UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2003

                         Commission File Number 0-21989

                        Medialink Worldwide Incorporated
                        --------------------------------
             (Exact name of registrant as specified in its charter)

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

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

                                 (212) 682-8300
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

    Title of each class                Name of each exchange on which registered
    -------------------                -----------------------------------------
Common Stock-$.01 par value                   National Market System of NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes _X_ No __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes __ No _X_

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant amounted to $14,502,307,  computed by reference to the price at which
the  voting  common  stock  was  last  sold as of the last  business  day of the
registrant's most recently completed second quarter.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common  stock,  as of the close of business on March 26,  2004:  Common  Stock -
5,983,049.


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Definitive  Proxy  Statement  for the 2004 Annual
Meeting of  Stockholders,  to be held on June 10, 2004, to be filed  pursuant to
Regulation 14A within 120 days after the Registrant's fiscal year ended December
31, 2003 are  incorporated  by reference in Part II, Item 5 and Part III of this
report.

<PAGE>

                        MEDIALINK WORLDWIDE INCORPORATED

                                    FORM 10-K

                          YEAR ENDED DECEMBER 31, 2003

                                TABLE OF CONTENTS

                                                                            Page
PART I
Item 1.              Business                                                 2
Item 2.              Properties                                               9
Item 3.              Legal Proceedings                                        9
Item 4.              Submission of Matters to a Vote of Security Holders      9

PART II
Item 5.              Market for the Registrant's Common Equity, Related
                        Stockholder Matters and Issuer Purchases of Equity
                        Securities                                           10
Item 6.              Selected Financial Data                                 11
Item 7.              Management's Discussion and Analysis of Financial
                        Condition and Results of Operations                  12
Item 7A.             Quantitative and Qualitative Disclosures About Market
                        Risk                                                 24
Item 8.              Financial Statements and Supplementary Data             25
Item 9.              Changes in and Disagreements With Accountants
                        On Accounting and Financial Disclosure               26
Item 9A.             Controls and Procedures                                 26

PART III
Item 10.             Directors and Executive Officers of the Registrant      26
Item 11.             Executive Compensation                                  26
Item 12.             Security Ownership of Certain Beneficial Owners
                        and Management                                       26
Item 13.             Certain Relationships and Related Transactions          26
Item 14.             Principal Accountant Fees and Services                  27

PART IV
Item 15.             Exhibits, Financial Statement Schedules, and Reports
                        on Form 8-K                                          27

SIGNATURES           Chief Executive Officer, President and Chief Financial
                     Officer

                     Directors

Reports of Independent
Auditors                                                                    F-1

Financial Statements                                                        F-3


<PAGE>

FORWARD LOOKING STATEMENTS

With the exception of the  historical  information  contained in this Form 10-K,
the matters described herein contain certain  "forward-looking  statements" that
are made  pursuant  to the Safe  Harbor  provisions  of the  Private  Securities
Litigation Reform Act of 1995.  Forward-looking statements in this Form 10-K are
not promises or guarantees and are subject to risks and uncertainties that could
cause our actual  results to differ  materially  from those  anticipated.  These
statements  are based on  management's  current  expectations  and are naturally
subject to uncertainty and changes in circumstances. We caution you not to place
undue reliance upon any such forward-looking statements,  which speak only as of
the date made.  Actual  results  may vary  materially  from those  expressed  or
implied by the  statements  herein.  Such  statements  may  relate,  among other
things,  to our ability to respond to economic  changes and improve  operational
efficiency, the benefits of our products to be realized by our customers, or our
plans, objectives, and expected financial and operating results. Forward-looking
statements  may also include,  without  limitation,  any  statement  relating to
future  events,  conditions  or  circumstances  or using  words  such as:  will,
believe,  anticipate,  expect,  could, may, estimate,  project,  plan,  predict,
intend or similar expressions that involve risk or uncertainty.  These risks and
uncertainties  include,  among other things,  our recent history of losses;  our
ability to achieve  or  maintain  profitability;  worldwide  economic  weakness;
geopolitical conditions and continued threats of terrorism; effectiveness of our
cost  reduction  programs;  our  ability  to  develop  new  services  and market
acceptance of such services, such as Teletrax(TM);  the volume and importance of
breaking  news which can have the effect of crowding  out the content we produce
and  deliver to  broadcast  outlets  on behalf of our  clients;  our  ability to
develop new products and services that keep pace with technology; our ability to
develop  and  maintain  successful  relationships  with  critical  vendors;  the
potential  negative  effects of our  international  operations  on the  Company;
future  acquisitions  or  divestitures  may adversely  affect our operations and
financial results; the absence of long term contract with customers and vendors;
and increased competition may have an adverse effect on pricing, revenues, gross
margins  and our  customer  base.  More  detailed  information  about these risk
factors is set forth in filings by  Medialink  Worldwide  Incorporated  with the
Securities  and  Exchange  Commission,   including  the  Company's  registration
statement,  most  recent  quarterly  report on Form  10-Q,  and  other  publicly
available information regarding the Company. Medialink Worldwide Incorporated is
under no obligation to (and expressly  disclaims any such  obligation to) update
or alter its forward-looking  statements whether as a result of new information,
future events or otherwise.

