UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549





FORM
10-Q











(Mark
one)


x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
quarterly period ended MARCH 31, 2009





o
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from ______________ to _____________











Commission
File Number: 000-50586





MARKETING
WORLDWIDE CORPORATION


(Exact
name of registrant as specified in its charter)





DELAWARE
              
              68-0566295(State
      of incorporation)
              
              (IRS
      Employer ID Number)





2212
GRAND COMMERCE DR.


HOWELL,
MICHIGAN 48855


(Address
of principal executive offices)





631-444-
8090


(Registrant's
telephone number, including area code)











NOT
APPLICABLE


(Former
name, former address and former fiscal year,


if
changed since last report)











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.                         x  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
                   ̈
                  Smaller
      reporting company x(Do
      not check if a smaller reportingcompany)





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





Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date. May 15, 2009: 16,845,091









MARKETING
WORLDWIDE CORPORATION





Form 10-Q
for the Quarter ended March 31, 2009





Table of
Contents





PAGEPART
      I - FINANCIAL INFORMATIONITEM
      1 - FINANCIAL STATEMENTS
                                            
                                            F-1ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
                                            
                                            2ITEM
      3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
                                            
                                            8ITEM
      4 - CONTROLS AND PROCEDURES
                                            
                                            8PART
      II - OTHER INFORMATIONITEM
      1 - LEGAL PROCEEDINGS
                                            
                                            8ITEM
      2 - RECENT SALES OF UNREGISTERED SECURITIES AND USE OF
      PROCEEDS
                                            
                                            8ITEM
      3 - DEFAULTS UPON SENIOR SECURITIES
                                            
                                            8ITEM
      4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                                            
                                            8ITEM
      5 - OTHER INFORMATION
                                            
                                            8ITEM
      6 - EXHIBITS
                                            
                                            9SIGNATURES
                                            
                                            10





Page
1




MARKETING
WORLDWIDE CORPORATION


CONDENSED
CONSOLIDATED BALANCE SHEETS





March 31,
                  
                  
                  September 30,2009
                  
                  
                  2008(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                  
                  $
                  260,085
                  
                  
                  $
                  1,003,071Accounts
      receivable, net
                  
                  
                  621,538
                  
                  
                  
                  1,150,871Inventories
                  
                  
                  945,336
                  
                  
                  
                  1,107,478Deferred
      income taxes
                  
                  
                  80,470
                  
                  
                  
                  188,271Other
      current assets
                  
                  
                  67,400
                  
                  
                  
                  102,577Total
      current assets
                  
                  
                  1,974,829
                  
                  
                  
                  3,552,268Property,
      plant and equipment, net
                  
                  
                  3,292,694
                  
                  
                  
                  3,456,624Other
      assets:Other
      intangible assets
                  
                  
                  95,000
                  
                  
                  
                  110,000Capitalized
      finance costs, net
                  
                  
                  404,078
                  
                  
                  
                  470,043Other
      assets, net
                  
                  
                  8,910
                  
                  
                  
                  71,412Total
      assets
                  
                  $
                  5,775,511
                  
                  
                  $
                  7,660,347LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current
      liabilities:Bank
      line of credits
                  
                  $
                  602,050
                  
                  
                  $
                  400,000Notes
      payable and capital leases, current portion
                  
                  
                  1,337,290
                  
                  
                  
                  1,356,002Accounts
      payable
                  
                  
                  597,028
                  
                  
                  
                  865,058Warranty
      liability
                  
                  
                  126,983
                  
                  
                  
                  126,983Other
      current liabilities
                  
                  
                  613,419
                  
                  
                  
                  621,117Total
      current liabilities
                  
                  
                  3,276,770
                  
                  
                  
                  3,369,160Long
      term debt:Notes
      payable, long term
                  
                  
                  630,410
                  
                  
                  
                  653,776Capital
      leases, long term
                  
                  
                  30,110
                  
                  
                  
                  38,230Total
      liabilities
                  
                  
                  3,937,290
                  
                  
                  
                  4,061,166Interest
      in non-controlling entity
                  
                  
                  -
                  
                  
                  
                  134,298Series
      A convertible preferred stock, $0.001 par value; 3,500,000 shares issued
      and outstanding
                  
                  
                  3,499,950
                  
                  
                  
                  3,499,950Stockholders'
      Equity (Deficiency)Series
      B convertible preferred stock, $0.001 par value, 10,000,000 authorized;
      1,192,308 shares issued and outstanding as of March 31, 2009
      and  September 30, 2008
                  
                  
                  1,192
                  
                  
                  
                  1,192Common
      stock, $0.001 par value, 100,000,000 shares authorized; 16,845,091 and
      16,545,091 shares issued and outstanding as of March 31, 2009 and
      September 30, 2008, respectively
                  
                  
                  16,845
                  
                  
                  
                  16,545Additional
      paid in capital
                  
                  
                  9,165,966
                  
                  
                  
                  8,993,683Accumulated
      deficit
                  
                  
                  (10,753,704
                  )
                  
                  
                  (8,961,715
                  )Accumulated
      other comprehensive income (loss)
                  
                  
                  (92,028
                  )
                  
                  
                  (84,772
                  )Total
      stockholders' equity (deficiency)
                  
                  
                  (1,661,729
                  )
                  
                  
                  (35,067
                  )Total
      Liabilities and Stockholders' Equity (Deficiency)
                  
                  $
                  5,775,511
                  
                  
                  $
                  7,660,347





See the
accompanying notes to the unaudited condensed consolidated financial
statements





F-1




MARKETING
WORLDWIDE CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited)





Three months ended March 31,
                
                
                Six months ended March 31,2009
                
                
                2008
                
                
                2009
                
                
                2008(Restated)
                
                
                
                
                
                (Restated)Revenue:Sales,
      net
                
                $
                599,131
                
                
                $
                1,760,966
                
                
                $
                1,743,125
                
                
                $
                4,157,831Services
                
                
                27,247
                
                
                
                532,514
                
                
                
                279,413
                
                
                
                868,572Total
      revenue
                
                
                626,378
                
                
                
                2,293,480
                
                
                
                2,022,538
                
                
                
                5,026,403Cost
      of sales:Cost
      of goods sold
                
                
                298,265
                
                
                
                1,059,294
                
                
                
                1,092,410
                
                
                
                2,716,564Cost
      of services provided
                
                
                266,869
                
                
                
                369,644
                
                
                
                392,998
                
                
                
                593,923Total
      cost of sales
                
                
                565,134
                
                
                
                1,428,938
                
                
                
                1,485,408
                
                
                
                3,310,487Gross
      profit
                
                
                61,244
                
                
                
                864,542
                
                
                
                537,130
                
                
                
                1,715,916Operating
      expenses:Selling,
      general and administrative expenses
                
                
                906,007
                
                
                
                936,782
                
                
                
                2,061,122
                
                
                
                2,043,068Loss
      from operations
                
                
                (844,763
                )
                
                
                (72,240
                )
                
                
                (1,523,992
                )
                
                
                (327,152
                )Financing
      expenses
                
                
                (27,578
                )
                
                
                (43,017
                )
                
                
                (181,475
                )
                
                
                (84,978
                )Other
      income (expense), net
                
                
                9,373
                
                
                
                (10,752
                )
                
                
                26,680
                
                
                
                (3,317
                )Loss
      before provision for income taxes
                
                
                (862,968
                )
                
                
                (126,009
                )
                
                
                (1,678,787
                )
                
                
                (415,447
                )Provision
      for income taxes (benefit)
                
                
                -
                
                
                
                (114
                )
                
                
                -
                
                
                
                (4,502
                )Loss
      before minority interest
                
                
                (862,968
                )
                
                
                (125,895
                )
                
                
                (1,678,787
                )
                
                
                (410,945
                )Income
      (Loss)  from minority interest
                
                
                8,000
                
                
                
                (21,644
                )
                
                
                44,298
                
                
                
                (30,802
                )Net
      loss
                
                
                (854,968
                )
                
                
                (147,539
                )
                
                
                (1,634,489
                )
                
                
                (441,747
                )Preferred
      stock dividend
                
                
                (78,750
                )
                
                
                (78,750
                )
                
                
                (157,500
                )
                
                
                (157,500
                )NET
      LOSS AVAILABLE TO COMMON STOCKHOLDERS
                
                $
                (933,718
                )
                
                $
                (226,289
                )
                
                $
                (1,791,989
                )
                
                $
                (599,247
                )Loss
      per share, basic
                
                $
                (0.05
                )
                
                $
                (0.01
                )
                
                $
                (0.11
                )
                
                $
                (0.03
                )Loss
      per share, fully diluted
                
                $
                (0.05
                )
                
                $
                (0.01
                )
                
                $
                (0.11
                )
                
                $
                (0.03
                )Weighted
      average common stock outstandingBasic
                
                
                16,698,352
                
                
                
                15,893,228
                
                
                
                16,770,915
                
                
                
                15,827,798Fully
      Diluted
                
                
                16,698,352
                
                
                
                15,893,228
                
                
                
                16,770,915
                
                
                
                15,827,798Comprehensive
      loss:Net
      Loss
                
                $
                (933,718
                )
                
                $
                (226,289
                )
                
                $
                (1,791,989
                )
                
                $
                (599,247
                )Foreign
      currency translation loss
                
                
                (5,218
                )
                
                
                26,942
                
                
                
                (7,256
                )
                
                
                31,134Comprehensive
      loss
                
                $
                (938,936
                )
                
                $
                (199,347
                )
                
                $
                (1,799,245
                )
                
                $
                (568,113
                )





See the
accompanying notes to the unaudited condensed consolidated financial
statements




F-2




MARKETING
WORLDWIDE CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited)





Six months ended March 31,2009
                    
                    
                    2008(Restated)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
                    
                    $
                    (1,634,489
                    )
                    
                    $
                    (441,747
                    )Adjustments
      to reconcile net income (loss) to cash (used
      in)  operations:Depreciation
      and amortization
                    
                    
                    228,924
                    
                    
                    
                    207,912Amortization
      of deferred financing costs
                    
                    
                    65,965
                    
                    
                    
                    66,691Fair
      value of vested employee options
                    
                    
                    92,583
                    
                    
                    
                    -Interest
      in non controlling entity
                    
                    
                    (44,298
                    )
                    
                    
                    30,802(Increase)
      decrease in:Accounts
      receivable
                    
                    
                    529,333
                    
                    
                    
                    (883,526
                    )Inventory
                    
                    
                    162,142
                    
                    
                    
                    (406,427
                    )Other
      current assets
                    
                    
                    142,978
                    
                    
                    
                    (10,889
                    )Other
      assets
                    
                    
                    62,502
                    
                    
                    
                    (12,896
                    )Increase
      (decrease) in:Accounts
      payable
                    
                    
                    (345,530
                    )
                    
                    
                    458,256Other
      current liabilities
                    
                    
                    (7,698
                    )
                    
                    
                    (503,576
                    )Net
      cash used in operating activities:
                    
                    
                    (747,588
                    )
                    
                    
                    (1,495,400
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property and equipment
                    
                    
                    (49,994
                    )
                    
                    
                    (498,566
                    )Net
      cash used in investing activities:
                    
                    
                    (49,994
                    )
                    
                    
                    (498,566
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Distribution
      by non controlling entity
                    
                    
                    (90,000
                    )
                    
                    
                    (31,893
                    )Proceeds
      from common stock subscription
                    
                    
                    -
                    
                    
                    
                    2,000,000Proceeds
      from (repayments of) lines of credit
                    
                    
                    202,050
                    
                    
                    
                    (600,000
                    )Repayments
      of notes payable and capital leases
                    
                    
                    (50,198
                    )
                    
                    
                    (75,678
                    )Net
      cash provided by financing activities
                    
                    
                    61,852
                    
                    
                    
                    1,292,429Effect
      of currency rate change on cash:
                    
                    
                    (7,256
                    )
                    
                    
                    31,134Net
      (decrease) in cash and cash equivalents
                    
                    
                    (742,986
                    )
                    
                    
                    (670,403
                    )Cash
      and cash equivalents, beginning of period
                    
                    
                    1,003,071
                    
                    
                    
                    2,270,313Cash
      and cash equivalents, end of period
                    
                    $
                    260,085
                    
                    
                    $
                    1,599,910SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Cash
      paid during year for interest
                    
                    $
                    47,814
                    
                    
                    $
                    84,978Cash
      paid during year for taxes
                    
                    $
                    -
                    
                    
                    $
                    -NON-CASH
      TRANSACTIONS:Common
      stock issued in settlement of debt
                    
                    $
                    80,000
                    
                    
                    $
                    -




See the
accompanying notes to the unaudited condensed consolidated financial
statements





F-3




MARKETING
WORLDWIDE CORPORATION


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES





GENERAL





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.





