )Total
      stockholders' equity
                        
                        
                        733
                        
                        
                        
                        2,181Total
      liabilities and stockholders' equity
                        
                        $
                        7,448
                        
                        
                        $
                        9,470





See notes
to unaudited consolidated financial statements


2





MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)


(In
thousands, except per-share amounts)





For
      the three months endedMarch
      31,2009
                      
                      
                      2008Revenues
                      
                      $
                      3,182
                      
                      
                      $
                      4,860Operating
      expenses:Direct
      costs
                      
                      
                      1,247
                      
                      
                      
                      2,136Selling,
      general, and administrative expenses
                      
                      
                      3,143
                      
                      
                      
                      3,821Depreciation
      and amortization
                      
                      
                      -
                      
                      
                      
                      239Charge
      for exit activities
                      
                      
                      81
                      
                      
                      
                      119Total
      operating expenses
                      
                      
                      4,471
                      
                      
                      
                      6,315Operating
      loss
                      
                      
                      (1,289
                      )
                      
                      
                      (1,455
                      )Interest
      expense - net
                      
                      
                      (89
                      )
                      
                      
                      (105
                      )Loss
      from continuing operations before taxes
                      
                      
                      (1,378
                      )
                      
                      
                      (1,560
                      )Income
      tax benefit
                      
                      
                      -
                      
                      
                      
                      (96
                      )Loss
      from continuing operations
                      
                      
                      (1,378
                      )
                      
                      
                      (1,464
                      )Loss
      from discontinued operations, net of tax
                      
                      
                      (120
                      )
                      
                      
                      (1,057
                      )Net
      loss
                      
                      $
                      (1,498
                      )
                      
                      $
                      (2,521
                      )Net
      loss
                      
                      $
                      (1,498
                      )
                      
                      $
                      (2,521
                      )Other
      comprehensive loss
                      
                      
                      (4
                      )
                      
                      
                      (5
                      )Comprehensive
      loss
                      
                      $
                      (1,502
                      )
                      
                      $
                      (2,526
                      )Basic
      and diluted income (loss) per common share:Loss
      from continuing operations
                      
                      $
                      (0.21
                      )
                      
                      $
                      (0.23
                      )Loss
      from discontinued operations
                      
                      
                      (0.02
                      )
                      
                      
                      (0.16
                      )Net
      loss
                      
                      $
                      (0.23
                      )
                      
                      $
                      (0.39
                      )Weighted
      average number of common shares:Basic
      and diluted
                      
                      
                      6,428
                      
                      
                      
                      6,428





See notes
to unaudited consolidated financial statements


3





MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)


(In
thousands of dollars)





For
      the three months endedMarch
      31,2009
                      
                      
                      2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                      
                      $
                      (1,498
                      )
                      
                      $
                      (2,521
                      )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Depreciation
      and amortization
                      
                      
                      -
                      
                      
                      
                      239Deferred
      income taxes
                      
                      
                      -
                      
                      
                      
                      191Loss
      from discontinued operations
                      
                      
                      120
                      
                      
                      
                      1,057Other
                      
                      
                      151
                      
                      
                      
                      270Changes
      in operating assets and liabilities:Accounts
      receivable
                      
                      
                      552
                      
                      
                      
                      647Prepaid
      expenses and other assets
                      
                      
                      245
                      
                      
                      
                      12Prepaid
      and refundable taxes
                      
                      
                      574
                      
                      
                      
                      (316
                      )Accounts
      payable and accrued expenses
                      
                      
                      (604
                      )
                      
                      
                      (403
                      )Other
      liabilities
                      
                      
                      (88
                      )
                      
                      
                      (143
                      )Net
      cash used in operating activities of discontinued
    operations
                      
                      
                      (90
                      )
                      
                      
                      (1,092
                      )Net
      cash used in operating activities
                      
                      
                      (638
                      )
                      
                      
                      (2,059
                      )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchases
      of property and equipment
                      
                      
                      -
                      
                      
                      
                      (143
                      )Expenditures
      on sale of businesses
                      
                      
                      (30
                      )
                      
                      
                      -Net
      cash used in investing activities of discontinued
    operations
                      
                      
                      -
                      
                      
                      
                      (149
                      )Net
      cash used in investing activities
                      
                      
                      (30
                      )
                      
                      
                      (292
                      )CASH
      FLOWS FROM FINANCING ACTIVITIES
                      
                      
                      -
                      
                      
                      
                      -Net
      decrease in cash and cash equivalents
                      
                      
                      (668
                      )
                      
                      
                      (2,351
                      )Cash
      and cash equivalents at beginning of period
                      
                      
                      5,354
                      
                      
                      
                      11,438Cash
      and cash equivalents at end of period
                      
                      $
                      4,686
                      
                      
                      $
                      9,087








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 profitability or to obtain
other sources of financing.  There can be no assurance that the
Company will be successful in such 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 2).





