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 JUNE 30, 2010
 
  ̈
                TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes   ̈
No  x
 
 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, August 13,
2010  21,010,091
  
 
 MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 
 Form 10-Q
for the Quarter ended June 30, 2010
 
 Table of
Contents
 
 PAGEPART
      I - FINANCIAL INFORMATIONITEM
      1 - FINANCIAL STATEMENTSCondensed
      Consolidated Balance Sheets as of June 30, 2010 (unaudited) and September
      30, 2009
                    
                    
                    F-1Condensed
      Consolidated Statements of Operations for the three and nine month periods
      ended June 30, 2010 and 2009 (unaudited)
                    
                    
                    F-2Condensed
      Consolidated Statements of Cash Flows for the nine month periods ended
      June 30, 2010 and 2009 (unaudited)
                    
                    
                    F-3Notes
      to unaudited Condensed Consolidated Financial Statements
                    
                    
                    F-4ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS
                    
                    
                    2ITEM
      3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
                    
                    
                    9ITEM
      4T - CONTROLS AND PROCEDURESPART
      II - OTHER INFORMATIONITEM
      1 - LEGAL PROCEEDINGS
                    
                    
                    9ITEM
      1A – RISK FACTORSITEM
      2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
                    
                    
                    9ITEM
      3 - DEFAULTS UPON SENIOR SECURITIES
                    
                    
                    9ITEM
      5 - OTHER INFORMATION
                    
                    
                    9ITEM
      6 - EXHIBITS
                    
                    
                    10SIGNATURES
                    
                    
                    12
  Page
1
 
 MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 
 June 30,
                    
                    
                    September 30,2010
                    
                    
                    2009(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                    
                    $
                    24,133
                    
                    
                    $
                    113,539Accounts
      receivable, net
                    
                    
                    334,574
                    
                    
                    
                    737,094Inventories,
      net
                    
                    
                    249,472
                    
                    
                    
                    543,075Other
      current assets
                    
                    
                    50,701
                    
                    
                    
                    24,564Current
      assets of discontinued operations
                    
                    
                    -
                    
                    
                    
                    184,833Total
      current assets
                    
                    
                    658,880
                    
                    
                    
                    1,603,105Property,
      plant and equipment, net
                    
                    
                    2,631,304
                    
                    
                    
                    2,903,520Other
      assets:Other
      intangible assets
                    
                    
                    57,500
                    
                    
                    
                    80,000Capitalized
      finance costs, net
                    
                    
                    238,802
                    
                    
                    
                    337,750Other
      assets, net
                    
                    
                    19,400
                    
                    
                    
                    19,400Other
      assets of discontinued operations
                    
                    
                    -
                    
                    
                    
                    178,352Total
      other assets
                    
                    
                    315,702
                    
                    
                    
                    615,502Total
      assets
                    
                    $
                    3,605,886
                    
                    
                    $
                    5,122,127LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      liabilities:Bank
      line of credits
                    
                    $
                    244,750
                    
                    
                    $
                    721,224Notes
      payable and capital leases, current portion
                    
                    
                    1,872,997
                    
                    
                    
                    1,919,692Accounts
      payable
                    
                    
                    1,229,061
                    
                    
                    
                    663,586Warranty
      liability
                    
                    
                    66,216
                    
                    
                    
                    66,216Interest
      swap liabilities
                    
                    
                    108,200
                    
                    
                    
                    82,075Due
      to supplier
                    
                    
                    195,000
                    
                    
                    
                    -Other
      current liabilities
                    
                    
                    589,750
                    
                    
                    
                    325,759Current
      liabilities of discontinued operations
                    
                    
                    492,006
                    
                    
                    
                    464,229Total
      current liabilities
                    
                    
                    4,797,980
                    
                    
                    
                    4,242,781Long
      term debt:Derivative
      liability
                    
                    
                    1,021,292
                    
                    
                    
                    -Capital
      leases, long term
                    
                    
                    -
                    
                    
                    
                    21,247Total
      liabilities
                    
                    
                    5,819,272
                    
                    
                    
                    4,264,028Series
      A convertible preferred stock, $0.001 par value; 3,500,000 shares issued
      and outstanding
                    
                    
                    3,499,950
                    
                    
                    
                    3,499,950Stockholders'
      DeficiencySeries
      B convertible preferred stock, $0.001 par value, 10,000,000 authorized;
      1,192,308 shares issued and outstanding as of June 30, 2010 and September
      30, 2009
                    
                    
                    1,192
                    
                    
                    
                    1,192Common
      stock, $0.001 par value, 100,000,000 shares authorized; 21,010,091 and
      17,835,091 shares issued and outstanding as of June 30, 2010 and September
      30, 2009, respectively
                    
                    
                    21,010
                    
                    
                    
                    17,835Additional
      paid in capital
                    
                    
                    8,190,379
                    
                    
                    
                    9,639,388Deficit
                    
                    
                    (13,725,835
                    )
                    
                    
                    (12,154,087
                    )Accumulated
      other comprehensive loss
                    
                    
                    (148,873
                    )
                    
                    
                    (107,929
                    )Total
      Marketing Worldwide Corporation stockholders' deficiency
                    
                    
                    (5,662,127
                    )
                    
                    
                    (2,603,601
                    )Non
      controlling interest
                    
                    
                    (51,209
                    )
                    
                    
                    (38,250
                    )Total
      stockholders' deficiency
                    
                    
                    (5,713,336
                    )
                    
                    
                    (2,641,851
                    )Total
      Liabilities and Stockholders' Deficiency
                    
                    $
                    3,605,886
                    
                    
                    $
                    5,122,127
 
 See the
accompanying notes to the unaudited condensed consolidated financial
statements
  F-1
 
 MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 CONDENSED  CONSOLIDATED
STATEMENTS OF OPERATIONS
 (unaudited)
 
 Three months ended June 30,
                  
                  
                  Nine months ended June 30,2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009Revenue
                  
                  $
                  1,051,495
                  
                  
                  $
                  834,406
                  
                  
                  $
                  3,223,922
                  
                  
                  $
                  2,541,087Total
      cost of sales
                  
                  
                  581,319
                  
                  
                  
                  389,837
                  
                  
                  
                  2,071,116
                  
                  
                  
                  1,433,674Gross
      profit
                  
                  
                  470,176
                  
                  
                  
                  444,569
                  
                  
                  
                  1,152,806
                  
                  
                  
                  1,107,413Operating
      expenses:Selling,
      general and administrative expenses
                  
                  
                  732,102
                  
                  
                  
                  731,709
                  
                  
                  
                  2,839,603
                  
                  
                  
                  2,475,989Loss
      from operations
                  
                  
                  (261,926
                  )
                  
                  
                  (287,140
                  )
                  
                  
                  (1,686,797
                  )
                  
                  
                  (1,368,576
                  )Gain
      on change in fair value of derivative liability
                  
                  
                  994,018
                  
                  
                  
                  -
                  
                  
                  
                  949,823
                  
                  
                  
                  -Financing
      expenses
                  
                  
                  (84,367
                  )
                  
                  
                  (33,382
                  )
                  
                  
                  (290,208
                  )
                  
                  
                  (214,857
                  )Other
      income (expense), net
                  
                  
                  75,916
                  
                  
                  
                  24,464
                  
                  
                  
                  83,743
                  
                  
                  
                  44,182Income
      (Loss) from continuing operations
                  
                  
                  723,641
                  
                  
                  
                  (296,058
                  )
                  
                  
                  (943,439
                  )
                  
                  
                  (1,539,251
                  )Loss
      from discontinued operations
                  
                  
                  (27,789
                  )
                  
                  
                  (143,787
                  )
                  
                  
                  (405,017
                  )
                  
                  
                  (579,381
                  )Net
      Income (Loss)
                  
                  
                  695,852
                  
                  
                  
                  (439,845
                  )
                  
                  
                  (1,348,456
                  )
                  
                  
                  (2,118,632
                  )Income
      (loss) attributable to Non-controlling interest
                  
                  
                  5,835
                  
                  
                  
                  -
                  
                  
                  