In the
opinion of management, all adjustments consisting of normal recurring accruals
considered necessary for a fair presentation have been included. Accordingly,
the results from operations for the three and six months period ended March 31,
2009, are not necessarily indicative of the results that may be expected for the
year ended September 30, 2009. The unaudited condensed consolidated financial
statements should be read in conjunction with the September 30, 2008 financial
statements and footnotes thereto included in the Company's SEC Form
10K.





BUSINESS
AND BASIS OF PRESENTATION





Marketing
Worldwide Corporation (the "Company", "Registrant" or "MWW"), is incorporated
under the laws of the State of Delaware in July 2003. The Company is engaged,
through its wholly-owned subsidiary, Marketing Worldwide LLC ("MWWLLC"), in the
design, import and distribution of automotive accessories for motor vehicles in
the automotive aftermarket industry and provides design services for large
automobile manufacturers. The Company operates the wholly owned subsidiary
Colortek, Inc in Baroda Michigan and Modelworxx GmbH in Munich,
Germany.





The
consolidated financial statements include the accounts of the Registrant and its
wholly-owned subsidiaries, Marketing Worldwide LLC, Colortek, Inc., MW Global
Limited which owns 100% of the outstanding ownership and economical interest in
Modelworxx GmbH. Effective January 1, 2005, the consolidated financial
Statements also include a variable interest entity (VIE) of which the LLC is the
primary beneficiary as further described in Note H. All significant
inter-company transactions and balances, including those involving the VIE, have
been eliminated in consolidation.





REVENUE
RECOGNITION





For
revenue from products and services, the Company recognizes revenue in accordance
with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services have been rendered; (3) the
selling price is fixed and determinable; and (4) collectability is reasonably
assured. Determination of criteria (3) and (4) are based on management's
judgments regarding the fixed nature of the selling prices of the products
delivered/services rendered and the collectability of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded.





The
Company defers any revenue for which the product has not been delivered or
services has not been rendered or is subject to refund until such time that the
Company and the customer jointly determine that the product has been delivered
or services have been rendered or no refund will be required.





On
December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB) No.
104, Revenue Recognition. The staff updated and revised the existing revenue
recognition in Topic 13, Revenue Recognition, to make its interpretive guidance
consistent with current accounting guidance, principally EITF Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables." Also, SAB 104 incorporates
portions of the Revenue Recognition in Financial Statements - Frequently Asked
Questions and Answers document that the SEC staff considered relevant and
rescinds the remainder. The company's revenue recognition policies are
consistent with this guidance; therefore, this guidance will not have an
immediate impact on the company's consolidated financial
statements.





Revenues
on the sale of products, net of estimated costs of returns and allowance, are
recognized at the time products are shipped to customers, legal title has
passed, and all significant contractual obligations of the Company have been
satisfied. Products are generally sold on open accounts under credit terms
customary to the geographic region of distribution. The Company performs ongoing
credit evaluations of the customers and generally does not require collateral to
secure the accounts receivable.




F-4




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





The
Company generally warrants its products to be free from material defects and to
conform to material specifications for a period of three (3) years. The cost of
replacing defective products and product returns have been immaterial and within
management's expectations. In the future, when the company deems warranty
reserves are appropriate that such costs will be accrued to reflect anticipated
warranty costs.





CASH
AND CASH EQUIVALENTS





For the
purpose of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with an original maturity of three months or less to
be cash equivalents.





CONCENTRATION
OF CREDIT RISK





Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash and cash equivalents.
The Company places its cash and temporary cash investments with credit quality
institutions. At times, such investments may be in excess of applicable
government mandated insurance limit.





ACCOUNTING
FOR BAD DEBT AND ALLOWANCES





Bad debts
and allowances are provided based on historical experience and management's
evaluation of outstanding accounts receivable. Management evaluates past due or
delinquency of accounts receivable based on the open invoices aged on due date
basis. There was no allowance for doubtful accounts at March 31, 2009 and
September 30, 2008.





INVENTORIES





The
inventory consists of work in process and finished goods substantially ready for
resale purposes. The Company purchases the merchandise on delivered duty paid
basis. The amounts for cost of goods sold during the three and six month periods
ended March 31, 2009 and 2008 are removed from inventory on weighted average
cost method.





LONG
LIVED ASSETS





The
Company has adopted Statement of Financial Accounting Standards No. 144 ("SFAS
144"). The Statement requires those long-lived assets and certain identifiable
intangibles held and used by the Company be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to
sell.





PROPERTY,
PLANT AND EQUIPMENT





Property,
plant and equipment are carried at cost. Depreciation and amortization are
calculated using the straight-line method over the estimated useful lives of the
assets. Tools, office equipment, automobiles, furniture and fixtures, and
building are depreciated over 2-year to 40-year lives. Assets acquired under
capitalized lease arrangements are recorded at the present value of the minimum
lease payments. Gains and losses from the retirement or disposition of property
and equipment are included in operations in the period incurred.





ADVERTISING





The
Company follows the policy of charging the cost of advertising to expenses as
incurred. For the six month periods ended March 31, 2009 and 2008, advertising
costs were not material to the statement of income.





F-5




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





RESEARCH
AND DEVELOPMENT COSTS





The
Company accounts for research and development cost in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No 2 ("SFAS 2"), "Accounting for Research and Development Costs".
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been
achieved.




BASIC
AND DILUTED INCOME (LOSS) PER SHARE





Basic and
diluted loss per common share is based upon the weighted average number of
common shares outstanding during the fiscal year computed under the provisions
of SFAS No. 128, Earnings Per Share. Common share equivalents totaling 1,490,000
and 3,500,000 at March 31, 2009 and 2008, respectively, were not considered as
they would be anti-dilutive and had no impact on loss per share for any periods
presented.





INCOME
TAXES





The
Company follows SFAS No. 109, "ACCOUNTING FOR INCOME TAXES" (SFAS No. 109) for
recording the provision for income taxes. Deferred tax assets and liabilities
are computed based upon the difference between the financial statement and
income tax basis of assets and liabilities using the enacted marginal tax rate
applicable when the related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on the changes in
the asset or liability during each period. If available evidence suggests that
it is more likely than not that some portion or all of the deferred tax assets
will not be realized, a valuation allowance is required to reduce the deferred
tax assets to the amount that is more likely than not to be realized. Future
changes in such valuation allowance are included in the provision for deferred
income taxes in the period of change. Deferred income taxes may arise from
temporary differences resulting from income and expense items reported for
financial accounting and tax purposes in different periods. Deferred taxes are
classified as current or non-current, depending on the classification of assets
and liabilities to which they relate. Deferred taxes arising from temporary
differences that are not related to an asset or liability are classified as
current or non-current depending on the periods in which the temporary
differences are expected to reverse.





The
Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes ("FIN 48"), on October 1, 2007. Previously, the
Company had accounted for tax contingencies in accordance with SFAS No. 5,
Accounting for Contingencies. As required by Interpretation 48, which clarifies
SFAS No. 109, Accounting for Income Taxes, the Company recognizes the financial
statement benefit of a tax position only after determining that the relevant tax
authority would more likely than not sustain the position following an audit.
For tax positions meeting this standard, the amount recognized in the financial
statements is the largest benefit that has a greater than 50 percent likelihood
of being realized upon ultimate settlement with the relevant tax
authority.





At the
adoption date, the Company applied Interpretation 48 to all tax positions for
which the statute of limitations remained open. The adoption of FIN 48 did not
have a material impact in the financial statements during the year ended
September 30, 2008 or the six months ended March 31, 2009.





USE
OF ESTIMATES





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





F-6




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





COMPREHENSIVE
INCOME (LOSS)





The
Company adopted Statement of Financial Accounting Standards No. 130; "Reporting
Comprehensive Income" (SFAS) No. 130 establishes standards for the reporting and
displaying of comprehensive income and its components. Comprehensive income is
defined as the change in equity of a business during a period from transactions
and other events and circumstances from non-owners sources. It includes all
changes in equity during a period except those resulting from investments by
owners and distributions to owners. SFAS No. 130 requires other comprehensive
income (loss) to include foreign currency translation adjustments and unrealized
gains and losses on available for sale securities.





DERIVATIVE
FINANCIAL INSTRUMENTS





The
Company accounts for derivative financial instruments and hedging activities in
accordance with Statement of Financial Accounting Standards (SFAS) No. 133,
"Accounting for Derivative Instruments and Hedging Activities (as amended)"
(SFAS 133). In accordance with this standard, derivative instruments are
recorded on the balance sheet as either an asset or liability measured at its
fair value. Changes in the fair value of derivative instruments are either
recognized in income immediately to offset the gain or loss on the hedged item,
or deferred and recorded in Stockholders' Equity as a component of Accumulated
other comprehensive (loss) income. The ineffective portion of the change in fair
value of a hedge is recognized in income immediately. The Company has designated
an interest rate swap that effectively fixes the floating prime-based interest
rate on a mortgage obligation as a cash flow hedge. See Note E for more
information on the Company's interest rate swap.





FUNCTIONAL
CURRENCY





The
functional currency of the Companies is the U. S. dollar. When a transaction is
executed in a foreign currency, it is re-measured into U. S. dollars based on
appropriate rates of exchange in effect at the time of the transaction. At each
balance sheet date, recorded balances that are denominated in a currency other
than the functional currency of the Companies are adjusted to reflect the
current exchange rate. The resulting foreign currency transactions gains
(losses) are included in general and administrative expenses in the accompanying
consolidated statements of operations.





RECLASSIFICATION





Certain
reclassifications have been made to conform to prior periods' data to the
current presentation. These reclassifications had no effect on reported net
income (loss).





ACCOUNTING
FOR VARIABLE INTEREST ENTITIES





In
December 2003, the FASB issued a revision to FASB Interpretation ("FIN") No. 46,
"Consolidation of Variable Interest Entities" (FIN No. 46R). FIN No. 46R
clarifies the application of ARB No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity risk for the
entity to finance its activities without additional subordinated financial
support. FIN No. 46R requires the consolidation of these entities, known as
variable interest entities, by the primary beneficiary of the entity. The
primary beneficiary is the entity, if any, that will absorb a majority of the
entities expected losses, receive a majority of the entity's expected residual
returns, or both.





Pursuant
to the effective date of a related party lease obligation, the Company adopted
FIN 46R on January 1, 2005. This resulted in the consolidation of one variable
interest entity (VIE) of which the Company is considered the primary
beneficiary. The Company's variable interest in this VIE is the result of
providing certain secured debt mortgage guarantees on behalf of a limited
liability company that leases warehouse and general offices located in the city
of Howell, Michigan.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





Statement
of Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments," requires disclosure of the fair value of certain
financial instruments. The carrying value of cash and cash equivalents, accounts
payable and short-term borrowings, as reflected in the balance sheets,
approximate fair value because of the short-term maturity of these instruments.
The carrying amount for the Series A convertible preferred stock approximate
fair value.