ITEM 1.  BUSINESS.

GENERAL

Medialink Worldwide Incorporated ("Medialink") is the leading global provider of
creative  and  distribution  services to  corporations  and other  organizations
seeking to  communicate  with the public  through the news media.  Medialink  is
based in New York, with offices in the United States and an international hub in
London.  The Company uniquely blends its creative and production  expertise with
established  news  media  credibility,   proprietary  databases,  an  electronic
distribution infrastructure and the first truly global electronic video tracking
solution  to provide  its clients  with the  ability to create,  distribute  and
measure their  communications.  Medialink is a publicly traded company  (Nasdaq:
MDLK).

Medialink  offers the counsel,  skills and  infrastructure  to reach  television
viewers, radio listeners, newspaper readers and Internet users through newscasts
or news  columns.  The  Company  also tracks and  measures  the impact of client
communications  across all major media.  Clients  ranging from General Motors to
General Mills, Siemens to Symbol Technologies rely on Medialink to generate news


                                       2
<PAGE>

coverage of their new products,  innovations,  mergers,  acquisitions  and other
corporate initiatives and then to determine the value of that media exposure.

For  example,  when the  European  Space  Agency  (ESA)  wanted to raise  public
awareness of its Mars Express space mission prior to the projected Christmas Day
arrival on the planet,  Medialink  created and  distributed a video news package
that  captured  worldwide  attention in dozens of countries  throughout  Europe,
China,  the Middle East and the United States.  In addition,  within 24 hours of
the reopening of Baghdad  International  Airport and  immediately  following the
fall of Baghdad,  Medialink scheduled and produced two groups of live interviews
for  Science  Applications  International  Corporation  on behalf of the  United
States Air Force (USAF).  The satellite  interviews  originated  from Kuwait and
Qatar between active duty USAF pilots and major market U.S. television stations,
and helped  Americans to  understand  the role of the Air Force  during  pivotal
events in the war in Iraq.

In another  example,  when cosmetics  giant Mary Kay Inc.  wanted to promote the
40th  anniversary  of its founding,  Medialink  provided  television,  print and
Internet newsrooms with video and still photos of events from the celebration in
Dallas.  Morgan Stanley employed  Medialink's  radio production and distribution
service as a means to educate listeners  regarding  personal finance issues on a
weekly  basis.  Organizations  and  government  agencies,  such as the  National
Association  of Realtors and the U.S.  Department  of Energy,  commonly  rely on
Medialink's U.S. Newswire division to provide  electronic  distribution of press
releases and related materials to the news media.

By leveraging  relationships with news  organizations,  Medialink rapidly alerts
and  disseminates  clients' news to every major  newsroom in the United  States.
Similarly,  international  distribution  relationships enable Medialink to reach
virtually  any  audience,  in any country,  through any news medium.  Each year,
Medialink  generates  tens of  thousands of  broadcast  news  airings  worldwide
reaching billions of viewers,  listeners and readers on media as diverse as CNN,
The New York Times,  ABC, Sky News, The Washington  Post, BBC,  Bloomberg Radio,
AOL, Yahoo! and China Central Television, the national television station of the
People's  Republic of China. For example,  1.2 billion viewers worldwide saw the
video of ESA's Mars Express mission.