                  (12,959
                  )
                  
                  
                  44,298Income
      (loss) attributable to Company
                  
                  
                  690,017
                  
                  
                  
                  (439,845
                  )
                  
                  
                  (1,335,497
                  )
                  
                  
                  (2,162,930
                  )Preferred
      stock dividend
                  
                  
                  (78,750
                  )
                  
                  
                  (78,750
                  )
                  
                  
                  (236,250
                  )
                  
                  
                  (236,250
                  )NET
      INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
                  
                  $
                  611,267
                  
                  
                  $
                  (518,595
                  )
                  
                  $
                  (1,571,747
                  )
                  
                  $
                  (2,399,180
                  )Income
      (loss) per common share, basic:Continuing
      operations
                  
                  $
                  0.03
                  
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.11
                  )Discontinued
      operations
                  
                  
                  (0.00
                  )
                  
                  
                  (0.01
                  )
                  
                  
                  (0.02
                  )
                  
                  
                  (0.03
                  )Total
                  
                  $
                  0.03
                  
                  
                  $
                  (0.03
                  )
                  
                  $
                  (0.08
                  )
                  
                  $
                  (0.14
                  )Income
      (loss) per common share, fully dilutedContinuing
      operations
                  
                  $
                  0.02
                  
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.11
                  )Discontinued
      operations
                  
                  
                  (0.00
                  )
                  
                  
                  (0.01
                  )
                  
                  
                  (0.02
                  )
                  
                  
                  (0.03
                  )Total
                  
                  $
                  0.02
                  
                  
                  $
                  (0.03
                  )
                  
                  $
                  (0.08
                  )
                  
                  $
                  (0.14
                  )Weighted
      average common stock outstandingBasic
                  
                  
                  21,010,091
                  
                  
                  
                  17,168,003
                  
                  
                  
                  19,577,509
                  
                  
                  
                  16,903,278Fully
      Diluted
                  
                  
                  42,299,817
                  
                  
                  
                  17,168,003
                  
                  
                  
                  19,577,509
                  
                  
                  
                  16,903,278Comprehensive
      loss:Net
      Income (loss)
                  
                  $
                  695,852
                  
                  
                  $
                  (439,845
                  )
                  
                  $
                  (1,348,456
                  )
                  
                  $
                  (2,118,632
                  )Foreign
      currency translation, loss
                  
                  
                  (13,488
                  )
                  
                  
                  (43,902
                  )
                  
                  
                  (40,944
                  )
                  
                  
                  (45,940
                  )Comprehensive
      income (loss)
                  
                  
                  682,364
                  
                  
                  
                  (483,747
                  )
                  
                  
                  (1,389,400
                  )
                  
                  
                  (2,164,572
                  )Comprehensive
      income (loss) attributable to non controlling interest
                  
                  
                  5,835
                  
                  
                  
                  -
                  
                  
                  
                  (12,959
                  )
                  
                  
                  44,298Comprehensive
      income (loss) attributable to Marketing Worldwide
    Corporation
                  
                  $
                  676,529
                  
                  
                  $
                  (483,747
                  )
                  
                  $
                  (1,376,441
                  )
                  
                  $
                  (2,208,870
                  )
 
 See the
accompanying notes to the unaudited condensed consolidated financial
statements
  F-2
 
 MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 NINE
MONTHS ENDED JUNE 30, 2010 AND 2009
 (unaudited)
 
 2010
                    
                    
                    2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss attributable to continuing operations
                    
                    $
                    (943,439
                    )
                    
                    $
                    (1,539,251
                    )Loss
      from discontinued operations
                    
                    
                    (405,017
                    )
                    
                    
                    (579,381
                    )Adjustments
      to reconcile net loss to cash provided by (used
      in)  operations:Depreciation
      and amortization
                    
                    
                    331,222
                    
                    
                    
                    310,903-Amortization
      of deferred financing costs
                    
                    
                    98,948
                    
                    
                    
                    98,948Beneficial
      conversion feature attributable to convertible debt
                    
                    
                    6,250
                    
                    
                    
                    -Loss
      on disposal of property, plant and equipment
                    
                    
                    10,617Change
      in fair value of derivative liability
                    
                    
                    (949,823
                    )
                    
                    
                    -Fair
      value of vested employee options
                    
                    
                    5,831
                    
                    
                    
                    109,779Common
      stock issued for services rendered
                    
                    
                    434,250
                    
                    
                    
                    61,500Changes
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    402,520
                    
                    
                    
                    268,140Inventory
                    
                    
                    293,603
                    
                    
                    
                    154,636Other
      current assets
                    
                    
                    (26,137
                    )
                    
                    
                    268,150Other
      assets
                    
                    
                    -
                    
                    
                    
                    20Accounts
      payable
                    
                    
                    711,374
                    
                    
                    
                    (301,397
                    )Other
      current liabilities
                    
                    
                    181,916
                    
                    
                    
                    (201,103
                    )Cash
      provided by (used in) continuing operating activities
                    
                    
                    152,115
                    
                    
                    
                    (1,349,056
                    )Cash
      provided by discontinued operating operations
                    
                    
                    241,960
                    
                    
                    
                    528,294Net
      cash provided by (used in) operating activities:
                    
                    
                    394,075
                    
                    
                    
                    (820,762
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property and equipment, continuing operations
                    
                    
                    (47,123
                    )
                    
                    
                    (9,084
                    )Cash
      provided by (used) in discontinued investing activities
                    
                    
                    149,002
                    
                    
                    
                    (23,665
                    )Net
      cash provided by (used in) investing activities:
                    
                    
                    101,879
                    
                    
                    
                    (32,749
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Distribution
      by non controlling entity
                    
                    
                    -
                    
                    
                    
                    (90,000
                    )Proceeds
      (repayments of) from lines of credit
                    
                    
                    (476,474
                    )
                    
                    
                    234,790Proceeds
      from promissory note
                    
                    
                    25,000
                    
                    
                    
                    -Repayments
      of notes payable and capital leases
                    
                    
                    (92,942
                    )
                    
                    
                    (79,724
                    )Cash
      (used in) provided by continuing financing activities
                    
                    
                    (544,416
                    )
                    
                    
                    65,066Cash
      provided by discontinued financing activities
                    
                    
                    -
                    
                    
                    
                    2,050Net
      cash (used in) provided by financing activities
                    
                    
                    (544,416
                    )
                    
                    
                    67,116Effect
      of currency rate change on cash:
                    
                    
                    (40,944
                    )
                    
                    
                    (45,940
                    )Net
      decrease in cash and cash equivalents
                    
                    
                    (89,406
                    )
                    
                    
                    (832,335
                    )Cash
      and cash equivalents, beginning of period
                    
                    
                    113,539
                    
                    
                    
                    1,003,071Cash
      and cash equivalents, end of period
                    
                    $
                    24,133
                    
                    
                    $
                    170,736SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Cash
      paid during year for interest
                    
                    $
                    251,433
                    
                    
                    $
                    139,322NON-CASH
      TRANSACTIONS:Common
      stock issued in settlement of debt
                    
                    $
                    78,950
                    
                    
                    $
                    -Common
      stock issued for services rendered
                    
                    $
                    434,250
                    
                    
                    $
                    80,000Common
      stock issued for dividend payments
                    
                    $
                    -
                    
                    
                    $
                    236,250
 
 See the
accompanying notes to the unaudited condensed consolidated financial
statements
  F-3
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
A – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
 
 Nature of
Operations
 
 Marketing
Worldwide Corporation (the "Company"), was incorporated under the laws of the
State of Delaware in July 2003. The Company is engaged in North America 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 its wholly- owned subsidiary
Colortek, Inc in Baroda, Michigan.
 
 Basis of
presentation
 
 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 nine month period ended June 30, 2010, are
not necessarily indicative of the results that may be expected for the year
ended September 30, 2010. The unaudited condensed consolidated financial
statements should be read in conjunction with the September 30, 2009 financial
statements and footnotes thereto included in the Company's SEC Form 10-K. The
Company has evaluated and included subsequent events through the filing date of
this Form 10-Q.
 