F-7




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





SEGMENT
INFORMATION





Statement
of Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
therein materially represents all of the financial information related to the
Company's principal operating segment.





STOCK
BASED COMPENSATION





Effective
for the year beginning January 1, 2006, the Company has adopted SFAS 123 (R)
"Share-Based Payment" which supersedes APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and eliminates the intrinsic value method that was provided
in SFAS 123 for accounting of stock-based compensation to employees. The Company
made no employee stock-based compensation grants before December 31, 2005 and
therefore has no unrecognized stock compensation related liabilities or expense
unvested or vested prior to 2006.





The
Company did not grant employee options during the six month periods ended March
31, 2009 and 2008. The Company recorded the fair value of the vested portion of
previously issued employee options of $92,583 for the six months ended March 31,
2009.





NEW
ACCOUNTING PRONOUNCEMENTS





In
December 2007, the FASB issued SFAS No. 141(R), "Business Combinations"
("SFAS No. 141(R)"), which establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in an
acquiree, including the recognition and measurement of goodwill acquired in a
business combination. SFAS No. 141R is effective as of the beginning of the
first fiscal year beginning on or after December 15, 2008. Earlier adoption
is prohibited. The Company does not expect the adoption of SFAS No. 141R in 2009
will have a material effect on its consolidated financial position, results of
operations or cash flows.





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interest in
Consolidated Financial Statements, an amendment of ARB No. 51”
(“SFAS No. 160”), which will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests
and classified as a component of equity within the consolidated balance sheets.
SFAS No. 160 is effective as of the beginning of the first fiscal year beginning
on or after December 15, 2008. . Earlier adoption is prohibited. The
Company does not expect the adoption of SFAS No. 160 in 2009 will have a
material effect on its consolidated financial position, results of operations or
cash flows.





In
December 2007, the FASB ratified the consensus in Emerging Issues Task Force
(EITF) Issue No. 07-1, “Accounting for Collaborative Arrangements”
(EITF 07-1). EITF 07-1 defines collaborative arrangements and requires
collaborators to present the result of activities for which they act as the
principal on a gross basis and report any payments received from (made to) the
other collaborators based on other applicable authoritative accounting
literature, and in the absence of other applicable authoritative literature, on
a reasonable, rational and consistent accounting policy is to be elected.
EITF 07-1 also provides for disclosures regarding the nature and purpose of
the arrangement, the entity’s rights and obligations, the accounting policy for
the arrangement and the income statement classification and amounts arising from
the agreement.





EITF 07-1
will be effective for fiscal years beginning after December 15, 2008, which
will be the Company’s fiscal year 2009, and will be applied as a change in
accounting principle retrospectively for all collaborative arrangements existing
as of the effective date. The
Company does not expect the adoption of EITF 07-1 in 2009 will have a
material effect on its consolidated financial position, results of operations or
cash flows





F-8




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





NEW
ACCOUNTING PRONOUNCEMENTS (continued)





In
June 2008, the FASB ratified the consensus on Emerging Issues Task Force
(EITF) Issue 07-5, “Determining whether an Instrument (or Embedded Feature)
is indexed to an Entity’s Own Stock.” This issue addresses whether an instrument
(or an embedded feature) is indexed to an entity’s own stock, which is the first
part of the scope exception in paragraph 11(a) of SFAS No. 133, for
purposes of determining whether the instrument should be classified as an equity
instrument or accounted for as a derivative instrument. The provisions of EITF
Issue No. 07-5 are effective for financial statements issued for fiscal
years beginning after December 15, 2008 and will be applied retrospectively
through a cumulative effect adjustment to retained earnings for outstanding
instruments as of that date. Earlier adoption is prohibited and the Company is
currently evaluating the effect, if any, that the adoption will have on its
financial position, results of operations or cash flows.





In March
2008, the FASB” issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities - an amendment to FASB Statement No.
133” (“SFAS No. 161”).  SFAS No. 161 is
intended to improve financial standards for derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity's financial position, financial
performance, and cash flows.  Entities are required to provide
enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance and cash flows.  It is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged.  The Company does not expect the
adoption of SFAS No. 161 in 2009 will have a material effect on its consolidated
financial position, results of operations or cash flows.





In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS No. 162").  SFAS No.
162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles (the GAAP hierarchy).  SFAS No.
162 will become effective 60 days following the SEC's approval of the
Public Company Accounting Oversight Board amendments to
AU Section 411, "The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles."  The Company does not
expect the adoption of SFAS No. 162 to have a material effect on its
consolidated financial position, results of operations or cash
flows.





In May
2008, the FASB issued FSP Accounting Principles Board ("APB") 14-1 "Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement) " ("FSP APB 14-1").  FSP APB 14-1
requires the issuer of certain convertible debt instruments that may be settled
in cash (or other assets) on conversion to separately account for the liability
(debt) and equity (conversion option) components of the instrument in a manner
that reflects the issuer's non-convertible debt borrowing rate.  FSP
APB 14-1 is effective for fiscal years beginning after December 15,
2008 on a retroactive basis.  The Company does not expect the adoption
of FSP APB 14-1 to have a material effect on its consolidated financial
position, results of operations or cash flows.





In
December 2008, the FASB issued FSP SFAS 140-4 and FIN 46(R)-8,
Disclosures about Transfers of Financial Assets and Interests in Variable
Interest Entities. The FSP requires extensive additional disclosure by public
entities with continuing involvement in transfers of financial assets to
special-purpose entities and with variable interest entities (VIEs), including
sponsors that have a variable interest in a VIE. This FSP became effective for
the first reporting period ending after December 15, 2008 and did not have
any material impact on the Company's consolidated financial
statements.





Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not, or are not believed by
management to, have a material impact on the Company’s present or future
consolidated financial statements.





F-9




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
B - GOING CONCERN MATTERS





The
accompanying unaudited condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. As shown
in the accompanying unaudited condensed consolidated financial statements during
the six month period ended March 31, 2009, the Company incurred a loss of
$1,634,489. These factors among others may indicate that the Company will be
unable to continue as a going concern for a reasonable period of
time.





The
Company's existence is dependent upon management's ability to develop profitable
operations. At September 30, 2008, the Company was in default on its line of
credit agreement with its primary secured lender. On January 27, 2009, the
primary secured lender notified the Company it was in default of its obligations
under the line of credit agreement and commercial mortgage loan secured by first
deed of trust on real property to JCMD Properties, LLC. The notification is
declaring the debt obligations in default and is therefore entitling the lender
to exercise certain rights and remedies, including but not limited to,
increasing the interest rate to the default rate and demanding immediate
repayment in full of the principal, interest and interest swap outstanding
liability. Further, the lender notified the Company that the line of credit
maturing on February 1, 2009 will not be renewed and no further advances are
available on the line of credit. As of January 27, 2009, the interest rate on
the line of credit and commercial loan was increased to Prime plus 4.00% and
2.75%, respectively.





Management
is devoting substantially all of its efforts to developing new markets for its
products in the United States and Europe and reducing costs of operations and
there can be no assurance that the Company's efforts will be successful and no
assurance can be given that management's actions will result in profitable
operations. In order to improve the Company's liquidity, the Company's
management is actively pursuing additional equity financing through discussions
with investment bankers and private investors. There can be no assurance the
Company will be successful in its effort to secure additional equity
financing.





The
accompanying statements do not include any adjustments that might result should
the Company be unable to continue as a going concern.





NOTE
C - BANK LINE OF CREDIT





The
Company had a line of credit with a maximum borrowing limit of $800,000 with Key
Bank.  Borrowings under the agreement are collateralized by
substantially all the Company's assets. At September 30, 2008, the Company was
in default on its line of credit agreement.





On
January 27, 2009, the Key Bank notified the Company it was in default of its
obligations under the line of credit agreement and commercial mortgage loan
secured by second deed of trust on real property to JCMD Properties, LLC. The
notification is declaring the debt obligations in default and is therefore
entitling the lender to exercise certain rights and remedies, including but not limited
to, increasing the interest rate to the default rate and demanding immediate
repayment in full of the principal, interest and interest swap outstanding
liability.  Further, the lender notified the Company that the line of
credit maturing on February 1, 2009 will not be renewed and no further advances
are available on the line of credit. As of January 27, 2009, the interest rate
on the line of credit and commercial loan was increased to Prime plus 4.00% and
2.75%, respectively.





The
existing credit facility expired on February 1, 2009.  As of March 31,
2009, the line of credit remains in default with an outstanding principal
balance of $600,000.





In
addition, the Company has established a credit facility in Germany for a maximum
borrowing limit of 35,000 Euro plus 10,000 Euro overdraft protection ($49,331
and $14,094 USD, respectively) with open expiry date. Interest is at 9.5% per
year for the credit facility and 4.5% for overdraft protection. The Credit
facility is guaranteed by the President of the Company's subsidiary, Modelworxx
GmbH.





F-10




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
D - NOTES PAYABLE





As of
March 31, 2009 and September 30, 2008, notes payable consists of the
following:





March 31,
                  2009
                
                
                September 30,2008Guarantee
      for the JCMD Mortgage loan payable in monthly principal installments plus
      interest. Note secured by first deed of trust on real property and
      improvements located in Howell, MI. The JCMD General Partners personally
      guaranty the loan. The note is in default.
                
                $
                692,554
                
                
                $
                703,324Guarantee
      for the JCMD Mortgage loan payable in 240 monthly principal installments
      plus interest. The loan is secured by a second deed of trust on real
      property and improvements located in Howell, MI. The JCMD General Partners
      personally guaranty the loan The note is in default.
                
                
                562,728
                
                
                
                573,328Mortgage
      loan payable in monthly principal installments of $5,633 with a fixed
      interest rate of 5.98% per annum.  Note based on a 20 year
      amortization. Note is secured by first priority security interest in the
      business property of Colortek, Inc, the Company's wholly owned
      subsidiary
                
                
                657,545
                
                
                
                670,602Note
      payable in monthly payments of $1,857.54 per month includinginterest
      at 7.25% per annum, unsecured
                
                
                29,732
                
                
                
                32,6891,942,559
                
                
                
                1,979,943Less
      current portion
                
                
                1,312,149
                
                
                
                1,326,167Long
      term portion
                
                
                630,410
                
                
                $
                653,776




NOTE
D - NOTES PAYABLE (CONTINUED)





Payments
for notes payable, including the JCMD loans, for the next five years ending
March 31, are as follows:





Year
ended March 31,




2010
                        
                        $
                        1,312,1492011
                        
                        
                        29,8502012
                        
                        
                        32,2542013
                        
                        
                        34,4242014
      and
      thereafter
                        
                        
                        533,882Total
                        
                        $
                        1,942,559





F-11




MARKETING
WORLDWIDE CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009





NOTE
E CAPITAL LEASE OBLIGATIONS





Automobile
and equipment includes the following amounts for capitalized leases at March 31,
2009:





Automobile
      and equipment
                          
                          $
                          910,403Less:
      Accumulated depreciation and amortization
                          
                          
                          364,716Net
      book value:
                          
                          $
                          545,687





Future
minimum lease payments required under the capital leases are as
follows:





Total
      minimum lease payments
                              
                              $
                              58,385Less:  amount
      representing interest
                              
                              
                              3,133Subtotal
                              
                              
                              55,252Less
      current portion
                              
                              
                              25,142Long
      term portion
                              
                              $
                              30,110





NOTE
E - FAIR VALUE OF FINANCIAL INSTRUMENTS





The
Company adopted SFAS 157, as related to financial instruments. SFAS 157
establishes a three-level hierarchy for fair value measurements. The hierarchy
is based upon the transparency of inputs to the valuation of an asset or
liability as of the measurement date.