Medialink works with clients to create communications programs designed to reach
audiences  primarily  through  its unique  links to the media.  On behalf of its
clients,  Medialink creates and distributes news to broadcast,  print and online
newsrooms  around the world,  for their free and  unrestricted  use.  Unlike its
competitors,   Medialink  combines  this  content  production  and  distribution
expertise with complete qualitative and quantitative  communications monitoring,
research and analysis services. For FedEx, Medialink aggregates and analyzes the
company's media coverage on three continents, producing reports that measure the
value of the  exposure  and often prove the  superior  return on  investment  of
public relations over advertising.

Clients use Medialink because of its cost-effective  and comprehensive  array of
services,   the  extensive  depth  and  breadth  of  its  distribution  and  its
long-established reputation as a trusted advisor. The Company's proprietary news
collection  and  analytics  capabilities  provide  it with  powerful,  exclusive
advantages in measuring client communications.

The  Company's  success is apparent in its rich and diverse  client base,  which
includes  Accenture,  Altria Group,  American  Association for Retired  Persons,
AT&T, Bayer, DIAGEO, Disney, European Space Agency, Ford, GE Financial,  General
Motors,  GlaxoSmithKline,  Intel, Jaguar, Miramax,  McDonald's,  Morgan Stanley,
Nasdaq, National Association of Realtors, Royal Philips Electronics, Siemens and
Visa  International.  Clients also include  virtually every major PR firm in the
United States and the United Kingdom.


                                       3
<PAGE>

In  2003,  the  Company  expanded  the  monitoring  network  of its  subsidiary,
Teletrax(TM),  the broadcast  industry's first global digital video watermarking
and tracking solution,  into the U.S. marketplace following its formal launch in
Europe in 2002. Initial clients include Reuters Television and NBC News Channel,
which entered into  multi-year  agreements to utilize this unique  content asset
management tool to track and monitor the usage of their video content.  In 2004,
Teletrax(TM) reached additional agreements with Tribune Entertainment, Universal
Domestic  Television,  Media  Review  International  and  Internet  Broadcasting
Systems.  Medialink also uses the  Teletrax(TM)  system to track and monitor the
worldwide  usage of its client video  distributed  by the Company.  Teletrax(TM)
offers Medialink the potential new revenue sources outside of its core broadcast
services,  such  as  copyright  management,   advertising  proof-of-performance,
sponsorship  evaluation,  verification  of airings for  network  and  syndicated
programming, and intellectual property rights management.

STRATEGY

From its inception, the Company has been at the vanguard as public relations has
evolved from being  print-focused  to embracing  video,  audio and the Internet.
Medialink's  strategy is to enable its clients to  effectively  and  efficiently
communicate news to audiences through all mediums. The Company achieves this by:
(i) creating and producing compelling content; (ii) distributing content through
the  Company's   unmatched   infrastructure;   (iii)   monitoring   distribution
effectiveness and providing analytical  feedback;  and (iv) providing customized
research to gauge the effectiveness of clients' communications efforts.
The  Company  believes  it is the  market  share  leader in each of its  primary
service offerings.  Medialink has identified several avenues that should further
support the Company's growth,  including:  (i) leveraging  client  relationships
through  cross-marketing;  (ii) developing new products and services;  and (iii)
broadening the sales force and client base.

Operational Overview

Medialink  offers its  comprehensive  range of services  through  the  following
divisions:

Media Communications Services

    Broadcast  Services  Group  ("BSG")--Through  BSG, the Company  provides its
    content  creation,   production,   distribution  and  electronic   broadcast
    monitoring  services.  BSG's principal  products and services  include video
    news  releases,  live event  broadcasts  (including  satellite  media tours,
    videoconferences and webcasting), audio news releases and radio media tours,
    in formats that are suitable for all broadcast news media.  BSG  distributes
    its clients' news stories directly to targeted television and radio, through
    its  comprehensive   distribution   platform,   and  on-line  media  outlets
    worldwide, through Newstream.com,  its joint venture with Business Wire. BSG
    also  monitors and  statistically  analyzes  the extent to which  content is
    aired,  thereby providing  valuable  feedback to the client.  BSG utilizes a
    variety of methods to track and monitor video usage, including its exclusive
    offering of Teletrax(TM), providing it with the only truly global electronic
    video tracking solution.