 The
unaudited condensed 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. The consolidated financial
statements also include a variable interest entity (VIE) of which the Marketing
Worldwide LLC is the primary beneficiary as further described in Note K. The
results of MW Global Limited including Modelworxx GmbH are shown as discontinued
operations in the financial statements. All significant inter-company
transactions and balances, including those involving the VIE, have been
eliminated in consolidation.
 
 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Revenue
Recognition
 
 For
revenue from products and services, the Company recognizes revenue in accordance
with Accounting Standards Codification subtopic 605-10, Revenue Recognition
(“ASC 605-10”). ASC 605-10 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.
  F-4
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 ASC
605-10 incorporates Accounting Standards Codification subtopic 605-25,
Multiple-Element Arrangements (“ASC 605-25”). ASC 605-25 addresses accounting
for arrangements that may involve the delivery or performance of multiple
products, services and/or rights to use assets. The effect of implementing
605-25 on the Company's financial position and results of operations was not
significant.
 
 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.
 
 Inventories
 
 The
inventory are stated at the lower of cost (first in, first out) or net
realizable value and majority of the inventory consists of work in
process  goods available for sale. The Company purchases the
merchandise on delivered duty paid basis. The amounts for cost of goods sold
during the three and nine month periods ended June 30, 2010 and 2009 are removed
from inventory on weighted average cost method.
 
 Net 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 Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC
260-10”). However, diluted net (loss) per share for the nine month periods ended
June 30, 2010 and 2009 do not reflect the effects of 21,289,726 and
18,335,091 shares potentially issuable upon conversion of our convertible
preferred shares and convertible debt as of June 30, 2010 and 2009,
respectively, and 1,000,000 and 1,490,000 shares potentially issuable upon the
exercise of the Company's stock options and warrants (calculated using the
treasury stock method) as of June 30, 2010 and 2009, respectively. These were
not considered for the three and nine month periods ended June 30, 2010 and
2009, respectively, as they would have been anti-dilutive.
 
 Comprehensive Income
(Loss)
 
 The
Company adopted Statement of Accounting Standards Codification subtopic 220-10,
Comprehensive Income (“ASC 220-10”). ASC 220-10 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. ASC 220-10
requires other comprehensive income (loss) to include foreign currency
translation adjustments and unrealized gains and losses on available for sale
securities.
  F-5
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Effect of Related
Prospective Accounting Pronouncement
 
 Effective
October 1, 2009 and in accordance with Accounting Standards Codification
subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC
815-40”), the Company initially recorded the derivative liability of $1,971,115
with respect to the reset provision of its Preferred Stock using the
Black-Scholes formula assuming no dividends, a risk-free interest rate of 1.36%,
expected volatility of 265.79%, and expected life of 2.56 years. Changes in fair
value are recorded as non-operating, non-cash income or expense at each
reporting date.
 
 The fair
value of the reset provision of $1,021,292 at June 30, 2010 was determined using
the Black Scholes Option Pricing Model with the following
assumptions:
 
 Dividend
      yield:
                    
                    
                    -0-
                    %Volatility
                    
                    
                    361.60
                    %Risk
      free rate:
                    
                    
                    0.61
                    %
 
 As of the
date of the financial statements, the Company believes an event under the
contract that would create an obligation to settle in cash or other current
assets is remote and has classified the obligation as a long term
liability.
 
 The
change in fair value of the derivative liability resulted in a current period
non operating gain to operations of $994,018 and $949,823 for the three and nine
month periods ended June 30, 2010.
 
 Reclassification
 
 Certain
reclassifications have been made to conform prior period data to the current
presentation. These reclassifications had no effect on reported net income
(loss).
  Accounting for variable
interest entities
 
 Accounting
Standards Codification subtopic 810-10, Consolidation (“ASC 810-10”) discusses
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. ASC 810-10 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
ASC 810-10.  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.  As a result the Company recorded the equity of
this VIE as a non controlling interest in the financial
statements.
  F-6
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Implementation of Accounting
Standards Codification subtopic 810-10, Consolidation (“ASC
810-10”)
 
 Effective
October 1, 2009, the Company adopted the provisions of ASC 810-10. Pursuant to
ASC 810-10, the following provisions were applied retrospectively to all periods
presented in the financial statements:
 
 ·
              The Company reclassified
      noncontrolling interests, formerly known as “minority interests,” from a
      separate caption between liabilities and stockholders’ equity (“mezzanine
      section”) to a component of equity  Previously, minority
      interests generally were reported in the balance sheet in the mezzanine
      section.
 
 ·
              Consolidated net income and
      comprehensive income include amounts attributable to both the Company and
      the noncontrolling interests. Previously, net income attributable to the
      noncontrolling interests was reported as a deduction in arriving at
      consolidated net income. This presentation change does not impact the
      calculation of basic or diluted earnings per share, which continue to be
      calculated based on Net income attributable to the
      Company.
 
 Pursuant
to ASC 810-10, the following provisions were applied prospectively effective
October 1, 2009:
 
 ·
              ASC 810-10 provides that all
      earnings and losses of a subsidiary should be attributed to the parent and
      the noncontrolling interest, even if the losses attributable to the
      noncontrolling interest result in a deficit noncontrolling interest
      balance. Previously, any losses exceeding the noncontrolling interest’s
      investment in the subsidiary were attributed to the parent. This change
      did not have a significant impact on the Company’s  condensed
      consolidated financial statements for the three and nine month period
      ended June 30, 2010.
 
 Recent accounting
pronouncements
  In March
2010, the FASB issued new accounting guidance, under ASC Topic 605 on Revenue
Recognition.  This standard provides that the milestone method
is a valid application of the proportional performance model for revenue
recognition if the milestones are substantive and there is substantive
uncertainty about whether the milestones will be
achieved.  Determining whether a milestone is substantive requires
judgment that should be made at the inception of the arrangement.  To
meet the definition of a substantive milestone, the consideration earned by
achieving the milestone (1) would have to be commensurate with either the level
of effort required to achieve the milestone or the enhancement in the value of
the item delivered, (2) would have to relate solely to past performance, and (3)
should be reasonable relative to all deliverables and payment terms in the
arrangement.  No bifurcation of an individual milestone is allowed and
there can be more than one milestone in an arrangement.  The standard
is effective for interim and annual periods beginning on or after June 15,
2010.  The Company is currently evaluating the impact the adoption of
this guidance will have on its financial statements.
  F-7
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Recent Accounting
Pronouncements (Continued)
 
 In May
2010, the FASB issued Accounting Standards Update No. 2010-19, “Foreign
Currency Issues: Multiple Foreign Currency Exchange Rates.” The guidance
provides clarification of accounting treatment when reported balances in an
entity’s financial statements differ from their underlying U.S. dollar
denominated values due to different rates being used for remeasurement and
translation. The guidance indicates that upon adopting highly inflationary
accounting for Venezuela, since the U.S. dollar is now the functional
currency of a Venezuelan subsidiary, there should no longer be any differences
between the amounts reported for financial reporting purposes and the amount of
any underlying U.S. dollar denominated value held by the subsidiary.
Therefore, any differences between these should either be recognized in the
income statement or as a cumulative translation adjustment, if the difference
was previously recognized as a cumulative translation adjustment. The adoption
of this standard did not have any impact on the Company’s consolidated financial
position and results of operations.
 