·
            Level
      1 - Valuation is based upon unadjusted quoted prices for identical assets
      or liabilities in active markets.





·
            Level
      2 - Valuation is based upon quoted prices for similar assets and
      liabilities in active markets, or other inputs that are observable for the
      asset or liability, either directly or indirectly, for substantially the
      full term of the financial
instruments.





·
            Level
      3 - Valuation is based upon other unobservable inputs that are significant
      to the fair value measurements.





The
classification of fair value measurements within the hierarchy is based upon the
lowest level of input that is significant to the measurement. The fair values of
these instruments were measured using valuations based upon quoted prices for
similar assets and liabilities in active markets (Level 2) and are valued by
reference to similar financial instruments, adjusted for credit risk and
restrictions and other terms specific to the contracts. The following table
provides a summary by level of the fair value of financial instruments that are
measured on a recurring basis:





Fair Value Measurements at March 31, 2009 Using:December 31,2008
                
                Quoted Pricesin Active
                  Markets forIdentical
                  Assets(Level 1)
                
                SignificantOther
                  ObservableInputs (Level 2)
                
                Significant
                  UnobservableInputs
                  (Level 3)Liabilities:Interest
      rate swap
                
                $
                109,637
                
                
                
                $
                109,637





F-12


MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
F - CAPITAL STOCK
 
 The
Company is authorized to issue 110,000,000 shares of which stock 100,000,000
shares of par value of $.001 each shall be common stock and of which 10,000,000
shares of par value of $.001 each shall be preferred stock. As of March 31,
2009, the Company has issued and outstanding 3,500,000 shares of Series A
preferred stock, 1,192,308 shares of Series B preferred stock and 16,845,091
shares of common stock.
 
 SERIES
A PREFERRED STOCK
 
 On April
23, 2007, the Company filed a Certificate of Designation creating a $0.001 par
value Series A Convertible Preferred stock for 3,500,000 shares.
 
 PAYMENT
OF DIVIDENDS. Commencing on the date of issuance of the Series A Preferred
Stock, the holders of record of shares of Series A Preferred Stock shall be
entitled to receive, out of any assets at the time legally available therefore
and as declared by the Board of Directors, dividends at the rate of nine percent
(9%) of the stated Liquidation Preference Amount (see below) per share PER
ANNUM, payable quarterly.
 
 RIGHT TO
CONVERT. At any time on or after the Issuance Date, the holder of any such
shares of Series A Preferred Stock may, at such holder's option, subject certain
limitations, elect to convert all or any portion of the shares of Series A
Preferred Stock held into a number of shares of Common Stock equal to the
quotient of (i) the Liquidation Preference Amount (see below) of the shares of
Series A Preferred Stock being converted plus any accrued but unpaid dividends
thereon DIVIDED BY (ii) the Conversion Price of $0.50 per share, subject to
certain adjustments.
 
 MANDATORY
CONVERSION. Subject to certain restrictions and limitations, five years after
the issuance date, the Series A Preferred Stock will automatically and without
any action on the part of the holder thereof, convert into shares of Common
Stock equal to the quotient of (i) the Liquidation Preference Amount of the
number of shares of Series A Preferred Stock being converted on the Mandatory
Conversion Date DIVIDED BY (ii) the Conversion Price in effect on the Mandatory
Conversion Date.
 
 LIQUIDATION
RIGHTS. The Series A Preferred Stock shall, with respect to distributions of
assets and rights upon the occurrence of a Liquidation rank (i) senior to all
classes of common stock of the Company and (ii) senior to each other class of
Capital Stock of the Company hereafter created with does not expressly rank pari
passu or senior to the Series A Preferred Stock. Holders of the Series A
Preferred Stock is entitled, in the event of liquidation or winding up of the
Company's affairs, a liquidation payment of $1.00 per share plus any accrued and
unpaid dividends before any distribution to any common or other junior classes
of stock
 
 VOTING
RIGHTS. The holders of Series A Preferred Stock shall have no voting rights with
the exception relating to increasing the number of outstanding shares of Series
A Preferred or modifying the rights of the Series A Preferred
Stock.
 
 REGISTRATION
RIGHTS. The Company is required to file a registration statement with the SEC to
affect the registration of the shares of its common stock underlying the Series
A Preferred Stock and the warrants (see below) within 30 days. The Company also
agreed to use its reasonable best efforts to cause the registration statement to
be declared effective no later than 150 days after its filing. If the
Registration Statement is not filed and declared effective as described above,
the Company will be required to pay liquidated damages to the holders of the
Series A Preferred Stock, in an amount equal to 2% of the initial investment.
The registration statement for all the shares of its common stock underlying the
Series A Preferred Stock and all attached warrants was declared effective by the
SEC on July 20, 2007.
 
 On April
23, 2007 the Company issued 3,500,000 shares of Series A Preferred Stock for
gross proceeds of $3,500,000 resulting in net proceeds of
$3,222,450.
 
 As
additional consideration for the purchase of the Series A Preferred Stock, the
Company granted to the holders warrants entitling it to purchase 11,000,000
common shares of the Company's common stock at the price of $0.70 per share,
6,000,000 at $0.85 per share and 6,000,000 at $1.20 per share. The underlying A,
B & C warrants lapse if unexercised by April 23, 2012, while the J and D, E
&F warrants lapse if unexercised by June 28, 2008. All warrants are subject
to the registration rights agreement described above.
  F-13
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
F - CAPITAL STOCK (continued)
 
 SERIES
A PREFERRED STOCK (continued)
 
 In
accordance with EMERGING ISSUES TASK FORCE ISSUE 98-5, ACCOUNTING FOR
CONVERTIBLE SECURITIES WITH A BENEFICIAL CONVERSION FEATURES OR CONTINGENTLY
ADJUSTABLE CONVERSION RATIOS ("EITF 98-5"), the Company recognized an imbedded
beneficial conversion feature present in the Convertible Series A Preferred
Stock. The Company allocated a portion of the proceeds equal to the fair value
of that feature to additional paid-in capital. The Company recognized and
measured an aggregate of $3,500,000 of the proceeds, which is equal to the
intrinsic value of the imbedded beneficial conversion feature, to additional
paid-in capital and a charge as a preferred stock dividend. The fair value of
the warrants was determined using the Black-Scholes Option Pricing Model with
the following assumptions: Dividend yield: $-0-; Volatility: 146.64%, risk free
rate: 4.55%.
 
 The
Series A Preferred Stock includes certain redemption features allowing the
holders the right, at the holder’s option, to require the Company to redeem all
or a portion of the holder’s shares of Series A Preferred Stock upon the
occurrence of a Major Transaction or Triggering Event.  Major
Transaction is defined as a consolidation or merger; sale or transfer of more
than 50% of the Company assets or transfer of more than 50% of the Company’s
common stock.  A Triggering Event is defined as a lapse in the
effectiveness of the related registration statement; suspension from listing;
failure to honor for conversion or going private.
 
 SFAS 150
requires mandatorily redeemable financial instruments be classified outside of
equity unless the redemption is required only upon liquidation or termination of
the reporting entity.  Although SFAS 150 also states that if a
financial instrument embodies a conditional obligation to redeem the instrument
by transferring assets upon an event not certain to occur becomes mandatorily
redeemable –and therefore becomes a liability-if that event occurs..., per Topic
D-98 requires securities with redemption features that are not solely within the
control of the issuer to be classified outside of permanent equity.
 
 SERIES
B PREFERRED STOCK
 
 On July
10, 2008, the Company filed a Certificate of Designation creating a $0.001 par
value Series B Convertible Preferred stock for 1,200,000 shares.
 
 RANK. The
Series B Preferred Stock shall rank pari passu as to liquidation rights and
other matters to the Company's common stock, par value $0.001 per share (the
"COMMON STOCK"). The Series B Preferred Stock shall be subordinate to and rank
junior to all indebtedness of the Company now or hereafter
outstanding.
 
 PAYMENT
OF DIVIDENDS. There are no dividends payable on the Series B Preferred
Stock.
 
 VOTING
RIGHTS The holders of Series B Preferred Stock shall have no voting rights with
the exception of the approval relating to increasing the number of outstanding
shares of Series A Preferred or modifying the rights of the Series A Preferred
Stock.
 
 LIQUIDATION
AMOUNT. In the event of the liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, the holders of shares
of Series B Preferred Stock then outstanding shall be entitled to receive, out
of the assets of the Company available for Distribution to its stockholders, an
amount per share of Series B Preferred Stock equal to the amount distributable
with respect to that number of shares of the Common Stock into which one share
of the Series B Preferred Stock is then convertible, plus any accrued and unpaid
dividends.
 
 CONVERSION.
At any time on or after the date of the initial issuance of the Series B
Preferred Stock, the holder of any such shares of Series B Preferred Stock may,
at such holder's option, elect to convert all or any portion of the shares of
Series B Preferred Stock held into a number of fully paid and non-assessable
shares of Common Stock for each such share of Series B Preferred Stock equal to
the quotient of: (a) the Original Issue Price, plus any accrued and unpaid
dividends thereon, divided by (b) the Conversion Price in effect as of the date
of the delivery by such holder of its notice of election to convert. The initial
Conversion Price is $16.90, subject to change for events such as stock
splits.
 
 On July
11, 2008, the Company entered an Exchange Agreement with holders of Series F
Common Stock Purchase Warrants and Series J Common Stock Purchase Warrants.
Under the Exchange Agreement, the Company issued 750,000 shares of Series B
Convertible Preferred Stock for the cancellation of 3,500,000 Series A Common
Stock Purchase Warrants, 3,500,000 Series B Common Stock Purchase Warrants,
3,500,000 Series C Common Stock Purchase Warrants, 2,500,000 Series D Common
Stock Purchase Warrants, and 2,500,000 Series E Common Stock Purchase Warrants.
In addition, holders exercised 1,000,000 Series J Warrants and 2,500,000 Series
F Warrants for $525,000 in exchange for 442,308 shares of Series B Convertible
Preferred Stock.
  F-14
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
F - CAPITAL STOCK (continued)
 
 SERIES
B PREFERRED STOCK (continued)
 
 As of
March 31, 2009, the Company has 1,192,308 shares of Series B Preferred Stock
outstanding.
 
 COMMON
STOCK
 
 On
October 20, 2008, the Company settled with Carter Securities for 300,000 shares
of the Company's common stock and the surrender of 490,000 warrants held by
Carter to purchase the Company’s common stock at $0.65 per share held by Carter
Securities, LLC.
 