    U.S.  Newswire  ("USN")--USN  is a leading  press  release  wire service for
    domestic  governmental,  public  affairs and  non-profit  organization  news
    sources.  Its  clients  rely on it to  provide  immediate  and  simultaneous
    electronic  distribution of their news releases,  media advisories and press
    statements  to the  media  and  on-line  services  worldwide.  The  division
    distributes news releases via a direct wire service feed, as well as through
    e-mail,  satellite,  the Internet and broadcast fax. USN also provides still
    photography services.


                                       4
<PAGE>

Media Research Services

    Delahaye  Medialink--This  division is a global leader in providing analysis
    of public  relations  and corporate  communications  activities on behalf of
    corporate and other clients.  Delahaye combines qualitative and quantitative
    research  techniques,   proprietary  technologies  and  its  own  media  and
    communications  expertise to help companies and other organizations plan and
    evaluate their internal and external public relations  programs.  Using data
    compiled  from a variety of sources,  including  electronic  monitoring  and
    press clipping  services,  the division  employs  sophisticated  statistical
    analyses  to  measure  the  quality  and  quantity  of the  client's  print,
    broadcast and Internet  news  coverage.  Delahaye  also offers  interpretive
    analyses that can provide:  (i) an overall  appraisal of the  efficiency and
    impact  of a  client's  communications  efforts;  (ii) a  comparison  of the
    client's news coverage  with that of its  competitors;  and (iii) a gauge of
    the client's return on investment for its communications programs.

Video Watermarking Services

    Teletrax(TM)   --Teletrax(TM)  is  the  broadcast  industry's  first  global
    electronic video  watermarking and tracking  solution.  Using  Teletrax(TM),
    owners of video content - the motion picture industry,  news  organizations,
    advertising  agencies,  and program  syndicators  to name a few - "embed" an
    imperceptible  and indelible  digital watermark into their material whenever
    it is edited,  broadcast or  duplicated.  A global  network of decoders,  or
    "detectors,"  then captures every  broadcast  incident of the embedded video
    whether via satellite, cable or terrestrially. The Teletrax(TM) service then
    generates  tracking  reports for the  original  content  owners.  The system
    provides proof of performance  reports and alerts copyright owners instantly
    to any  violations,  even  down  to  single  second  clips.  As a key  asset
    management  tool for content  owners  seeking to protect and leverage  their
    video property,  Teletrax(TM)  will help drive the financial  performance of
    its clients,  enabling them to efficiently  and  effectively  leverage their
    video content.  Teletrax(TM) is built upon Medialink's  extensive monitoring
    network and technology developed by Royal Philips Electronics.

A summary  of the  Company's  operations  by major  geographic  location  are as
follows for the years ended December 31,

<TABLE>
<CAPTION>
                                  2003                             2002                          2001
                                  ----                             ----                          ----

                           US              UK                US             UK             US           UK
                           --              --                --             --             --           --
<S>                    <C>             <C>               <C>            <C>           <C>            <C>
Revenues:
  External clients     $39,594,783     $4,458,801        $40,188,739    $7,175,981    $40,397,272    $8,022,861
  Inter-segment            192,000        249,000            917,000       727,000        330,000       636,000
                      ------------     -----------      ------------    ----------   ------------    ----------
    Total revenues     $39,786,783     $4,707,801        $41,105,739    $7,902,981    $40,067,272    $8,658,861
                        ==========      =========         ==========     =========     ==========     =========

Total assets           $32,987,950     $3,723,935        $37,482,424    $3,599,910    $38,243,355    $2,569,198
                        ==========      =========         ==========     =========     ==========     =========
</TABLE>