 In
April 2010, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update (“ASU”) No. 2010-13, “Effect of Denominating the Exercise
Price of a Share-Based Payment Award in the Currency of the Market in Which the
Underlying Equity Security Trades” (“ASU 2010-13”). ASU 2010-13 addresses
the classification of a share-based payment award with an exercise price
denominated in the currency of a market in which the underlying equity security
trades. FASB Accounting Standards Codification (“ASC”) Topic 718 was amended to
clarify that a share-based payment award with an exercise price denominated in
the currency of a market in which a substantial portion of the entity’s equity
securities trade shall not be considered to contain a market, performance or
service condition. Therefore, such an award is not to be classified as a
liability if it otherwise qualifies for equity classification. The amendments in
ASU 2010-13 are effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2010, with early
application permitted.The adoption of this
standard did not have a material impact on the Company’s consolidated financial
position and results of operations.
  F-8
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE C - GOING CONCERN MATTERS AND
TRIGGERING EVENTS
 
 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 nine month period ended June 30, 2010, the Company incurred a loss of
$1,571,747.
  On
January 27, 2009, the primary secured lender notified the Company that the
Company was in default of its obligations under the 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.
  The
Company has reduced cash required for operations by reducing operating costs and
reducing staff levels. In addition, the Company is working to manage its current
liabilities while it continues to make changes in operations to improve its cash
flow and liquidity position. An estimated $2,000,000 is needed over the next 12
months for operational and program development purposes.
 
 The
Company's existence is dependent upon management's ability to raise additional
financing and develop profitable operations. The Company cannot predict
whether this additional financing will be in the form of equity or
debt, or be in another form. The Company may not be able to obtain the
necessary additional capital on a
timely basis, on acceptable terms, or at all. If
additional financing is not available or is not available on acceptable terms,
we will have to curtail our operations.
 
 These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern. Accordingly, the accompanying unaudited condensed consolidated
financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America, which contemplates
continuation of the Company as going concern and the realization of assets and
the satisfaction of liabilities in the normal course of business. The carrying
amounts of assets and liabilities presented in the financial statements do not
necessarily purport to represent realizable or settlement values. These
unaudited condensed consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  NOTE
D - LINE OF CREDIT
 
 In August
2009, Marketing Worldwide, LLC entered into a financing agreement with Summit
Financial Resources L.P. (Summit) for a maximum borrowing of up to $750,000
maturing August 31, 2010. The arrangement is based on recourse factoring of the
Company’s accounts receivables. Substantially all assets of Marketing Worldwide,
LLC have been pledged as collateral for the Summit
facility.   Marketing Worldwide Corp has guaranteed the financing
arrangement.  The Summit agreement contains a 60 day notice before
termination.  Neither the Company or Summit has provided any type of
notice to terminate the agreement.  Absent any notification to
terminate, the existing agreement will automatically renew.
 
 In
September 2009, Marketing Worldwide, LLC entered into an addendum which
increased the maximum borrowing amount to $1,000,000.
  F-9
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
D - LINE OF CREDIT (continued)
 
 Under the
arrangement, Summit typically advances to the Company 85% of the total amount of
accounts receivable factored. Summit retains 15% of the outstanding factored
accounts receivable as a reserve, which it holds until the customer pays the
factored invoice to Summit. The cost of funds for the accounts receivable
portion of the borrowings with Summit includes: (a) a collateral management fee
of 0.65% of the face amount of factored accounts receivable for each period of
fifteen days, or portion thereof, that the factored accounts receivable remains
outstanding until payment in full is applied and (b) interest charged at the
Wall Street Journal prime rate plus 1% divided by 360.  The Summit
default rate is the Wall Street Journal prime rate plus 10%. The Company may be
obligated to purchase the receivable back from Summit at the end of 90
days.
 
 The
interest rate at June 30, 2010 was 4.25%
  Under the
terms of the recourse provision, the Company is required to repurchase factored
receivables if they are not paid in full or are deemed no longer acceptable.
Accordingly, the Company has accounted for the financing agreement as a secured
borrowing arrangement and not a sale of financial assets.
  As
of June 30, 2010, the advance balance due to Summit was $244,750.
  NOTE
E - NOTES PAYABLE AND CAPITAL LEASES
 
 As of
June 30, 2010 and September 30, 2009, notes payable consists of the
following:
 June 30,
                        2010
                      
                      
                      September 30,
                        2009JCMD
      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 guarantee the
      loan. The note is in default. (*)
                      
                      $
                      669,352
                      
                      
                      $
                      683,165JCMD
      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
      guarantee the loan The note is in default. (*)
                      
                      
                      538,800
                      
                      
                      
                      551,850Mortgage
      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.
      The note is currently in default. (**)
                      
                      
                      623,281
                      
                      
                      
                      644,129Notes
      payable in monthly payments of $1,857.54 per month including interest at
      7.25% per annum, unsecured
                      
                      
                      11,847
                      
                      
                      
                      24,218Capital
      leases, net
                      
                      
                      4,717
                      
                      
                      
                      16,330Convertible
      promissory note, due on demand with interest rate of 5% per annum,
      convertible into shares of the Company’s common stock at 80% discount to
      market at the date of conversion, but in no event , lower than $0.07 per
      share, unsecured
                      
                      
                      25,000
                      
                      
                      
                      -1,872,997
                      
                      
                      
                      1,919,692Less
      current portion
                      
                      
                      1,872,997
                      
                      
                      
                      1,919,692Long
      term portion
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
 F-10
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
E - NOTES PAYABLE (continued)
 
 (*)
In accordance with the Forbearance Agreement, the secured lender of the JCMD
Mortgage Loans increased the interest rate on unpaid balances to bear interest
at a floating rate of two and quarter percent (2.25%) in excess of the Bank’s
Prime Rate, and upon default shall bear interest at a rate of five and one
quarter percent (5.25%) in excess of the Bank’s Prime Rate. At June 30, 2010,
the effective rate of interest on these loans was 8.25%
 
 (**) In
accordance with the mortgage loan agreement, the Company (as guarantor) is
currently in default of certain loan covenants.
 
 NOTE
F – OTHER CURRENT LIABILITIES
 
 Other
current liabilities consist of the following at June 30, 2010 and September 30,
2009:
 
 June 30, 2010
                        
                        
                        September 30, 2009Dividends
      payable
                        
                        $
                        392,250
                        
                        
                        $
                        157,500Consulting
      fees
                        
                        
                        103,200
                        
                        
                        
                        76,600Payroll
      and other miscellaneous
                        
                        
                        94,300
                        
                        
                        
                        91,659Total
                        
                        $
                        589,750
                        
                        
                        $
                        325,759
 
 NOTE
G - CAPITAL STOCK
 
 The
Company is authorized to issue 110,000,000 shares of which stock 100,000,000
shares at par value of $.001 each shall be common stock and 10,000,000 shares at
par value of $.001 each shall be preferred stock.
 
 As of
June 30, 2010 and September 30, 2009, the Company has issued and outstanding
3,500,000 shares of Series A preferred stock, 1,192,308 Series B preferred stock
and 21,010,091 and 17,835,091 shares of common stock, respectively.
 
 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. At June 30, 2010 and September 30, 2009, a total of
$393,750 and $157,500 has been accrued for dividends payable on the Series A
Preferred stock.
 
 As
additional consideration for the purchase of the Series A Preferred Stock, the
Company granted to the holders warrants entitling them 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 not exercised by April 23, 2012.
 
 In
accordance with Accounting Standards Codification subtopic 470-20, Debt, Debt
with Conversions and Other Options (“ASC 470-20”), 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 embedded beneficial conversion feature, to additional
paid-in capital and a charge as 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.
  F-11
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
G - CAPITAL STOCK (continued)
 
 In
accordance with ASC 470-20, the Company has classified the Series A Preferred
Stock outside of permanent equity.
 
 In
addition, The Series A Preferred Stock has reset provisions to the exercise
price if the Company issues equity at a price less than the exercise price and
therefore, as described in Note B above, and in accordance with ASC 815-40 the
Company determined the fair value of the initial reset provision of $1,971,115
at October 1, 2009 and reclassified to liability using the Black-Scholes formula
assuming no dividends, a risk-free interest rate of 1.36%, expected volatility
of 265.79%, and expected life of 2.56 years. The net value of the reset
provision at the date of adoption of ASC 815-40 was recorded as a derivative
liability.  Changes in fair value are recorded as non-operating,
non-cash income or expense at each reporting date.
 