2.  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.  In each of February 2009 and May 2009, the Company received a
payment of approximately $6 related to such gross profit derived by World in the
fourth quarter of 2008 and the first quarter of 2009,
respectively.


5


MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued


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





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





Three months ended March
31,2009
                
                
                2008Revenues
                
                $
                -
                
                
                $
                2,241Loss
      from operations before income taxes
                
                $
                (90
                )
                
                $
                (1,057
                )Income
      tax expense
                
                
                -
                
                
                
                -Loss
      from operations
                
                
                (90
                )
                
                
                (1,057
                )Loss
      on disposal before income taxes
                
                
                (30
                )
                
                
                -Income
      tax expense
                
                
                -
                
                
                
                -Loss
      on disposal
                
                
                (30
                )
                
                
                -Loss
      from discontinued operations
                
                $
                (120
                )
                
                $
                (1,057
                )





The loss
from operations of $90 and the loss on disposal of $30 for the three months
ended March 31, 2009, relates entirely to Medialink UK.  The loss from
operations of $1,057 for the three months ended March 31, 2008, is comprised of
a loss from operations of $825 and $232 for Teletrax and Medialink UK,
respectively.





3.  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 quarterly
periods ended March 31, 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 periods ended March 31, 2009 and 2008,
excluded incremental shares related to stock options and warrants and
incremental shares related to convertible debentures as follows:





Three
      months ended March 31,2009
                
                
                2008Shares
      related to stock options and warrants
                
                
                9,053
                
                
                
                986Shares
      related to convertible debentures
                
                
                654,320
                
                
                
                1,074,074





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.





4.  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 three months ended March 31, 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.


6





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)
                      
                      
                      (98
                      )
                      
                      
                      (16
                      )
                      
                      
                      1
                      
                      
                      
                      (51
                      )
                      
                      
                      (32
                      )Balance
      at March 31, 2009
                      
                      $
                      390
                      
                      
                      $
                      12
                      
                      
                      $
                      (12
                      )
                      
                      $
                      341
                      
                      
                      $
                      49





5.  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 March 31, 2009,
1,247,737 and 164,400 shares remained available for the issuance of stock
options under the Employee Plan and the Directors’ Plan,
respectively.





During
the first three months of 2009, the Company granted 24,000 stock options under
the Directors’ Plan to non-employee directors, all of which vest ratably over a
three-year period.  No stock options were granted under the Employee
Plan during the first three 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 three months ended
March 31, 2009:





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





For the
three months ended March 31, 2009 and 2008, the Company recognized $54 and $89,
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 three months ended March
31, 2009 and 2008.


7


MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued


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





Information
relating to activity in the Employee Plan for the three months ended March 31,
2009, is summarized in the following table.





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
                            
                            
                            (28,200
                            )
                            
                            $
                            8.83Options
      outstanding at March 31, 2009
                            
                            
                            463,525
                            
                            
                            $
                            4.17
                            
                            
                            $
                            0
                            
                            
                            
                            6.37Options
      exercisable at March 31, 2009
                            
                            
                            308,175
                            
                            
                            $
                            4.10
                            
                            
                            $
                            0
                            
                            
                            
                            5.61





Information
relating to activity in the Directors’ Plan for the three months ended March 31,
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 March 31, 2009
                                
                                
                                232,200
                                
                                
                                $
                                3.62
                                
                                
                                
                                
                                
                                
                                $
                                1
                                
                                
                                
                                6.21Options
      exercisable at March 31, 2009
                                
                                
                                178,533
                                
                                
                                $
                                3.96
                                
                                
                                
                                
                                
                                
                                $
                                0
                                
                                
                                
                                5.36





Compensation
expense related to non-vested stock options under both the Employee Plan and the
Directors’ Plan that was not recognized as of March 31, 2009, totaled $330 and
is expected to be recognized over a weighted average period of 1.8
years.  No options were exercised during the three months ended March
31, 2009  and 2008.  The Company has a policy of issuing new
shares of common stock upon the exercise of stock options.





6.  Supplemental
Cash Flow Information:





Cash paid
for interest and income taxes during the three months ended March 31, 2009 and
2008, was as follows:





2009
                  
                  
                  2008Interest
      paid
                  
                  $
                  4
                  
                  
                  $
                  107Income
      taxes paid (refunded) – net
                  
                  $
                  (551
                  )
                  
                  $
                  29


8


MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued


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





There
were no non-cash investing and financing activities for the three months ended
March 31, 2009 and 2008.





7.  Common
Stock Listing





As
previously reported, on April 20, 2009, the Company received notice from the
Nasdaq Stock Market 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 Capital Market in accordance with Nasdaq Marketplace Rule
5550(b)(2).  In May 2009 the Company submitted a plan to regain
compliance.  Upon review of such plan, the Nasdaq Stock Market may
either grant an extension of time of no longer than 105 days for the Company to
regain compliance or issue a notice of delisting.