Service Offering

Medialink offers clients a unique  combination of creative  content  production,
global media distribution,  research and analysis and video watermarking,  which
enables clients to communicate  their news efficiently and effectively.  Through
its BSG division, the Company provides a complete range of customized production
and distribution  services to corporations and other  organizations to help them
build public recognition, launch new products, manage crisis situations and meet
other   communications   objectives.   Utilizing   its   electronic   monitoring
capabilities,  BSG also  measures  distribution  reach  and  evaluates  results.
Through  Delahaye's  research and analysis,  Medialink helps companies  evaluate
their media  communications  programs and public image. Through USN, the Company
provides  news  release  distribution  for  governmental,   public  affairs  and
non-profit organizations.  Through Teletrax(TM), Medialink offers the only truly
global video  tracking  solution  available to the  broadcast,  advertising  and
entertainment  industries.   Medialink's  ability  to  offer  the  comprehensive
services  that its  clients  demand  makes it the  partner of choice for leading
corporations, organizations and PR firms worldwide.


                                       5
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                     MEDIALINK WORLDWIDE INCORPORATED SERVICE OFFERINGS
-----------------------------------------------------------------------------------------------------------------------
Production and Live Broadcast             Distribution                   Internet                Research/Analysis
-----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                            <C>                          <C>
o   Video and Audio News          o   Video and Audio            o   Cyber Media Tours        o   News Coverage
    Release Production:                News Release                                               Analysis
          Domestic                     Distribution and                                              Media Reputation
         International                 Monitoring:                                                     Index (MRi)
                                         Domestic                                                 Media Compass
                                         International
-----------------------------------------------------------------------------------------------------------------------
o   Live Broadcasts:              o   Press Release              o   Webcasting               o   Competitive
        Satellite Media Tours          Distribution                                                Analysis
         Radio Media Tours
       Special Event
         Broadcasts
         Video Conferences
        Audio Conferences
-----------------------------------------------------------------------------------------------------------------------
o   Electronic Press Kits         o   Still Photography &        o   Web Releases             o   Campaign
                                       Digital Distribution                                        Effectiveness
-----------------------------------------------------------------------------------------------------------------------
o   Public                                                       o   Newstream.com            o   Performance
    Service                                                                                       Benchmarking
    Announcements
-----------------------------------------------------------------------------------------------------------------------
o   Corporate Videos                                             o   Digital Photo            o   Syndicated
                                                                     Distribution                  Research Studies
-----------------------------------------------------------------------------------------------------------------------
                                                                                              o   Media Audits
-----------------------------------------------------------------------------------------------------------------------
                                                                                              o   Strategic
                                                                                                  Communications
                                                                                                  Consulting and Crisis
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

CLIENTS

The Company  provides its  services to more than 3,000  clients.  The  Company's
clients  include  corporations  such as Accenture,  Altria Group,  AT&T,  Bayer,
DIAGEO,  Disney,  Ford, GE Financial,  General Motors,  GlaxoSmithKline,  Intel,
Jaguar,  Miramax,  McDonald's,  Morgan Stanley,  Nasdaq, National Association of
Realtors,   Royal   Philips   Electronics,   Siemens  and  Visa   International;
organizations such as the American  Association of Retired Persons, the European
Space  Agency and National  Association  of  Realtors;  and the world's  largest
marketing  communications  firms  such as  Burson-Marsteller,  Hill &  Knowlton,
Ketchum  Communications,  Edelman Public Relations Worldwide and Weber Shandwick
Worldwide.

DISTRIBUTION AGREEMENTS
The Company has long-standing  distribution alliances and powerful relationships
with  major news  organizations  that  provide  clients  unparalleled  access to
newsroom decision-makers. Through an agreement with the Associated Press for the
use of its AP  Express  newswire,  Medialink  can  quickly  alert  more than 700
television and 400 radio  newsrooms to clients'  impending video and audio news.
The Company's strong relationships with ABC, CBS and FOX, among others,  provide
it access  to their  network  affiliates  through  their  dedicated  and  highly


                                       6
<PAGE>

cost-effective   satellite  news  feeds.   Medialink  continues  to  expand  its
distribution  infrastructure  through  strategic  distribution  agreements  with
high-profile  media companies such as AOL and Yahoo!.  Through its Newstream.com
joint venture,  the Company has developed a delivery  mechanism for  multi-media
content to more than 11,000 on-line  newsrooms.  Due to the Company's  extensive
usage  of  both  satellite  distribution  and  electronic  broadcast  monitoring
services,  the  Company  is able to  obtain  preferential  pricing  from its key
suppliers.  Medialink's extensive relationships and its reputation as a producer
of  newsworthy,  broadcast-quality  content ensure that clients' video and audio
news  productions  capture the  attention of newsroom  decision-makers  and thus
their intended audiences.