 The fair
value of the reset provision of $1,021,292 at June 30, 2010 was determined using
the Black Scholes Option Pricing Model with the following
assumptions:
 
 Dividend
      yield:
                    
                    
                    -0-
                    %Volatility
                    
                    
                    361.60
                    %Risk
      free rate:
                    
                    
                    0.61
                    %
 
 The
change in fair value of the derivative liability resulted in a non operating
gain to operations of $994,018 and $949,823 for the three and nine months ended
June 30, 2010, respectively.
  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. If declared by the Company, dividends on the Series B Preferred
Stock shall be on a pro rata basis with the Common Stock and all other equity
securities of the Company ranking pari passu with the Common Stock as to the
payment of dividends.
  VOTING
RIGHTS. The holders of Series B 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.
 
 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.
  F-12
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
G - CAPITAL STOCK (continued)
 
 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.
 
 As of
June 30, 2010, the Company has 1,192,308 shares of Series B Preferred Stock
outstanding.
 
 Common
stock
 
 On
October 9, 2009, the Company issued 500,000 shares of common stock in settlement
of outstanding accounts payable of $78,950.
  On
October 9, 2009, the Company issued an aggregate of 80,000 shares of common
stock in exchange for services valued at $12,000.  These shares were
valued at $0.15 per share which represents the fair value of services received
which did not differ materially from the value of the stock issued.
 
 On
February 17, 2010, the Company issued an aggregate of 1,520,000 shares of common
stock in exchange for services valued at $304,000.  These shares were
valued at $0.20 per share which represents the fair value of services received
which did not differ materially from the value of the stock issued.
 
 On March
10, 2010, the Company issued an aggregate of 1,075,000 shares of common stock in
exchange for services valued at $118,250.  These shares were valued at
$0.11 per share which represents the fair value of services received which did
not differ materially from the value of the stock
issued.
  F-13
  MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
H - 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 June 30, 2010:
 
 Options ExercisableOptions Outstanding
                                                                      
                                                                      
                                                                      WeightedWeighted Average
                                                                      
                                                                      
                                                                      Average
                                                                      
                                                                      
                                                                      WeightedExercise
                                                                      
                                                                      
                                                                      Number
                                                                      
                                                                      
                                                                      Remaining Contractual
                                                                      
                                                                      
                                                                      Exercise
                                                                      
                                                                      
                                                                      Number
                                                                      
                                                                      
                                                                      AveragePrice
                                                                      
                                                                      
                                                                      Outstanding
                                                                      
                                                                      
                                                                      Life (Years)
                                                                      
                                                                      
                                                                      Price
                                                                      
                                                                      
                                                                      Exercisable
                                                                      
                                                                      
                                                                      Exercise Price$
                                                                      0.26
                                                                      
                                                                      
                                                                      
                                                                      490,000
                                                                      
                                                                      
                                                                      
                                                                      3.01
                                                                      
                                                                      
                                                                      $
                                                                      0.26
                                                                      
                                                                      
                                                                      
                                                                      430,000
                                                                      
                                                                      
                                                                      $
                                                                      0.26$
                                                                      0.45
                                                                      
                                                                      
                                                                      
                                                                      170,000
                                                                      
                                                                      
                                                                      
                                                                      3.90
                                                                      
                                                                      
                                                                      $
                                                                      0.45
                                                                      
                                                                      
                                                                      
                                                                      170,000
                                                                      
                                                                      
                                                                      $
                                                                      0.45660,000
                                                                      
                                                                      
                                                                      
                                                                      3.25
                                                                      
                                                                      
                                                                      $
                                                                      0.31
                                                                      
                                                                      
                                                                      
                                                                      600,000
                                                                      
                                                                      
                                                                      $
                                                                      0.32
 
 Transactions
involving options issued to employees are summarized as follows:
 
 Number of
                                Options
                              
                              
                              Weighted
                                Average
                                Exercise
                                Price per
                                Share
                              
                              
                              Intrinsic
                                Value Per
                                ShareOutstanding,
      September  30, 2009
                              
                              
                              660,000
                              
                              
                              
                              0.31
                              
                              
                              $
                              0.00Granted
                              
                              
                              -
                              
                              
                              
                              -Exercised
                              
                              
                              -
                              
                              
                              
                              -Canceled
      or expired
                              
                              
                              -
                              
                              
                              
                              -Outstanding,
      June 30, 2010
                              
                              
                              660,000
                              
                              
                              $
                              0.31
                              
                              
                              $
                              0.00Exercisable,
      June 30, 2010
                              
                              
                              600,000
                              
                              
                              $
                              0.32
                              
                              
                              $
 
 The
weighted average fair value of the options on the date of grant, using the fair
value based methodology of the nine months ended June 30, 2010 and 2009 was $-0-
and $-0-.
  The
Company recorded as current period expenses the vested portions of the above
employee options of $1,944 and $17,196 for the three month periods ended June
30, 2010 and 2009, respectively, and $5,831 and $109,779 for the nine month
periods ended June 30, 2010 and 2009. As of June 30, 2010, total unamortized
value of stock options held by employees was $7,028.
 
 At June
30, 2010, the unamortized portion will be expensed over a weighted average
period of 0.92 years.
  F-14


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
H - STOCK OPTIONS AND WARRANTS (continued)





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 June 30, 2010:





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
                    
                    
                    
                    2.25
                    
                    
                    $
                    0.10
                    
                    
                    
                    1,000,000
                    
                    
                    $
                    0.10





Transactions
involving options issued to non-employees are summarized as
follows:




Number of
                        Options
                      
                      
                      Weighted
                        Average
                        Exercise
                        Price per
                        Share
                      
                      
                      Intrinsic
                        ValueOutstanding,
      September  30, 2009
                      
                      
                      1,000,000
                      
                      
                      
                      0.10
                      
                      
                      $
                      0.00GrantedExercised
                      
                      
                      -
                      
                      
                      
                      -Canceled
      or expired
                      
                      
                      -
                      
                      
                      
                      -Outstanding,
      June 30, 2010
                      
                      
                      1,000,000
                      
                      
                      $
                      0.10
                      
                      
                      
                      0.00Exercisable,
      June 30, 2010
                      
                      
                      1,000,000
                      
                      
                      $
                      0.10


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 June 30, 2010:





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
                    
                    
                    
                    1.19
                    
                    
                    $
                    0.30
                    
                    
                    
                    100,000
                    
                    
                    $
                    0.30


F-15


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
H - STOCK OPTIONS AND WARRANTS (continued)




Transactions
involving warrants are summarized as follows:





Number of
                    Warrants
                  
                  
                  Weighted
                    Average
                    Exercise
                    Price per
                    ShareOutstanding,
      September  30, 2009
                  
                  
                  100,000
                  
                  
                  $
                  0.30Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
      or expired
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      June 30, 2010
                  
                  
                  100,000
                  
                  
                  $
                  0.30





NOTE
I - 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
beneficiary under ASC 810-10 since JCMD does not have sufficient equity at risk
for the entity to finance its activities.





ASC
810-10 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 consolidated JCMD as a VIE, regardless of
the Company not having an equity interest in JCMD.