9





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.





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.





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.





Results
of Operations





Three
months ended March 31, 2009, compared to three months ended March 31,
2008





Revenues
for the three months ended March 31, 2009, decreased by $1,678, or 34.5%, as
compared to the 2008 period due primarily to a decline in the volume of
work.





Direct
costs decreased by $889 in the first quarter of 2009 primarily as a result of a
decline in the volume of work.  As a percentage of revenue, direct
costs decreased to 39.2% from 44.0% in the comparable 2008 quarter primarily as
a result of cost cutting initiatives.





Selling,
general, and administrative (“SG&A”) expenses in the first quarter of 2009
decreased by $678 as compared to the 2008 period, but as a percentage of revenue
increased to 98.8% in the 2009 quarter from 78.6% 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, and
a reduction in both marketing and non-billable travel and entertainment
expenses.





There was
no depreciation expense in the first 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 $239 for the
comparable quarter in 2008.





The
Company incurred a charge for exit activities of $81 in the first quarter 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 quarter of 2008 related to vacating a portion of its facility
in New York.





The
Company had an operating loss of $1,289 in the first quarter of 2009 as compared
to an operating loss of $1,455 in the comparable quarter in 2008.





The
Company had net interest expense of $89 in the first quarter of 2009, as
compared to net interest expense of $105 in the 2008 quarter.


10


The
results of operations for the three months ended March 31, 2009, include a loss
from discontinued operations of $120, which consisted of a loss from operations
of $90 and a loss on disposal of $30 related to Medialink UK.  The
results of operations for the three months ended March 31, 2008, include a loss
from discontinued operations of $1,057, which consisted of a loss from
operations of $825 and $232 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 $4,686 at March 31,
2009.  Working capital in the first three months of 2009 decreased by
$1,491 primarily as a result of the Company funding operating losses during the
period.





Cash
flows from operating activities of continuing operations increased by $419
during the first three 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 an increase in prepaid and refundable taxes of $316 in the 2008
period.  Such increase was partially offset by a decrease of $463 in
cash generated from operations.





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 quarter of 2009 of $3,182 decreased by
$1,678 as compared to the comparable quarter in 2008, and the Company currently
forecasts a decline in revenues in the second quarter of 2009 of approximately
$1,400 from the comparable quarter in 2008.  In addition, during the
remainder of 2009 the Company expects to spend approximately $232 related to
existing severance obligations to terminated employees that are included as a
component of “other liabilities,” $375 related to vacant real estate
obligations, $100 for costs associated with the disposal of Medialink UK, and
$150 for capital improvements for equipment modernization and
replacement.





The
Company continues to pursue various strategic alternatives, including obtaining
additional financing or investment from potentially interested third-party
investors or buyers.  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 profitability.  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, which would result in the Company’s inability to realize the
carrying value of its assets and liquidate its liabilities.





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.





Item
3. Quantitative and
Qualitative Disclosures About Market Risk





Not
applicable to smaller reporting companies.


11


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 March 31, 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 March 31,
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.





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 March 31, 2009, that have materially
affected, or are reasonably likely to affect, the Company’s internal control
over financial reporting.


12





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





Common stock delisting– In
April 2009 the Company received notice from the Nasdaq Stock Market 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
May 2009 the Company submitted a plan to regain compliance.  Upon
review of such plan, the Nasdaq Stock Market may either grant an extension of
time of no longer than 105 days for the Company to regain compliance or issue a
notice of delisting.  If the Company is delisted from the Nasdaq
Capital Market its common stock may initially trade on the Pink OTC Market (the
“Pink Sheets”) subsequent to such delisting.  The Company will 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.  Failure to have
its common stock listed on the OTC Bulletin Board could result in the
acceleration of the principal payment of the Company’s convertible
debentures.





Item
6.  Exhibits





See
Exhibit Index.


13





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:
      May 15, 2009By:
                              /s/
      Kenneth G. TorosianKenneth
      G. TorosianChief
      Financial Officer, Treasurer, and Secretary (Principal Financial Officer
      and Principal Accounting Officer)Dated:
      May 15, 2009


14





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 the 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).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
                
                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)).4.2
                
                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).10.1
                
                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 the Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31,
      2005).10.3
                
                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 the Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31,
      2005).10.4
                
                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 the 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 the 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 the 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 the 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 the Registrant’s
      Quarterly Report on Form 10-Q for the quarterly period ended March 31,
      2006).10.12
                
                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 the Registrant’s
      Quarterly Report on Form 10-Q for the quarterly period ended September 30,
      2008).


15





10.13
              
              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).10.15
              
              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).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.


16