Background

The Company,  founded in 1986 with the mission of  developing  the world's first
distribution  system for video news  releases and other video  public  relations
material,  began  offering  production - in addition to  distribution - of video
news  releases  in 1994 and has since  developed  a full range of video,  audio,
Internet, still photography and print services which it now provides on a global
basis.  Medialink  enables its clients to reach more than  11,000  newsrooms  at
television and radio networks, local stations, cable channels,  direct broadcast
satellite systems, as well as more than 11,000 online multimedia newsrooms.

The Company's  expanded service  offerings have evolved from its core business -
the satellite  distribution  of video news releases  ("VNR") and the  electronic
monitoring of their  broadcasts on television.  A VNR is a television news story
that communicates an entity's public relations or corporate message.  It is paid
for by the corporation or organization seeking to announce news and is delivered
without charge to the media. Ultimately, a VNR is the television equivalent of a
printed press release, transforming the printed word into the sound and pictures
television  newsrooms can use in programming.  Produced in broadcast news style,
VNRs relay the news of a product launch,  medical  discovery,  corporate  merger
event,   timely   feature  or  breaking  news   directly  to   television   news
decision-makers who may use the video and audio material in full or edited form.
Most  major  television  stations  in the world now use VNRs,  some on a regular
basis. The Company offers VNR and Audio News Release ("ANR") production services
worldwide.  Working closely with clients, Medialink's team of highly experienced
broadcast and network radio professionals instantly translates clients' messages
into effective video or audio news stories. All aspects of production, including
scripting, editing, narration and sound bites of the news story are custom-built
and designed to reach specifically targeted audiences.

The Company also  produces  and  coordinates  live  broadcast  services  include
Satellite Media Tours ("SMT"),  Radio Media Tours ("RMT"),  audio and video news
conferences  and  special-event  broadcasts.  SMTs  consist  of  a  sequence  of
one-on-one satellite interviews with a series of pre-booked television reporters
across the country or around the world. Typical SMT applications include,  among
others, an interview with an author, performer,  executive or other spokesperson
promoting an upcoming event, product,  movie or book release. SMTs generally are
conducted from a studio but can originate from remote locations and may be aired
live by the television station or recorded for a later airing.  Similar to SMTs,
Medialink  offers RMTs targeted to radio  stations  across the country or around
the world.

The  acceptance of digital  audio and video media drove the Internet  evolution.
Widespread  adoption of  Internet-based  communications  continues  as companies
leverage  the  opportunity  by  creating  content-rich  Web  destinations  while
controlling  costs. In 1999,  Medialink created  Newstream.com,  a joint venture
with  Business  Wire,  a  leading  distributor  of  text-based  press  releases.
Newstream.com  delivers  multimedia  assets to more than 11,000  online news and
information  Web  sites  that   increasingly   need  streaming   video,   audio,


                                       7
<PAGE>

presentations,  and  graphics  to be  competitive.  During  its  fourth  year of
operations,   Newstream.com  continued  to  experience  growth.  Newstream.com's
overall  membership  -  including   journalists,   professional   communicators,
financial  analysts and members of the general public - stands at nearly 70,000.
The number of  registered  journalists  stood at more than 13,000 as of December
2003. More than 13,000 professional  communicators and more than 4,000 financial
analysts  were  registered  on  Newstream.com  in 2003.  Registration  among the
general public was recorded at more than 35,000 by December 2003.

In June 1997, the Company  acquired certain assets of Corporate TV Group Inc., a
provider  of  strategic  video   communications   to   corporations   and  other
organizations for internal and external audiences.