Included
in the Company's unaudited condensed consolidated balance sheets at June
30, 2010 and September 30, 2009 are the following net assets of
JCMD:


F-16


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
I - CONSOLIDATION OF VARIABLE INTEREST ENTITIES (continued)





June  30,
                    2010
                  
                  
                  September 30,
                    2009ASSETS
      (JCMD)Cash
      and cash equivalents
                  
                  $
                  755
                  
                  
                  $
                  17,616Accounts
      receivable, prepaid expenses and other current assets
                  
                  
                  80,000
                  
                  
                  
                  19,400Total
      current assets
                  
                  
                  80,755
                  
                  
                  
                  37,016Property,
      plant and equipment, net
                  
                  
                  1,237,223
                  
                  
                  
                  1,241,824Total
      assets
                  
                  
                  1,317,978
                  
                  
                  
                  1,278,840LIABILITIES:Current
      portion of long term debt
                  
                  
                  1,208,152
                  
                  
                  
                  1,235,015Accounts
      payable and accrued liabilities
                  
                  
                  161,035
                  
                  
                  
                  82,075Total
      current liabilities
                  
                  
                  1,369,187
                  
                  
                  
                  1,317,090Long
      term debt
                  
                  
                  
                  
                  
                  
                  -Total
      liabilities
                  
                  
                  1,369,187
                  
                  
                  
                  1,317,090Net
      assets
                  
                  $
                  (51,209
                  )
                  
                  $
                  (38,250
                  )1,317,978
                  
                  
                  
                  1,278,840





Consolidated
results of operations include the following for the three months ended June 30,
2010 and 2009:





June 30,
                        2010
                      
                      
                      June 30,
                        2009Revenues
                      
                      $
                      51,000
                      
                      
                      $
                      42,505Cost
      and expenses - real estate: Operating expenses
                      
                      
                      4,099Depreciation
                      
                      
                      8,001
                      
                      
                      
                      8,000Interest,
      net
                      
                      
                      33,065
                      
                      
                      
                      34,505Total
      costs and expenses
                      
                      
                      45,165
                      
                      
                      
                      42,505Operating
      income -Real estate
                      
                      $
                      5,835
                      
                      
                      $





Consolidated
results of operations include the following for the nine months ended June 30,
2010 and 2009:





June 30,
                        2010
                      
                      
                      June 30,
                        2009Revenues
                      
                      $
                      119,000
                      
                      
                      $
                      125,827Cost
      and expenses - real estate: Operating expenses
                      
                      
                      13,743
                      
                      
                      
                      5,726Depreciation
                      
                      
                      24,001
                      
                      
                      
                      24,000Interest,
      net
                      
                      
                      94,215
                      
                      
                      
                      145,120Total
      costs and expenses
                      
                      
                      131,959
                      
                      
                      
                      174,846Operating
      loss-Real estate
                      
                      $
                      (12,959)
                      
                      
                      $
                      (49,019
                      )


During
the three months ended June 30, 2010 and 2009, JCMD Properties LLC made no
distributions; during the nine months ended June 30, 2010 and 2009, JCMD
Properties LLC issued cash distributions to its members totaling $-0- and
$90,000, respectively.


F-17


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
J - DERIVATIVE FINANCIAL INSTRUMENTS





The
Company periodically uses foreign exchange contracts for trading purposes. The
Company's short term foreign currency contracts subject the Company to risk due
to foreign exchange rate fluctuations, because gains and losses on these
instruments may have significant impact on the results of
operations.





NOTE
K - FAIR VALUE OF FINANCIAL INSTRUMENTS





ASC
825-10 defines fair value as the price that would be received from selling an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. When determining the fair value
measurements for assets and liabilities required or permitted to be recorded at
fair value, the Company considers the principal or most advantageous market in
which it would transact and considers assumptions that market participants would
use when pricing the asset or liability, such as inherent risk, transfer
restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value
hierarchy that requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. ASC 825-10
establishes three levels of inputs that may be used to measure fair
value:





Level
1 - Quoted prices in active markets for identical assets or
liabilities.





Level 2 -
Observable inputs other than Level 1 prices such as quoted prices for similar
assets or liabilities; quoted prices in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which all significant inputs are observable or can be derived principally from
or corroborated by observable market data for substantially the full term of the
assets or liabilities.





Level 3 -
Unobservable inputs to the valuation methodology that are significant to the
measurement of fair value of assets or liabilities.





To the
extent that valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more
judgment. In certain cases, the inputs used to measure fair value may fall into
different levels of the fair value hierarchy. In such cases, for disclosure
purposes, the level in the fair value hierarchy within which the fair value
measurement is disclosed is determined based on the lowest level input that is
significant to the fair value measurement.




Items
recorded or measured at fair value on a recurring basis in the
accompanying financial statements consisted of the following items as of
June 30, 2010:


F-18


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




Fair Value Measurements at June
      30, 2010 using:June 30,
                          2010
                        
                        
                        Quoted Prices
                          in Active
                          Markets for
                          Identical
                          Assets
                          (Level 1)
                        
                        
                        Significant
                          Other
                          Observable
                          Inputs (Level 2)
                        
                        
                        Significant
                          Unobservable
                          Inputs
                          (Level 3)Liabilities:Interest
      rate swap
                        
                        $
                        98,057
                        
                        
                        
                        
                        
                        $
                        98,057
                        
                        
                        $Derivative
      liability
                        
                        
                        1,021,292
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        1,021,292





The
following table provides a summary of changes in fair value of the Company’s
Level 2 financial liabilities as of June 30, 2010 (in thousands):




Interest
                    Rate Swap
                  
                  
                  Derivative
                    LiabilityBalance,
      October 1, 2009
                  
                  $
                  82,075
                  
                  
                  $
                  1,971,115Change
      in fair value at June 30, 2010
                  
                  
                  15,982
                  
                  
                  
                  (949,823
                  )Balance,
      June 30, 2010
                  
                  $
                  98,057
                  
                  
                  $
                  1,021,292





Level 3
Liabilities comprised of our bifurcated reset provision contained within our
Series A stock and the fair value of issued reset provisions.





NOTE
L – DISCONTINUED OPERATIONS





On
January 1, 2010, the Company discontinued operations in Munich, Germany under
its wholly owned subsidiary; MW Global Limited which owns 100% of the
outstanding ownership and economic interest in Modelworxx GmbH.  The
financial results of MW Global are presented separately in the consolidated
income statements as discontinued operations for all periods
presented.





The
assets and liabilities of the discontinued operations as of June 30, 2010 and
September 30, 2009 were as follows:




Assets:


As
      of
                  
                  
                  As
      ofJune 30,
                    2010
                  
                  
                  September 30,
                    2009Cash
                  
                  $
                  -
                  
                  
                  $
                  943Accounts
      receivable
                  
                  
                  -
                  
                  
                  
                  107,585Inventories
                  
                  
                  -
                  
                  
                  
                  72,835Prepaid
      expenses and other assets
                  
                  
                  -
                  
                  
                  
                  3,470Property,
      plant and equipment, net
                  
                  
                  -
                  
                  
                  
                  178,352Assets
      of discontinued operations
                  
                  $
                  -
                  
                  
                  $
                  363,185


F-19


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
L – DISCONTINUED OPERATIONS (continued)





Liabilities:





June 30,
                    2010
                  
                  
                  September 30,
                    2009Accounts
      payable
                  
                  $
                  492,006
                  
                  
                  $
                  445,621Line
      of credit
                  
                  
                  -
                  
                  
                  
                  18,608Liabilities
      of discontinued operations
                  
                  $
                  492,006
                  
                  
                  $
                  464,229





The
Results of Operations for the three month periods ended June 30, 2010 and 2009
are as follows:





June 30,
                    2010
                  
                  
                  June 30,
                    2009Sales
                  
                  $
                  -
                  
                  
                  $
                  177,119Cost
      of sales
                  
                  
                  -
                  
                  
                  
                  160,025Gross
      profit
                  
                  
                  -
                  
                  
                  
                  17,094Operating
      expenses:Selling,
      general and administrative
                  
                  
                  -
                  
                  
                  
                  153,457Depreciation
      and amortization
                  
                  
                  -
                  
                  
                  
                  10,870Total
      operating costs
                  
                  
                  -
                  
                  
                  
                  164,327Net
      loss from operations
                  
                  
                  -
                  
                  
                  
                  (147,233
                  )Other
      (loss) income
                  
                  
                  (27,789
                  )
                  
                  
                  3,446Net
      loss
                  
                  $
                  (27,789
                  )
                  
                  $
                  (143,787
                  )





The
Results of Operations for the nine month periods ended June 30, 2010 and 2009
are as follows:





June 30,
                    2010
                  
                  
                  June 30,
                    2009Sales
                  
                  $
                  316,110
                  
                  
                  $
                  492,976Cost
      of sales
                  
                  
                  266,556
                  
                  
                  
                  601,596Gross
      profit (loss)
                  
                  
                  49,554
                  
                  
                  
                  (108,620
                  )Operating
      expenses:Selling,
      general and administrative
                  
                  
                  153,543
                  
                  
                  
                  449,849Depreciation
      and amortization
                  
                  
                  11,639
                  
                  
                  