 NOTE
G - STOCK OPTIONS AND WARRANTS
 
 EMPLOYEE
STOCK OPTIONS
 
 The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company's common stock issued to employees of the
Company as of March 31, 2009:
 
 Options Outstanding
                          
                          
                          Options ExercisableWeighted Average
                            Remaining
                          
                          
                          Weighted

                              Average
                          
                          
                          Weighted
                          
                          
                          AverageExercise
                          
                          Number
                          
                          
                          Contractual
                          
                          
                          Exercise
                          
                          
                          Number
                          
                          
                          ExercisePrice
                          
                          Outstanding
                          
                          
                          Life
      (Years)
                          
                          
                          Price
                          
                          
                          Exercisable
                          
                          
                          Price$
                          0.26
                          
                          
                          490,000
                          
                          
                          
                          4.26
                          
                          
                          $
                          0.26
                          
                          
                          
                          -
                          
                          
                          $
                          0.26$
                          0.45
                          
                          
                          170,000
                          
                          
                          
                          7.15
                          
                          
                          $
                          0.45
                          
                          
                          
                          170,000
                          
                          
                          $
                          0.45660,000
                          
                          
                          
                          5.25
                          
                          
                          $
                          0.31
                          
                          
                          
                          170,000
                          
                          
                          $
                          0.45
  Transactions
involving options issued to employees are summarized as follows:
 
 Weighted Average
                      Number of Shares
                    
                    
                    Price per
                      ShareOutstanding
      at October 1, 2007
                    
                    
                    170,000
                    
                    
                    $
                    0.45Granted
                    
                    
                    490,000
                    
                    
                    $
                    0.26Exercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expired
                    
                    
                    -
                    
                    
                    
                    -Outstanding,
      September  30, 2008
                    
                    
                    660,000
                    
                    
                    
                    0.31Granted
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expired
                    
                    
                    -
                    
                    
                    
                    -Outstanding,
      March 31, 2009
                    
                    
                    660,000
                    
                    
                    $
                    0.31
 
 SFAS No.
123, "Accounting for Stock-Based Compensation," required the disclosure of the
estimated fair value of employee option grants and their impact on net income
using option pricing models that are designed to estimate the value of options
that, unlike employee stock options, can be traded at any time and are
transferable. In addition to restrictions on trading, employee stock options may
include other restrictions such as vesting periods. Further, such models require
the input of highly subjective assumptions, including the expected volatility of
the stock price.
 
 In May
2007, the Company granted 170,000 employee stock options vesting over the next
three years. The options grant the employee the right to purchase the Company's
common stock over the next 8 to 10 years at an exercise price of $0.45. The
options were valued using the Black-Scholes Option Pricing model with the
following assumptions: dividend yield: -0-%; volatility: 37.74%; risk free
interest rate: 4.50%. The determined fair value of the options of $41,440 will
be recognized as a period expense ratably with vesting rights.
  F-15
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
G - STOCK OPTIONS AND WARRANTS (CONTINUED)
  EMPLOYEE
STOCK OPTIONS (CONTINUED)
 
 In May
2008 the Company granted 400,000 employee stock options vesting over one year.
The options grant the employee the right to purchase the Company's common stock
over the next 4 years at an exercise price of $0.26. The options were valued
using the Black-Scholes Option Pricing model with the following assumptions:
dividend yield: -0-%; volatility: 221.26%; risk free interest rate: 3.85%. The
determined fair value of the options of $101,213 will be recognized as a period
expense ratably with vesting rights.
 
 In May
2008 the Company granted 90,000 employee stock options vesting over next three
years. The options grant the employee the right to purchase the Company's common
stock over the next 10 years at an exercise price of $0.26. The options were
valued using the Black-Scholes Option Pricing model with the following
assumptions: dividend yield: -0-%; volatility: 221.26%; risk free interest rate:
2.73%. The determined fair value of the options of $23,390 will be recognized as
a period expense ratably with vesting rights.
 
 The
Company recorded as current period expense the vested portions of the above
employee options of $92,583 for the six months ended March 31, 2009. As of March
31, 2009, total unrecognized stock-based compensation expense related to
non-vested stock options was $32,019.
 
 NON
EMPLOYEE OPTIONS
 
 The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company's common stock issued to non- employees of
the Company as of March 31, 2009:
 
 Options Outstanding
                          
                          
                          Options ExercisableWeighted Average
                            Remaining
                          
                          
                          Weighted
                            Average
                          
                          
                          WeightedNumber
                          
                          
                          Contractual
                          
                          
                          Exercise
                          
                          
                          Number
                          
                          
                          AverageExercise Price
                          
                          Outstanding
                          
                          
                          Life (Years)
                          
                          
                          Price
                          
                          
                          Exercisable
                          
                          
                          Exercise Price$
                          0.10
                          
                          
                          1,000,000
                          
                          
                          
                          3.50
                          
                          
                          $
                          0.10
                          
                          
                          
                          1,000,000
                          
                          
                          $
                          0.10
 
 Transactions
involving options issued to non-employees are summarized as
follows:
 
 Weighted Average
                      Number of Shares
                    
                    
                    Price per
                      ShareOutstanding
      at October 1, 2007
                    
                    
                    1,395,000
                    
                    
                    $
                    0.39Granted
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expired
                    
                    
                    -
                    
                    
                    
                    -Outstanding,
      September  30, 2008
                    
                    
                    1,395,000
                    
                    
                    
                    0.39GrantedExercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expired
                    
                    
                    (395,000
                    )
                    
                    
                    1.13Outstanding,
      March 31, 2009
                    
                    
                    1,000,000
                    
                    
                    $
                    0.10
 
 As
described in Note A above, the Company issued 1,000,000 options to purchase
common stock at $0.10 per share for five years to acquire MW Global Limited. The
options were valued using the Black-Scholes Option Pricing Model with the
following assumptions: dividend yield: -0-%; volatility: 282.85%; risk-free
rate: 4.23%
 
 Aggregate
intrinsic value of options outstanding and exercisable at March 31, 2009 and
2008 was $204,700 and $190,000, respectively. Aggregate intrinsic value
represents the difference between the Company's closing price on the last
trading day of the fiscal period, which was $0.29 as of March 31,, 2009, and the
exercise price multiplied by the number of options outstanding.
  F-16
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
G - STOCK OPTIONS AND WARRANTS (CONTINUED)
 
 WARRANTS
 
 The
following table summarizes the changes in warrants outstanding and the related
prices for the shares of the Company's common stock issued to non-employees of
the Company as of March 31, 2009:
 
 Warrants Outstanding
                          
                          
                          Warrants ExercisableWeighted Average
                            Remaining
                          
                          
                          Weighted
                            Average
                          
                          
                          WeightedNumber
                          
                          
                          Contractual
                          
                          
                          Exercise
                          
                          
                          Number
                          
                          
                          AverageExercise Price
                          
                          Outstanding
                          
                          
                          Life (Years)
                          
                          
                          Price
                          
                          
                          Exercisable
                          
                          
                          Exercise Price$
                          0.30
                          
                          
                          100,000
                          
                          
                          
                          2.44
                          
                          
                          $
                          0.30
                          
                          
                          
                          100,000
                          
                          
                          $
                          0.30
  Transactions
involving warrants are summarized as follows:
 
 Weighted Average
                      Number of Shares
                    
                    
                    Price per
                      ShareOutstanding
      at October 1, 2007
                    
                    
                    20,490,000
                    
                    
                    $
                    0.69Granted
                    
                    
                    100,000
                    
                    
                    
                    0.30Exercised
                    
                    
                    (3,500,000
                    )
                    
                    
                    -Canceled
      or expired
                    
                    
                    (15,500,000
                    )
                    
                    
                    -Outstanding,
      September  30, 2008
                    
                    
                    1,590,000
                    
                    
                    
                    0.54Granted
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expired
                    
                    
                    (1,490,000
                    )
                    
                    
                    0.65Outstanding,
      March 31, 2009
                    
                    
                    100,000
                    
                    
                    $
                    0.49
 
 During
the six months ended March 31, 2009, the Company cancelled 490,000 warrants in
connection with a settlement of an outstanding debt obligation.
 
 NOTE
H - CONSOLIDATION OF VARIABLE INTEREST ENTITIES
 
 On June
6, 2005 and August 8, 2005, JCMD Properties LLC, an entity controlled by the
Company's Chief Executive and Chief Operating officers respectively ("JCMD"),
entered into a Secured Loan Agreement with a financial institution, in
connection with the financing of real property and improvements ("property").
This agreement is guaranteed by the Company.
 
 The
property is leased to the Company under a long term operating lease beginning on
January 1, 2005. Under the loan agreements, JCMD is obligated to make periodic
payments of principal repayments and interest. The Company has no equity
interest in JCMD or the property.
 
 Based on
the terms of the lending agreement with the above entity, the Company determined
that JCMD was a variable interest entity ("VIE") and the Company was the primary
based on the terms of the lending agreement with the above entity, the Company
determined that JCMD was a variable interest entity ("VIE") and the Company was
the primary beneficiary under FIN No. 46 since JCMD does not have sufficient
equity at risk for the entity to finance its activities.
 
 FIN No.
46 requires that an enterprise consolidate a VIE if that enterprise has a
variable interest that will absorb a majority of the entity's expected losses if
they occur. Accordingly, the Company adopted FIN No. 46 and consolidated JCMD as
a VIE, regardless of the Company not having an equity interest in
JCMD.
 
 Included
in the Company's consolidated balance sheets at March 31, 2009 and September 30,
2008 are the following net assets of JCMD:
  F-17
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
H - CONSOLIDATION OF VARIABLE INTEREST ENTITIES (continued)
 
 March 31,
                      2009
                    
                    
                    September 30,
                      2008ASSETS
      (JCMD)Cash
      and cash equivalents
                    
                    $
                    41,772
                    
                    
                    $
                    117,726Accounts
      receivable, prepaid expenses and other current assets
                    
                    
                    -
                    
                    
                    
                    19,400Total
      current assets
                    
                    
                    41,772
                    
                    
                    
                    137,126Property,
      plant and equipment, net
                    
                    
                    1,277,224
                    
                    
                    
                    1,273,824Total
      assets
                    
                    
                    1,318,996
                    
                    
                    
                    1,410,950LIABILITIES:Current
      portion of long term debt
                    
                    
                    1,255,282
                    
                    
                    
                    43,570Accounts
      payable and accrued liabilities
                    
                    
                    109,637
                    
                    
                    
                    -Total
      current liabilities
                    
                    
                    1,364,919
                    
                    
                    
                    43,570Long
      term debt
                    
                    
                    -
                    
                    
                    
                    1,233,082Total
      liabilities
                    
                    
                    1,364,919
                    
                    
                    
                    1,276,652Net
      assets (liabilities)
                    
                    $
                    (45,923
                    )
                    
                    $
                    134,298
 
 Consolidated
results of operations for the six months ended March 31, 2009 and 2008 include
the following:
 
 March 31,
                        2009
                      
                      
                      March 31,
                        2008Revenues
                      
                      $
                      83,322
                      
                      
                      $
                      91,448Cost
      and expenses – real estate:Operating
      expenses
                      
                      
                      17,975
                      
                      
                      
                      6,928Depreciation
                      
                      
                      16,000
                      
                      
                      
                      16,000Interest,
      net
                      
                      
                      139,567
                      
                      
                      
                      37,718Total
      costs and expenses
                      
                      
                      173,542
                      
                      
                      
                      60,646Operating
      income (loss) -Real estate
                      
                      $
                      (90,220
                      )
                      
                      $
                      30,802
 
 During
the six months ended March 31, 2009 and 2008, JCMC Properties LLC issued cash
distributions to its members totaling $90,000 and $31,893,
respectively.
 
 NOTE
I - SEGMENT INFORMATION
 
 The
Company has one reportable business segment which is operated in two geographic
locations.
 
 Those
geographic segments are:
 
 * United
States (including Canada) * Germany
  F-18
  MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
I - SEGMENT INFORMATION (continued)
 
 Information
for the six months ended March 31, 2009 and 2008 concerning principal geographic
areas is presented below according to the area where the activity is taking
place.
 