In November  1998,  Medialink  expanded  its United  Kingdom  still  photography
service  into the United  States  through  the  acquisition  of  WirePix,  a New
York-based  public relations photo service.  The Company's clients have included
corporations such as Hasbro, Colgate-Palmolive,  Compaq Computer Corporation and
McDonald's.  Public  relations  firms such as  Burson-Marstellar,  Cohn & Wolfe,
Fleishman  Hillard  and  Manning  Selvage  & Lee  have  also  engaged  WirePix's
services.

In late 1999, the Company acquired U.S. Newswire LLC. U.S. Newswire,  founded in
1986, is a leader in providing wire service, Internet and online distribution of
full-text and  multimedia  news for government and public policy news sources to
news media and online  services - locally,  nationally  and  worldwide.  Clients
include  Cabinet  agencies  and the majority of  political  campaigns,  advocacy
groups,  trade  associations,  "think  tanks",  public  affairs  firms and other
similar organizations.

The Company  continues  to diversify  its service  offerings,  and in 1999,  the
Company accelerated  development of its research group by acquiring the Delahaye
Group,  a leading public  relations and media  analysis  firm.  During 2000, the
Company  successfully  integrated  it with  its  own  research  operations.  The
research team has emerged as a leader in helping  corporations and organizations
around the world  communicate  more  efficiently and  effectively.  By providing
media  monitoring,  analysis,  and public  relations  research,  Medialink helps
corporations  determine return on investment from their communications  efforts.
Contributing  to the group's growth were the Company's  previous  investments in
Infotrend and NewsIQ,  both proprietary media tracking tools,  enabling Delahaye
to  process  thousands  of pieces of news and  provide  clients  with  analytics
relating to the client's overall communications program.

In 2001,  the Company  introduced  the Media  Reputation  Index  (MRi).  The MRi
assesses the media's  impact on corporate  reputation,  providing  the basis for
understanding and improving a company's perception as covered by the news media.
The index  benchmarks the 100 largest  U.S.-based  companies  including The Walt
Disney  Company,  Microsoft,  Wal-Mart,  General  Motors Corp.  and Time Warner,
tracking and evaluating  each company's  media coverage over time and versus all
100 companies.

In 2002, the Company launched  Teletrax(TM),  providing  Medialink with a unique
selling  proposition  complementary  to its core broadcast  service  business by
offering a content  management tool with the distinctive  ability to track video
content  whenever  and  wherever it is  broadcast.  Teletrax(TM)  is expected to
unlock new revenue streams for Medialink  outside of its  traditional  business.
Teletrax(TM)   fulfills  the  needs  of  a  variety  of  industries,   including
advertising,  sports,  music,  film and television  syndication.  The network of
detectors  currently  monitors  more than 800  television  stations in nearly 50
countries, including more than 100 top-ranking markets in the United States.


                                       8
<PAGE>

The  Company  has many  competitors  in  different  aspects  of its  businesses,
although no one competitor competes in all of the Company's businesses.  Some of
these  competitors  or their  parent  companies  may have  assets  substantially
greater than those of the Company.

Employees

As of December 31, 2003,  the Company had 268 employees  including 180 in client
services,  55 in sales and  marketing  and 33 in corporate  and  administration.
Included in corporate and administration were executives totaling 6. None of the
Company's  employees is represented by a labor union.  Management  believes that
its  employee  relations  are good.  The Company  also  engages on a  part-time,
project-by-project  basis,  independent  production  crews at various  locations
worldwide. These crews have the skills, training and experience that the Company
requires for its production services.

The Company,  a Delaware  corporation,  was  incorporated  in 1986.  Medialink's
website is http://www.medialink.com. The Company makes available free of charge,
on or through its Web site, its annual,  quarterly and current reports,  and any
amendments  to  those  reports,   as  soon  as  reasonably   practicable   after
electronically  filing such reports with the Securities and Exchange  Commission
("SEC").   Such   reports   are   also   available   on   the   SEC's   website,
http://www.sec.gov.


ITEM 2.           PROPERTIES.

