United States Securities and Exchange Commission


Washington,
D.C. 20549


Form
10-Q/A





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.





EXPLANATORY
NOTE




The
Registrant is filing this Amendment to its quarterly report on Form 10-Q filed
August 14, 2009, to supplement Exhibits 31.1 and 31.2 of this report by adding
to the certifications of the Registrant’s principal executive officer and
principal financial officer, statements as to these officers’ responsibility for
internal control over financial reporting and their participation in the design
of such controls.  The foregoing amendments have not resulted in any
modification to the consolidated financial statements included in Item 1 of Part
I or the disclosure included in Item 4T of Part I of this report on Form 10-Q/A,
or any of the information contained in Registrant’s Form 10-Q filed August 14,
2009, except for the new certifications filed as Exhibits 31.3 and 31.4 to this
Form 10-Q/A.




FORWARD LOOKING
STATEMENTS




Certain statements made in this Report on Form 10-Q/A 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” in the
Company’s
Quarterly Report on Form 10-Q filed August 14, 2009 and Part I Item 1A “Risk
Factors” in
the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008 filed April 15,
2009, for a description of certain factors that might cause such a
difference.










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




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 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




See notes
to unaudited consolidated financial statements


3


MEDIA LINK
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




See notes
to unaudited consolidated financial statements


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
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.


11


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.




PART II – OTHER INFORMATION


Item 6. Exhibits






12





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/
      James K. LonerganJames
      K. LonerganChief
      Executive OfficerDated:
      November 18, 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.
      (Incorporated by reference to Exhibit 31.1 of the Registrant’s Quarterly
      Report on Form 10-Q filed on August 14, 2009).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.  (Incorporated by reference to Exhibit 31.2 of the
      Registrant’s Quarterly Report on Form 10-Q filed on August 14,
      2009).31.3
                  
                  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.31.4
                  
                  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.  (Incorporated by reference to
      Exhibit 32 of the Registrant’s Quarterly Report on Form 10-Q filed on
      August 14, 2009).