 March 31,
                        2009
                      
                      
                      March 31,
                        2008Revenues:United
      States
                      
                      $
                      1,706,681
                      
                      
                      $
                      3,965,782Germany
                      
                      
                      315,857
                      
                      
                      
                      1,060,621Total
      revenue
                      
                      
                      2,022,538
                      
                      
                      
                      5,026,403Gross
      ProfitUnited
      States
                      
                      
                      662,844
                      
                      
                      
                      1,387,493Germany
                      
                      
                      (125,714
                      )
                      
                      
                      328,423Total
      gross profit
                      
                      
                      537,130
                      
                      
                      
                      1,715,916Operating
      loss:United
      States
                      
                      
                      (1,081,436
                      )
                      
                      
                      (222,369
                      )Germany
                      
                      
                      (442,556
                      )
                      
                      
                      (104,783
                      )Total
      operating (loss)
                      
                      $
                      (1,523,992
                      )
                      
                      $
                      (327,152
                      )
 
 March 31,
                                  2009
                                
                                
                                September 30,
                                  2008AssetsUnited
      States
                                
                                $
                                5,442,504
                                
                                
                                $
                                8,433,579Germany
                                
                                
                                333,007
                                
                                
                                
                                890,891Total
      asset
                                
                                
                                5,775,511
                                
                                
                                
                                9,324,470Six
      months ended March 31, 2009 and 2008:
                                
                                March
      31,
                                  2009
                                
                                
                                March
      31,
                                  2008Capital
      ExpendituresUnited
      States
                                
                                
                                29,328
                                
                                
                                
                                458,437Germany
                                
                                
                                20,666
                                
                                
                                
                                40,129Total
      capital expenditures
                                
                                $
                                49,994
                                
                                
                                $
                                498,566
 
 NOTE
J - RELATED PARTY TRANSACTIONS
 
 The
members of JDMD Properties, LLC made cash distributions of $90,000 and $31,893
during the six months ended March 31, 2009 and 2008,
respectively.
  F-19
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
K – RESTATEMENT
 
 The
effect of these adjustments is a reclassification from interest expense to
preferred stock dividend on the face of the Statements of
Operations.  There was no effect on cash flows from operating,
investing or financing for either period although presented for line items
changes within each category.
 
 The
following tables summarize the effects of these adjustments on the Company’s
unaudited condensed consolidated statements of operations for the three and six
months ended March 31, 2008 and the condensed consolidated statements of cash
flows for the six months ended March 31, 2008.
 
 Condensed
Consolidated Statement of Operations
 For the
Three Months Ended March 31, 2008
 
 As PreviouslyReported
                  
                  
                  Adjustment
                  
                  
                  Reference
                  
                  
                  As RestatedRevenue
                  
                  $
                  2,293,480
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  2,293,480Cost
      of sales
                  
                  $
                  1,428,938
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  1,428,938Gross
      profit
                  
                  $
                  864,542
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  864,542Operating
      expenses
                  
                  $
                  936,782
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  936,782Loss
      from operations
                  
                  $
                  (72,240
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (72,240
                  )Other
      income (expense)Financing
      costs
                  
                  $
                  (121,767
                  )
                  
                  $
                  78,750
                  
                  
                  
                  a
                  
                  
                  $
                  (43,017
                  )Other
      income (expense)
                  
                  $
                  (10,752
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (10,752
                  )Net
      loss before income taxes
                  
                  $
                  (204,759
                  )
                  
                  $
                  78,750
                  
                  
                  
                  
                  
                  
                  $
                  (126,009
                  )Provision
      for income taxes
                  
                  $
                  (114
                  )
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (114
                  )Net
      loss before minority interest
                  
                  $
                  (204,645
                  )
                  
                  $
                  78,750
                  
                  
                  
                  
                  
                  
                  $
                  (125,895
                  )Loss
      from minority interest
                  
                  $
                  (21,644
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (21,644
                  )Net
      loss
                  
                  $
                  (226,289
                  )
                  
                  $
                  78,750
                  
                  
                  
                  
                  
                  
                  $
                  (147,539
                  )Preferred
      dividend
                  
                  $
                  -
                  
                  
                  $
                  (78,750
                  )
                  
                  
                  a
                  
                  
                  $
                  (78,750
                  )NET
      LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
                  
                  $
                  (226,289
                  )
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (226,289
                  )
  F-20
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
K – RESTATEMENT (continued)
 
 Condensed
Consolidated Statement of Operations
 For the
Six Months Ended March 31, 2008
 
 As PreviouslyReported
                  
                  
                  Adjustment
                  
                  
                  Reference
                  
                  
                  As RestatedRevenue
                  
                  $
                  5,026,403
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  5,026,403Cost
      of sales
                  
                  $
                  3,310,487
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  3,310,487Gross
      profit
                  
                  $
                  1,715,916
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  1,715,916Operating
      expenses
                  
                  $
                  2,043,068
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  2,043,068Loss
      from operations
                  
                  $
                  (327,152
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (327,152
                  )Other
      income (expense)Financing
      costs
                  
                  $
                  (242,478
                  )
                  
                  $
                  157,500
                  
                  
                  
                  a
                  
                  
                  $
                  (84,978
                  )Other
      income (expense)
                  
                  $
                  (3,317
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (3,317
                  )Net
      loss before income taxes
                  
                  $
                  (572,947
                  )
                  
                  $
                  157,500
                  
                  
                  
                  
                  
                  
                  $
                  (415,447
                  )Provision
      for income taxes
                  
                  $
                  (4,502
                  )
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (4,502
                  )Net
      loss before minority interest
                  
                  $
                  (568,445
                  )
                  
                  $
                  157,500
                  
                  
                  
                  
                  
                  
                  $
                  (410,945
                  )Loss
      from minority interest
                  
                  $
                  (30,802
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (30,802
                  )Net
      loss
                  
                  $
                  (599,247
                  )
                  
                  $
                  157,500
                  
                  
                  
                  
                  
                  
                  $
                  (441,747
                  )Preferred
      dividend
                  
                  $
                  -
                  
                  
                  $
                  (157,500
                  )
                  
                  
                  a
                  
                  
                  $
                  (157,500
                  )NET
      LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
                  
                  $
                  (599,247
                  )
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (599,247
                  )
  F-21
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
K – RESTATEMENT (continued)
 
 Condensed
Consolidated Statement of Cash Flows
 For the
Six Months Ended March 31, 2008
 
 As PreviouslyReported
                  
                  
                  Adjustment
                  
                  
                  Reference
                  
                  
                  As RestatedCash
      flows from operating activities:Net
      loss for the period
                  
                  $
                  (599,247
                  )
                  
                  $
                  157,500
                  
                  
                  
                  a
                  
                  
                  $
                  (441,747
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                  
                  $
                  207,912
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  207,912Amortization
      of deferred financing costs
                  
                  $
                  66,691
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  66,691Interest
      in non controlling entity
                  
                  $
                  30,802
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  30,802(Increase)
      decrease in:Accounts
      receivable
                  
                  $
                  (883,526
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (883,526
                  )Inventory
                  
                  $
                  (406,427
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (406,427
                  )Other
      assets
                  
                  $
                  (23,785
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (23,785
                  )Increase
      (decrease) in:Accounts
      payable and accrued liabilities
                  
                  $
                  112,180
                  
                  
                  $
                  (157,500
                  )
                  
                  
                  a
                  
                  
                  $
                  (45,320
                  )Net
      cash used in operating activities
                  
                  
                  (1,495,400
                  )
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  (1,495,400
                  )Cash
      flows from investing activities:Purchase
      of property, plant and equipment
                  
                  $
                  (498,566
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (498,566
                  )Net
      cash used in investing activities
                  
                  $
                  (498,566
                  )
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (498,566
                  )Cash
      flows from financing activities:Distribution
      by non-controlling entity
                  
                  $
                  (31,893
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (31,893
                  )Proceeds
      from common stock subscription
                  
                  $
                  2,000,000
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  2,000,000Proceeds
      from of lines of credit
                  
                  $
                  (600,000
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (600,000
                  )Repayments
      of notes payable and capital leases
                  
                  $
                  (75,678
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (75,678
                  )Net
      cash provided by financing activities
                  
                  $
                  1,292,429
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  1,292,429Effect
      of currency rate change on cash:
                  
                  $
                  31,134
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  31,134Net
      decrease in cash
                  
                  $
                  (670,403
                  )
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  (670,403
                  )Cash
      at beginning of period
                  
                  $
                  2,270,313
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $
                  2,270,313$
                  
                  
                  
                  
                  
                  
                  
                  $
                  
                  
                  
                  $Cash
      at end of period
                  
                  $
                  1,599,910
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  1,599,910
  F-22
 
 MARKETING
WORLDWIDE CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 
 NOTE
K – RESTATEMENT (continued)
 
 (a)
reclassification of preferred stock dividend from financing costs to preferred
stock dividend.
  ITEM
      2.
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF
      OPERATIONS
 
 THIS
REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS.
FORWARD-LOOKINGSTATEMENTS IN THIS REPORT ARE INDICATED BY WORDS SUCH AS
"ANTICIPATES," "EXPECTS," "BELIEVES," "INTENDS," "PLANS," "ESTIMATES,"
"PROJECTS" AND SIMILAR EXPRESSIONS. THESE STATEMENTS REPRESENT OUR EXPECTATIONS
BASED ON CURRENT INFORMATION AND ASSUMPTIONS. FORWARD-LOOKING STATEMENTS ARE
INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE WHICH ARE ANTICIPATED OR PROJECTED AS A RESULT OF CERTAIN
RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO A NUMBER OF FACTORS, SUCH
AS ECONOMIC AND MARKET CONDITIONS; THE PERFORMANCE OF THE AUTOMOTIVE AFTERMARKET
SECTOR; CHANGES IN BUSINESS RELATIONSHIPS WITH OUR MAJOR CUSTOMERS AND IN THE
TIMING, SIZE AND CONTINUATION OF OUR CUSTOMERS' PROGRAMS; THE ABILITY OF OUR
CUSTOMERS TO ACHIEVE THEIR PROJECTED SALES; COMPETITIVE PRODUCT AND PRICING
PRESSURES; INCREASES IN PRODUCTION OR MATERIAL COSTS THAT CANNOT BE RECOUPED IN
PRODUCT PRICING; SUCCESSFUL INTEGRATION OF ACQUIRED BUSINESSES; PRODUCT
LIABILITY, AS WELL AS OTHER RISKS AND UNCERTAINTIES, SUCH AS THOSE
DESCRIBED
 
 UNDER
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND THOSE DETAILED
HEREIN AND FROM TIME TO TIME IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. THOSE FORWARD-LOOKING STATEMENTS ARE MADE ONLY AS OF THE DATE
HEREOF, AND WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE THE FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
INCLUDED ELSEWHERE IN THIS FORM 10-Q
 
 BUSINESS
OVERVIEW
 
 Marketing
Worldwide Corporation (the "Company", "Registrant" or "MWW"),
was  incorporated under the laws of the State of Delaware in July
2003. The Company is engaged, through its wholly-owned subsidiary, Marketing
Worldwide LLC ("MWWLLC").
 
 MWW is a
full service design, engineering and manufacturing firm of original equipment
manufacturer ("OEM") components in the automotive accessory market. MWW provides
a number of large foreign and domestic automobile manufacturers' and
independently owned vehicle processing and distribution centers in the US,
Canada and Europe with MWW's components directly at their respective locations.
At the instruction of MWW, the vehicle processing centers' technical teams
install MWW's accessory products on new automobiles, as soon as these new
vehicles arrive from foreign or domestic automobile manufacturers at their
centers. From the vehicle processing or distribution centers the accessorized
automobiles are then delivered into the domestic car dealer distribution systems
throughout the Continental US, Canada and Europe. MWW's relationship is solely
with the vehicle processing and/or distribution centers, which also pay for
MWW's products.
  Page
2
 
 Since its
inception, the company's  businsess plan has planned for  an
ongoing expansion of MWW's infrastructure and staff and warranted the
diversification and expansion of its activities into the design and engineering
of its products in the US and Europe. The company has also continued to increase
vertical integration in manufacturing, in order to address newly arising market
opportunities. Drawing from the experience of its principals, consultants and
management team, strategically utilizing longstanding relationships in the
industry, the company has steadily expanded its design services, product range,
client and employees/contractor base and is currently aggressively pursuing the
expansion of its client roster, in addition to its existing major clients such
as South East Toyota, Gulf States Toyota and Toyota Canada. In its effort for
more vertical integration, the Company has acquired Colortek, a "Class A"
painting facility in Baroda, Michigan, Modelworxx GmbH in Munich Germany and has
commenced operation with a new "Class A" painting facility in Elkhart,
Indiana.
 