                  31,320Total
      operating costs
                  
                  
                  165,182
                  
                  
                  
                  481,169Net
      loss from operations
                  
                  
                  (115,628
                  )
                  
                  
                  (589,789
                  )Other
      (loss) income
                  
                  
                  (289,389
                  )
                  
                  
                  10,408Net
      loss
                  
                  $
                  (405,017
                  )
                  
                  $
                  (579,381
                  )


F-20


MARKETING
WORLDWIDE CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
M – SUBSEQUENT EVENTS





On July
26, 2010, the Company entered into an Equity Credit Agreement (the “Agreement”)
with Southridge Partners II, LP (“Investor”), whereby the Company shall sell up
to $5,000,000 of the Company’s common stock for a period up to twenty four
months following effectiveness of a registration statement for the Company’s
common stock. Under the Agreement, the Company may deliver put notices to
require the Investor to purchase common stock up to the lesser of (a) $150,000
or (b) 500% of the average dollar volume for the twenty trading days immediately
preceding the put date. The purchase price for each put is 90% of the market
price for the Company’s common stock (defined under the Agreement as the average
of the lowest two closing bid prices during the five trading days following
delivery of a put notice, subject to adjustment for certain “valuation events,”
such as a stock split or issuance of stock lower than the closing bid price
currently in effect. The investment amount for each put is subject to adjustment
in the event that the closing bid price for any trading day during a Valuation
Period falls below a “floor price” of 70% of the average of the closing bid
prices for the three trading days ending immediately prior to a put
date.





In
connection with the Agreement, the Company issued the Investor a warrant to
purchase up to 5,000,000 shares of the Company’s common stock at an original
exercise price of $.001 or par value, whichever is lower. The Warrant is subject
to adjustment for certain events such as such stock dividends and splits or
certain dilutive issuances of securities by the Company.





The
Company also entered into a Registration Rights Agreement with the Investor for
registration of the resale of the shares underlying the Agreement and the
Warrant. As set forth above, the Company’s right to make a put under the
Agreement is subject to an effective registration statement with the Securities
and Exchange Commission covering the resale of the shares. Except as otherwise
provided in the transaction documents, the amount of common shares the Investor
may purchase under the Agreement or exercise under the warrant, may not be an
amount which would cause the Investor’s (and its affiliates) total beneficial
ownership of the Company’s common stock to exceed 4.99% of the Company’s
outstanding common stock.





Other
than with respect to the Agreement, there is no material relationship between
the Company and the Investor, or affiliates of either party.


F-21


ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





THIS
REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS 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 (“MWW” or the "Company"), 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.





Since its
inception, the continuously increasing demand for the Company's products and
services has prompted 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.


Page
2




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's Scion Group, KIA Motors America, MOBIS (KIA and Hyundai Worldwide)
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. 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.





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. 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.





CORPORATE
DEVELOPMENTS





On August
31, 2009, Marketing Worldwide, LLC entered into a financing agreement with
Summit Financial Resources L.P. (Summit) for a maximum borrowing of up to
$750,000 maturing August 31, 2010. The arrangement is based on recourse
factoring of the Company’s accounts receivables. Substantially all assets of
Marketing Worldwide, LLC have been pledged as collateral for the Summit
facility. Marketing Worldwide Corp., has guaranteed the financing
arrangement.




Under the
arrangement, Summit typically advances to the Company 85% of the total amount of
accounts receivable factored. Summit retains 15% of the outstanding factored
accounts receivable as a reserve, which it holds until the customer pays the
factored invoice to Summit. The cost of funds for the accounts receivable
portion of the borrowings with Summit includes: (a) a collateral management fee
of 0.65% of the face amount of factored accounts receivable for each period of
fifteen days, or portion thereof, that the factored accounts receivable remains
outstanding until payment in full is applied and (b) interest charged at the
Wall Street Journal prime rate plus 1% divided by 360.  The Summit
default rate is the Wall Street Journal prime rate plus 10%. The Company may be
obligated to purchase the receivable back from Summit at the end of 90
days.





In
September 2009, Marketing Worldwide, LLC entered  into an addendum
which increased the maximum borrowing amount to $1,000,000.





In
February, 2010, Modelworxx GmbH filed for insolvency.  The final
resolution of this matter has not been determined yet.  The Company
estimated the financial impact of this filing and included the impact in the
financial statements as loss from discontinued operations.


Page
3


On July
26, 2010, the Company entered into an Equity Credit Agreement (the “Agreement”)
with Southridge Partners II, LP (“Investor”), whereby the Company shall sell up
to $5,000,000 of the Company’s common stock for a period up to twenty four
months following effectiveness of a registration statement for the Company’s
common stock. Under the Agreement, the Company may deliver put notices to
require the Investor to purchase common stock up to the lesser of (a) $150,000
or (b) 500% of the average dollar volume for the twenty trading days immediately
preceding the put date. The purchase price for each put is 90% of the market
price for the Company’s common stock (defined under the Agreement as the average
of the lowest two closing bid prices during the five trading days following
delivery of a put notice, subject to adjustment for certain “valuation events,”
such as a stock split or issuance of stock lower than the closing bid price
currently in effect. The investment amount for each put is subject to adjustment
in the event that the closing bid price for any trading day during a Valuation
Period falls below a “floor price” of 70% of the average of the closing bid
prices for the three trading days ending immediately prior to a put
date.





In
connection with the Agreement, the Company issued the Investor a warrant to
purchase up to 5,000,000 shares of the Company’s common stock at an original
exercise price of $.001 or par value, whichever is lower. The Warrant is subject
to adjustment for certain events such as such stock dividends and splits or
certain dilutive issuances of securities by the Company.





The
Company also entered into a Registration Rights Agreement with the Investor for
registration of the resale of the shares underlying the Agreement and the
Warrant. As set forth above, the Company’s right to make a put under the
Agreement is subject to an effective registration statement with the Securities
and Exchange Commission covering the resale of the shares. Except as otherwise
provided in the transaction documents, the amount of common shares the Investor
may purchase under the Agreement or exercise under the warrant, may not be an
amount which would cause the Investor’s (and its affiliates) total beneficial
ownership of the Company’s common stock to exceed 4.99% of the Company’s
outstanding common stock.





Other
than with respect to the Agreement, there is no material relationship between
the Company and the Investor, or affiliates of either party.





LIQUIDITY
AND CAPITAL RESOURCES





OPERATING
ACTIVITIES. During the nine months ended June 30, 2010, we provided $394,075 of
cash flow in operations primarily from our net loss of $1,335,498; offset by non
cash depreciation and amortization charges of $430,170, non cash change in fair
value of derivative liability of $(949,823), and essentially an increase in
liabilities in excess of the decrease in total assets. .





INVESTING
ACTIVITIES. During the nine months ended June 30 2010, net cash provided from
investing was from discontinued operations of $149,002, netted with property
plant and equipment purchased of $47,123.





FINANCING
ACTIVITIES. During the nine months ended June 30, 2010, net cash flow used in
financing activities amounted to $544,416. The net cash flow was used to pay
down our credit line of $476,474 and   our notes and leases
payable by $92,942, net with borrowing on a demand convertible note of
$25,000.





MWW
expects its regular capital expenditures to be approximately $160,000 for fiscal
2010. Further, MWW expects approximately $140,000 in additional capital
expenditures during fiscal 2010. These anticipated expenditures are for
continued investments in property, tooling, and equipment used in our
business.





The
independent auditors report on our September 30, 2009 financial statements
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 consolidated financial
statements do not include any adjustments that might result should the Company
be unable to continue as a going concern.


Page
4


The
Company has reduced cash required for operations by reducing operating costs and
reducing staff levels. In addition, the Company is working to manage its current
liabilities while it continues to make changes in operations to improve its cash
flow and liquidity position.





The
Company's existence is dependent upon management's ability to develop profitable
operations. In addition, at June 30, 2010, the Company was in default on certain
secured credit facilities.





As
of June 30, 2010, we had a working capital deficit of approximately
$4,177,350.