 The
Company has established initial relationships with several new major foreign and
domestic automobile manufacturers, has recently begun delivering accessory
programs to KIA Motors America and has received additional Request for Quotes
from Toyota Canada, BMW, Ford Motor, VW, KIA Motors, MOBIS (KIA and Hyundai) and
Nissan. MWW has been delivering product directly to the Toyota Motor
Manufacturing Corporation assembly plant in Canada for nearly twenty six (26)
months and has been awarded new programs to be delivered to Toyota Canada
International. Through our wholly owned subsidiary Modelworxx in Germany we have
begun to manufacture and deliver products to Toyota Europe and are currently in
the process to expand our design and logistics services in Germany. We have
expanded the number of products designed in Germany for sale to other European
automobile manufacturers and our large customers in the US. Through Modelworxx,
we will also provide our US produced products for sale to European customers..
We are in various stages of seeking to provide our accessory programs to other
major foreign and domestic automobile manufacturers such as Ford, GM, Nissan,
Subaru and Hyundai in the US and several large manufacturers and distributors
throughout Europe.
 
 SEASONALITY.
Historically, our operating results have fluctuated by quarter to quarter, with
the greatest sales occurring in the quarters of the fiscal year with the largest
number of automobile manufacturers new model releases. Revenues are generally
being recognized at the time of product shipment. It is in these quarters of new
model releases that demand for our products is typically the
highest.  Our business is currently negatively impacted by
the  general downturn in the automotive industry. As we expand our
business globally, we expect to better able to mitigate these
impacts.
 
 The
limited seasonality of our business offers significant operational challenges in
our manufacturing and distribution functions, based on a partial dependency on
manufacturing abroad. To limit these challenges and to provide a rapid
turnaround time of customer orders, we traditionally keep somewhat higher
inventory levels. New strategies to decrease inventory and improve inventory
turns over rates are currently being implemented. Utilizing the synergies
between our newly acquired companies and the utilization of the newly created
manufacturing capacities here in the US that are now controlled by us, we are
expecting to produce higher levels of efficiency over time.
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 OPERATING
ACTIVITIES. During the six months ended March 31, 2009, we used $747,588 of cash
flow in operations primarily from our net loss of $1,634,489; offset by non cash
depreciation and amortization charges of $294,889, fair value of options granted
of $92,583, non controlling interest of $ 44,298 and net changes in our
operating assets and liabilities of $543,727.
  Page
3
 
 INVESTING
ACTIVITIES. During the six months ended March 31, 2009, we used $49,994 in cash
flows in investing activities by acquiring additional equipment for our
operations for the quarter ending March 31, 2009.
 
 FINANCING
ACTIVITIES. During the six ended March 31, 2009, we received $202,050 from
borrowing on our line of credit, net with payments towards our notes payable and
capital leases and distribution from the non controlling entity.
 
 MWW
currently had a $800,000 line of credit, which expired on February 1, 2009 and
was used to fund seasonal working capital requirements and other financing
needs. MWW pledged all of its inventory, equipment, accounts, and chattel paper,
instruments, and letters of credit, documents, deposit accounts, investment
property, money, rights to payment and general intangibles to secure the Loan.
The Company was required to maintain an operating cash flow to fixed charge
ratio of 1.5 to 1 at year end. At September 30, 2008, the Company was in default
on its line of credit agreement with its primary secured lender. On January 27,
2009, the primary secured lender notified the Company it was in default of its
obligations under the line of credit agreement and commercial mortgage loan
secured by second deed of trust on real property to JCMD Properties, LLC. The
notification is declaring the debt obligations in default and is therefore
entitling the lender to exercise certain rights and remedies, including but not
limited to, increasing the interest rate to the default rate and demanding
immediate repayment in full of the principal, interest and interest swap
outstanding liability. Further, the lender notified the Company that the line of
credit maturing on February 1, 2009 will not be renewed and no further advances
are available on the line of credit. As of January 27, 2009, the interest rate
on the line of credit and commercial loan was increased to Prime plus 4.00% and
2.75%, respectively. The Company is currently negotiating to lower the interest
rates for both loans.
 
 Our
working capital requirements have increased because of our recent acquisitions
and declining sales, the opening of our new facility AutoFX in Elkhart, newly
awarded programs and arising program development opportunities to secure
additional large customers..
 
 The
global credit market crisis has had a dramatic effect on our industry. In the
three months ended March31, 2009, the turmoil in the mortgage and overall credit
markets, continued reductions in U.S. housing values, the high likelihood that
the United States and Western Europe have entered into a recession and the
slowdown of economic growth in the rest of the world, created a substantially
more difficult business environment. Vehicle sales in North America contracted
severely and the pace of vehicle sales in the rest of the world slowed. Our
liquidity position, as well as our operating performance, were negatively
affected by these economic and industry conditions and by other financial
business factors, many of which are beyond our control. We do not believe it is
likely that these adverse economic conditions, and their effect on the
automotive industry, will improve significantly in the near term,
notwithstanding the unprecedented intervention by the U.S. and other governments
in the global banking and financial systems.
 
 As of
March 31, 2009, we had a working capital deficit
of $1,301,941.
 
 The
independent auditors report on our September 30, 2008 financial statements
included in this Form 10-K states that our difficulty in generating sufficient
cash flow to meet our obligations and sustain operations raise substantial
doubts about the our ability to continue as a going concern.
 
 The
Company's existence is dependent upon management's ability to develop profitable
operations. Management is devoting substantially all of its efforts to
developing new markets for its products in the United States and Europe and
reducing costs of operations, but there can be no assurance that the Company's
efforts will be successful. The accompanying consolidated financial statements
do not include any adjustments that might result should the Company be unable to
continue as a going concern.
 
 In order
to improve the Company's liquidity, the Company's management is actively
pursuing additional equity financing through discussions with lenders,
investment bankers and private investors. There can be no assurance the Company
will be successful in its effort to secure additional debt or equity
financing.
  Page
4
  INTERIM
RESULTS OF OPERATIONS
 
 COMPARISON
OF THREE MONTHS ENDED MARCH 31, 2009 TO THE THREE MONTHS ENDED MARCH 31,
2008.
 
 SALES.
Net sales during the second quarter 2009 (three months ending March 31, 2009)
were $626,378 a decrease of $1,667,102, or 72.6 %, compared to $2,293,480 during
the second quarter 2008. This decrease was due an unprecedented slowdown of
manufacturing activities in the global automobile industry.
 
 GROSS
MARGINS. Gross margins for the second quarter 2009 decreased to 9.7% from 37% in
the same period of 2008 due to pricing constraints and fixed costs embedded in
our cost of sales.
 
 OPERATING
EXPENSES
 
 SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES.
 
 Selling,
general and administrative expenses decreased by $30,775 to $906,007 in the
second quarter of 2009, compared to $936,782 in the second quarter of 2008. The
decrease was attributable to operating costs reductions we put into place with
the auto industry downturn.
 
 OPERATING
LOSS. Operating loss increased by $772,523 to a loss of ($844,763) in the second
quarter of 2009, compared to a net operating loss of ($72,240) in the second
quarter of 2008. This increase was due primarily to the factors described
above.
 
 FINANCING
EXPENSE. For the three months ended March 31, 2009, our financing expense
decreased to $27,578 from $43,017, an decrease of 35.8% over the same period
prior year.
 
 NET LOSS
increased by $707,429 to a loss of ($854,968) from a loss of
($147,539).
 
 INTERIM
RESULTS OF OPERATIONS
 
 COMPARISON
OF SIX MONTHS ENDED MARCH 31, 2009 TO THE SIX MONTHS ENDED MARCH
31,
 2008.
 
 SALES.
Net sales during the six months ending March 31, 2009 were $2,022,538, a
decrease of $3,003,865, or 59.7%, compared to $5,026,403 during the six months
ending March 31, 2008. This decrease was due to the unprecedented automotive
slow down in North America and Europe.
 
 GROSS
MARGINS. Gross margins for the six months ending March 31, 2009 were $537,130 as
compared to $1,715,916 for the six months ending March 31, 2008 a decrease from
34.1% to 26.5% in the same period of 2008. This was due to fixed costs
associated with production and services and a reduction in Sales.
 
 OPERATING
EXPENSES
 
 SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES.
 
 Selling,
general and administrative expenses increased by $18,054 to $2,061,122 in the
six months ending March 31, 2009, compared to $2,043,068 in the same period of
2008. The increase was attributable to an increase in marketing expenditures,
offset by other cost cutting measures.
 
 OPERATING
INCOME. Operating income decreased by $1,196,840 to a loss of ($1,523,992) in
the six months ending March 31, 2009, compared to a net operating loss of
($327,152) in the six month ending March 31, 2008. This decrease was due to
primarily to the economic slow down, fixed costs and the reduction in service
and product sales.
 
 FINANCING
EXPENSE. For the six months ended March 31, 2009, our interest expense increased
to $181,475 from $84,978, an increase of 53.1% over the same period prior
year.
  NET
INCOME (LOSS) increased by $1,192,742 to a loss of ($1,634,489) from a loss of
($441,747),
  Page
5





CRITICAL
ACCOUNTING POLICIES





We have
identified the policies below as critical to our business operations
and  the understanding of our results of operations. The impact and
any associated risks related to these policies on our business operations is
discussed throughout "Management's Discussion and Analysis of Financial
Condition and Results of Operations," where such policies affect our reported
and expected financial results. For a detailed discussion on the application of
these and other accounting policies see the Notes to the Financial Statements of
our Report on Form 10K. Note that our preparation of this Quarterly Report on
Form 10-Q requires us to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of our financial statements, and the reported amounts of
revenue and expenses during the reporting period. There can be no assurance that
actual results will not differ from those estimates.





ACCOUNTING
FOR VARIABLE INTEREST ENTITIES





In
December 2003, the FASB issued a revision to FASB Interpretation ("FIN") No. 46,
"Consolidation of Variable Interest Entities" (FIN No. 46R). FIN No. 46R
clarifies the application of ARB No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity risk for the
entity to finance its activities without additional subordinated financial
support. FIN No. 46R requires the consolidation of these entities, known as
variable interest entities, by the primary beneficiary of the entity. The
primary beneficiary is the entity, if any, that will absorb a majority of the
entities expected losses, receive a majority of the entity's expected residual
returns or both.





Pursuant
to the effective date of a related party lease obligation, the Company adopted
FIN 46R on January 1, 2005. This resulted in the consolidation of one variable
interest entity (VIE) of which the Company is considered the primary
beneficiary. The Company's variable interest in this VIE is the result of
providing certain secured debt mortgage guarantees on behalf of a limited
liability company that leases warehouse and general offices located in the city
of Howell, Michigan.





REVENUE
RECOGNITION





For
revenue from products and services, the Company recognizes revenue in accordance
with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services have been rendered; (3) the
selling price is fixed and determinable; and (4) collectibility is reasonably
assured. Determination of criteria (3) and (4) are based on management's
judgments regarding the fixed nature of the selling prices of the products
delivered/services rendered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or services has not been rendered or is subject to refund until such
time that the Company and the customer jointly determine that the product has
been delivered or services has been rendered or no refund will be
required.


Page
6


On
December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB)
No.104, Revenue Recognition. The staff updated and revised the existing revenue
recognition in Topic 13, Revenue Recognition, to make its interpretive guidance
consistent with current accounting guidance, principally EITF Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables." Also, SAB 104 incorporates
portions of the Revenue Recognition in Financial Statements - Frequently Asked
Questions and Answers document that the SEC staff considered relevant and
rescinds the remainder. The company's revenue recognition policies are
consistent with this guidance; therefore, this guidance will not have an
immediate impact on the company's consolidated financial
statements.





Revenues
on the sale of products, net of estimated costs of returns and allowance, are
recognized at the time products are shipped to customers, legal title has
passed, and all significant contractual obligations of the Company have been
satisfied. Products are generally sold on open accounts under credit terms
customary to the geographic region of distribution. The Company performs ongoing
credit evaluations of the customers and generally does not require collateral to
secure the accounts receivable.





The
Company generally warrants its products to be free from material defects and to
conform to material specifications for a period of three (3) years. The cost of
replacing defective products and product returns have been immaterial and within
management's expectations. In the future, when the company deems warranty
reserves are appropriate that such costs will be accrued to reflect anticipated
warranty costs.





INVENTORIES





We value
our inventories, which consist primarily of automotive body components, at the
lower of cost or market. Cost is determined on the weighted average cost method
and includes the cost of merchandise and freight. A periodic review of inventory
quantities on hand is performed in order to determine if inventory is properly
valued at the lower of cost or market. Factors related to current inventories
such as future consumer demand and trends in MWW's core business, current aging,
and current and anticipated wholesale discounts, and class or type of inventory
is analyzed to determine estimated net realizable values. A provision is
recorded to reduce the cost of inventories to the estimated net realizable
values, if required. Any significant unanticipated changes in the factors noted
above could have a significant impact on the value of our inventories and our
reported operating results.





ALLOWANCE
FOR UNCOLLECTIBLE ACCOUNTS





We are
required to estimate the collectibility of our trade receivables. A considerable
amount of judgment is required in assessing the realization of these receivables
including the current creditworthiness of each customer and related aging of the
past due balances. In order to assess the collectibility of these receivables,
we perform ongoing credit evaluations of our customers' financial condition.
Through these evaluations we may become aware of a situation where a customer
may not be able to meet its financial obligations due to deterioration of its
financial viability, credit ratings or bankruptcy. The reserve requirements are
based on the best facts available to us and are reevaluated and adjusted as
additional information is received.





Our
reserves are also based on amounts determined by using percentages applied to
certain aged receivable categories. These percentages are determined by a
variety of factors including, but are not limited to, current economic trends,
historical payment and bad debt write-off experience. We are not able to predict
changes in the financial condition of our customers and if circumstances related
to our customers deteriorate, our estimates of the recoverability of our
receivables could be materially affected and we may be required to record
additional allowances. Alternatively, if we provided more allowances than are
ultimately required, we may reverse a portion of such provisions in future
periods based on our actual collection experience.





STOCK-BASED
COMPENSATION





Prior to
January 1, 2006, we accounted for the Plans under the recognition and
measurement provisions of APB Opinion No. 25, as permitted by SFAS No. 123.
Consequently, no stock-based compensation cost relating to stock options was
recognized in the consolidated statement of income for any period prior to 2006,
as all options granted under the Plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. Effective January 1,
2006, we adopted the fair value provisions for share-based awards pursuant to
SFAS No. 123(R), using the modified-prospective-transition method. Under that
transition method, compensation cost recognized in 2006 includes (a)
compensation cost for all share-based awards granted prior to, but not yet
vested as of January 1, 2006, based on the attribution method and grant date
fair value estimated in accordance with the original provisions of SFAS No. 123,
and (b) compensation cost for all share-based awards granted subsequent to
January 1, 2006, based on the grant-date fair value estimated in accordance with
the provisions of SFAS No. 123(R), all recognized on a straight line basis as
the requisite service periods are rendered. Results for prior periods have not
been restated.


Page
7





OFF-BALANCE
SHEET ARRANGEMENTS





We do not
have any off-balance sheet arrangements.





ITEM 3. -
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The
Company is a smaller reporting company as defined by Rule 12b-2 under the
Exchange Act and is not required to provide the information required under this
item.





ITEM 4.
CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures. As of March 31, 2009,  the
Company's management carried out an evaluation, under the supervision of
the  Company's Chief Executive Officer and the Chief Financial Officer
of the effectiveness of the design and operation of the Company's system of
disclosure controls and procedures pursuant to the Securities and Exchange Act,
Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were not effective, as of
the date of their evaluation, for the purposes of recording, processing,
summarizing, and timely reporting material information required to be disclosed
in reports filed by the Company under the Securities Exchange Act of
1934.





b)
Changes in internal controls. Previously, the Company disclosed management's
determination that deficiencies existed in the Company's internal controls over
financial reporting as of September 30, 2008 under criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). As noted in the Company's
annual report on Form 10-K, management determined that control deficiencies
existed due to the Company's lack of documented policies and procedures
concerning internal controls over financial reporting, the Company's lack of an
audit committee; the Company's risk of management override given that our
officers have a high degree of involvement in our day to day operations; the
Company's lack of documented policies and procedures concerning its policy on
fraud, the Company's lack of a documented code of ethics; and the Company's lack
of effective separation of duties, which includes monitoring controls, between
the members of management.





There
were no changes in internal controls over financial reporting, known to the
Chief Executive Officer or Chief Financial Officer that occurred during the
period covered by this report that has materially affected, or is likely to
materially effect, the Company's internal control over financial reporting. In
response, the Company has addressed these deficiencies and while it has
not  eliminated each item, the Company has begun a process to address
each identified  weakness, such as, hiring an outside CPA consultant
who will provide a greater  degree of separation of duties, especially
Accounts Receivable and Accounts
Payable  management.  Further, the outside CPA consultant
will be implementing documented  policies and procedures concerning
the Company’s internal controls over financial  reporting, its policy
on fraud and code of ethics. Moreover, the Company’s board
of  directors is evaluating the cost vs. benefit of expanding its
board to include  independent directors and a separate audit
committee, as well as methods to implement  sufficient monitoring
controls among a small number of executives.





As a
result of our limited financial resources, we do not anticipate that we will
be  in a position to engage accounting personnel or a senior financial
officer in the  foreseeable future.  Until we are able to
engage a qualified financial officer, and/or  accounting staff, we may
continue to experience material weaknesses in our disclosure  controls
that may continue to adversely affect our ability to timely file our
quarterly  and annual reports.





Accordingly,
the Chief Executive Officer and Chief Financial Officer have concluded
that  the Company's disclosure controls and procedures were not
effective, as of March 31, 2009,  for the purposes of recording,
processing, summarizing, and timely reporting material  information
required to be disclosed in reports filed by the Company under the
Securities  Exchange Act of 1934.





PART
II - OTHER INFORMATION





ITEM 1.
LEGAL PROCEEDINGS





There are
no current legal proceedings.





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





None.





ITEM 3.
DEFAULTS UPON SENIOR SECURITIES





None.





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





There
were no matters submitted to a vote of the security holders during the
quarter.





ITEM 5.
OTHER INFORMATION





None.


Page
8




ITEM 6.
EXHIBITS




(a)
EXHIBIT(S) DESCRIPTION


Exhibits





(3)(i)
Certificate of Incorporation * (3)(ii) Bylaws *


(4)(1)
Form of Common Stock Certificate *


(4)(2)
Common Stock Purchase Warrant with Wendover Investments Limited *


(4)(3)
Stock Option Agreement with Richard O. Weed *


(5)
Opinion on Legality *****


(10)(1)
Consulting Agreement with Rainer Poertner ***


(10)(2)
Fee Agreement with Weed & Co. LLP *


(10)(3)
Purchase Agreement MWW and MWWLLC *


(10)(4)
Amendment to Purchase Agreement between MWW and MWWLLC **


(10)(5)
Employment Agreement with CEO Michael Winzkowski **


(10)(6)
Employment Agreement with COO/CFO James Marvin **


(10)(7)
Loan Agreement with Key Bank N.A. ***


(10)(8)
Amendment to Consulting Agreement with Rainer Poertner ***


(10)(10)
Real Property Lease Agreement for 11224 Lemen Road, Suite A ****


(10)(11)
Real Property Lease Agreement for 11236 Lemen Road ****


(10)(12)
Supplier and Warranty Agreement ****


(10)(13)
Business Loan Agreement April 4, 2006 with KeyBank N.A. ******


(10)(14)
Supplier and Warranty Agreement ****


(10)(15)
Blanket Purchase Order, Non-Disclosure and Confidentiality Agreement
******


1(0)(16)
Lease Agreement and Amendment to Lease Agreement with JCMD Properties, LLC
******


(10)(17)
Consulting Agreement with Rainer Poertner dated July 1, 2006 ******


(10)(18)
Waiver of Cashless Exercise Provisions in Warrant by Wendover Investments Ltd.
*******


(10)(19)
Waiver of Cashless Exercise Provisions in Stock Option by Richard O. Weed
*******


(10)(20)
Extension of Employment Agreement with Michael Winzkowski dated October 15,
2006


(10)(21)
Extension of Employment Agreement with James Marvin dated (21) Subsidiaries of
Registrant *


(31)(1)
Certification of Chief Executive Officer pursuant to Section302 of the
Sarbanes-Oxley Act of 2002.


(31)(2)
Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.


(32)(1)
Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, furnished under Exhibit 32 of Item 601 of Regulation
S-K.


(32)(2)
Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, furnished under Exhibit 32 of Item 601 of Regulation
S-K.









*
Previously filed on February 11, 2005 as part of the Registration Statement on
Form 10-SB12G of Marketing Worldwide Corporation SEC File 0-50586 Accession
Number 1019687-4-279.





**
previously filed on August 10, 2005 as part of the Registration Statement on
Form 10-SB12G/A Amendment No. 1 of Marketing Worldwide Corporation SEC File
0-50586 Accession Number 0001019687-04-001719.





***
previously filed on November 9, 2005 as part of the Registration Statement on
Form 10-SB12G/A Amendment No. 2 of Marketing Worldwide Corporation SEC File
0-50586 Accession Number 0001019687-04-002436.





****
Previously filed on January 31, 2006 as part of the Form 10-KSB for the year
ended September 30, 2005 of Marketing Worldwide Corporation SEC File 0-50586
Accession Number 0001019687-05-000207.





*****
previously filed on March 17, 2006 as part of the Form SB-2 of Marketing
Worldwide Corporation SEC File 333-123380 Accession Number
0001019687-05-000728.





******
previously filed on September 15, 2006 as part of the Form SB-2 of Marketing
Worldwide Corporation SEC File 333-123380 Accession Number
0001019687-05-002649.





*******
previously filed on December 7, 2006 as part of the Form SB-2 of Marketing
Worldwide Corporation SEC File 333-123380 Accession Number
0001019687-05-003367.


Page
9




SIGNATURE





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.




MARKETING
      WORLDWIDE CORPORATION
                            (Registrant)(Date): May 15, 2009
                          By:
                          /S/
                          JAMES
      MARVINJames
      MarvinVice
      President Finance,Chief
      Financial Officer(Principal
      Financial and Accounting
Officer)




Page
10




EXHIBIT
INDEX





(31)(1)
Certification of Chief Executive Officer pursuant to Section302 of the
Sarbanes-Oxley Act of 2002.





(31)(2)
Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.





(32)(1)
Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, furnished under Exhibit 32 of Item 601 of Regulation
S-K.





(32)(2)
Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, furnished under Exhibit 32 of Item 601 of Regulation
S-K.


Page
11