RESULTS
OF OPERATIONS





COMPARISON
OF THREE MONTHS ENDED JUNE 30, 2010 TO THE THREE MONTHS ENDED JUNE 30,
2009.





SALES.
Net sales during the third quarter 2010 (three months ending June 30, 2010) were
$1,051,495 an increase of $217,089, or 26.0 %, compared to $834,406 during the
third quarter 2009. This increase was due to an increase in sales of certain
product categories.





GROSS
MARGINS. Gross margins for the second quarter 2010 decreased to 44.7 % from
53.8 % in the same period of 2009 due to higher costs in the
period.





OPERATING
EXPENSES





SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES.





Selling,
general and administrative expenses increased by $393 to $732,102 in the third
quarter of 2010, compared to $731,709 in the third quarter of 2009.





OPERATING
(LOSS). Operating loss decreased by $25,214 to a loss of ($261,926) in the third
quarter of 2010, compared to a net operating loss of ($287,140) in the third
quarter of 2009. This decrease was primarily attributable higher sales
volume.





FINANCING
EXPENSE. For the three months ended June 30, 2010, our financing expense
increased to $84,367 from $33,382, an increase of 153 % over the same period
prior year. The increase was primarily related to the mark to market adjustment
to our interest swap agreement associated with the JCMD Properties, LLC
mortgages and higher costs of borrowing.





GAIN ON
CHANGE IN FAIR VALUE OF DERVIATIVE LIABILITY.   As described in
our accompanying financial statements, our Series A Preferred Stock has certain
reset provisions.  On October 1, 2009 in accordance with Accounting
Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in
Entity’s Own Equity (“ASC 815-40”) we recorded the initial fair value of the
reset provision as a liability with an offset to equity and subsequently mark to
market the reset provision liability at each reporting cycle.





At June
30, 2010, the reset provision liability fair value decreased from $2,015,310 at
March 31, 2010 to $1,021,292 resulting in a noncash income to current period
operations of $994,018.  The decline in the market price of our common
stock has affected the fair value of the reset provision liability.





NET
INCOME increased by $1,161,223 to income of $642,628 from a loss of ($518,595).
The increase was primarily attributed to the gain on the change of fair value of
the derivative liability during the three months ended June 30,
2010.


Page
5


COMPARISON
OF NINE MONTHS ENDED JUNE 30, 2010 TO THE NINE MONTHS ENDED JUNE 30,
2009.





SALES.
Net sales during the nine month period ended June 30, 2010 were $3,223,922 an
increase of $682,835, or 26.9 %, compared to $2,541,087 during the same period
last year. This increase was due to an increase in sales of certain product
categories.





GROSS
MARGINS. Gross margins for the nine months ended June 30, 2010
decreased  to 35.8% from 43.6 % in the same period of 2009 due to
higher costs of materials.





OPERATING
EXPENSES





SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES.





Selling,
general and administrative expenses increased by $363,614 to $2,839,603 during
the nine month period ended June 30, 2010, compared to $2,475,989 in the same
period last year. The increase was attributable to equity based compensation
paid in 2010 of $434,250 to consultants and service providers.





OPERATING
(LOSS). Operating loss increased by $318,221 to a loss of ($1,686,797) during
the first nine months of  2010, compared to a net operating loss of
($1,368,576) in the same period last year. This increase was
primarily attributable to equity based compensation paid to service
providers in 2010 and higher costs of materials.





FINANCING
EXPENSE. For the nine months ended June 30, 2010, our financing expense
increased to $290,208 from $214,857, an increase of 35 % over the same period
prior year. The increase was primarily related to the mark to market adjustment
to our interest swap agreement associated with the JCMD Properties, LLC
mortgages and higher costs of borrowing.





GAIN ON
CHANGE IN FAIR VALUE OF DERVIATIVE LIABILITY.   As described in
our accompanying financial statements, our Series A Preferred Stock has certain
reset provisions.  On October 1, 2009; in accordance with Accounting
Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in
Entity’s Own Equity (“ASC 815-40”) we  record the initial fair value
of the reset provision as a liability with an offset to equity  and
subsequently mark to market the reset provision liability at each reporting
cycle.





At June
30, 2010, the reset provision liability fair value decreased from $1,971,115 at
October 1, 2009 to $1,021,292 resulting in a noncash gain to current period
operations of $949,823.





NET LOSS
decreased by $738,836 to a loss of ($1,571,748) from a loss of
($2,310,584).





CRITICAL
ACCOUNTING POLICIES





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
judgments that affect our reported assets, liabilities, revenues, and expenses
and the disclosure of contingent assets and liabilities. We base our estimates
and judgments on historical experience and on various others assumptions we
believe to be reasonable under the circumstances. Future events, however, may
differ markedly from our current expectations and assumptions.  While
there are a number of significant accounting policies affecting our consolidated
financial statements; we believe the following critical accounting policies
involve the most complex, difficult and subjective estimates and
judgments:





o
            Accounting for variable interest
      entities


o
            Revenue
      recognition


o
            Inventories


o
            Allowance for doubtful
      accounts


o
            Stock based
      compensation


o
            Derivative
      liability


Page
6





ACCOUNTING
FOR VARIABLE INTEREST ENTITIES





Accounting
Standards Codification subtopic 810-10, Consolidation (“ASC 810-10”) discusses
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. ASC 810-10 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
ASC 810-10.  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 Accounting Standards Codification subtopic 605-10, Revenue Recognition
(“ASC 605-10”).  ASC 605-10 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 has been rendered or no refund will be required.




ASC
605-10 incorporates Accounting Standards Codification subtopic 605-25,
Multiple-Element Arrangements (“ASC 605-25”).  ASC 605-25 addresses
accounting for arrangements that may involve the delivery or performance of
multiple products, services and/or rights to use assets.  The effect
of implementing 605-25 on the Company’s financial position and results of
operations was not significant.




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.


Page
7


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
are 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 collectability 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 collectability 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. The allowance for doubtful
accounts was $19,751 and $131,458 at June 30, 2010  and at September
30, 2009, respectively.




STOCK-BASED
COMPENSATION





The
Company has adopted the fair value provisions for share-based awards pursuant to
ASC 718-10, 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 ASC 718-10,
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 ASC 718-10, all recognized on a straight line basis as the
requisite service periods are rendered.





DERIVATIVE
LIABILTY





Accounting
Standards Codification subtopic 815-40, Derivatives and Hedging,; Contracts in
Entity’s own Equity (“ASC 815-40”) became effective for the Company on January
1, 2010.  The Company’s Series A Preferred Stock has reset provisions
to the exercise price if the Company issues equity at a price less than the
exercise prices.  Upon the effective date, the provisions of ASC
815-40 required a reclassification to liability based on the reset feature of
the agreements if the Company sells equity at a price below the exercise price
of the Series A Preferred Stock.


Page
8


We have
identified the policies discussed 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.





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





a)
Evaluation of Disclosure Controls and Procedures. As of June 30, 2010, 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 on the evaluation of
these disclosure controls and procedures, and in light of the material
weaknesses previously found in our internal controls, the Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were not effective.





b)
Changes in internal controls. 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.





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 5.
OTHER INFORMATION





None.


Page
9


ITEM 6.
EXHIBITS





(a)
EXHIBIT(S) DESCRIPTION





(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.


Page
10





*******
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.





(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





SIGNATURES





Pursuant
to the requirements of section 13 or 15(d) 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 CORPORATIONBY:
              /s/ MICHAEL WINZKOWSKINAME:
      MICHAEL WINZKOWSKITITLE:
      CHIEF EXECUTIVE OFFICERDate:
      August 17, 2010





Pursuant
to requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





BY:
              /s/ MICHAEL WINZKOWSKINAME:
      MICHAEL WINZKOWSKITITLE:
      CHIEF EXECUTIVE OFFICER,SECRETARY
      AND DIRECTORDate:
      August 17, 2010BY:
              /s/ JAMES E. DAVISNAME:
      JAMES E. DAVISTITLE:
      CHIEF FINANCIAL OFFICERAND
      DIRECTORDate:
      August 17, 2010


Page
12