As of December 31, 2003, the Company's properties are all leased as follows:

         Location                            Gross Square Footage
         --------                            --------------------
         New York                                       39,368
         Boston                                          1,655
         Chicago                                         1,317
         Dallas                                          1,596
         Washington, DC                                  7,043
         San Francisco                                   1,401
         Los Angeles                                     4,047
         Norwalk, CT                                    24,690
         Portsmouth, NH                                 11,055
         London                                         10,896



ITEM 3.           LEGAL PROCEEDINGS.

The Company is not a party to any material legal proceedings.


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

None.



                                       9
<PAGE>

                                     PART II

ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  STOCK  AND  RELATED  STOCKHOLDER
         MATTERS.

The  Company's  common  stock is traded  on the  National  Market  System of the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
under the symbol MDLK.  The following  table sets forth the high and low closing
sales  prices per share of the  Company's  common  stock on the NASDAQ  National
Market System for the periods indicated:

                   Quarter Ended                  Low         High
                   -------------                 -----        -----
         Quarter ended March 31, 2003            $2.77        $3.52
         Quarter ended June 30, 2003              2.60         3.55
         Quarter ended September 30, 2003         2.85         4.44
         Quarter ended December 31, 2003          2.82         3.48

         Quarter ended March 31, 2002             2.50         3.44
         Quarter ended June 30, 2002              2.62         4.30
         Quarter ended September 30, 2002         3.18         3.99
         Quarter ended December 31, 2002          2.89         3.83


As of December 31, 2003, there were approximately 1,343 holders of record of the
Company's common stock.

The Company has not paid,  and does not  anticipate  paying for the  foreseeable
future,  any  dividends  to holders  of its common  stock.  The  declaration  of
dividends by the Company in the future is subject to the sole  discretion of the
Company's Board of Directors and will depend upon the operating results, capital
requirements and financial position of the Company,  general economic conditions
and other pertinent conditions or restrictions relating to any financing.

Equity Compensation Plan Information

Information  regarding the Company's equity  compensation  plans is set forth in
the  section  entitled  "Executive   Compensation  -  Equity  Compensation  Plan
Information" in the Company's Definitive Proxy Statement, to be filed within 120
days after Registrant's  fiscal year end of December 31, 2003, which information
is incorporated herein by reference.



                                       10
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

The following selected consolidated financial data have been derived from the
Company's audited consolidated financial statements. The information below
should be read in conjunction with the consolidated financial statements and
related notes and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Annual Report on Form
10-K.

Certain acquisitions occurring in 1999 have been accounted for under purchase
accounting and accordingly, are only reflected herein for dates and periods on
and after the respective dates of acquisition. Additionally, all of the balances
have been restated to reflect the merger with The Delahaye Group, Inc. which was
accounted for as a pooling. See Note 3 of the Company's Consolidated Financial
Statements.

<TABLE>
<CAPTION>
                                              For the Years Ended December 31,
                                    2003        2002        2001        2000       1999
                                    ----        ----        ----        ----       ----
                                            (In thousands, except per share data)

OPERATING DATA:

<S>                              <C>         <C>         <C>         <C>        <C>
Revenues                         $ 44,054    $ 47,365    $ 48,420    $ 56,474   $ 44,614
Gross profit                       29,967      31,629      30,722      35,958     29,277
Selling, general and
  administrative expenses (a)      29,757      30,490      32,638      31,426     25,924
Loss from joint venture               316         350         728       1,079        234

Operating income (loss)            (2,555)     (1,817)     (6,216)      3,453      3,119
Income (loss) before provision
  for income taxes                 (2,842)     (2,015)     (6,348)      3,532      3,339
Net income (loss)                  (2,692)     (1,869)     (3,773)      2,057      1,992

Earnings (loss) per share        $  (0.45)   $  (0.32)   $  (0.65)   $   0.35   $   0.34

BALANCE SHEET DATA:

Working capital                  $  2,768    $  4,308    $  6,085    $ 10,644   $ 11,117
Assets                             36,712      40,643      40,813      42,028     36,982
Long-term debt, net                   173         217          95         157        233
Stockholders' equity             $ 24,798    $ 27,204    $ 29,046    $ 32,570   $ 29,887
</TABLE>

(a) 2003  selling,  general  and  administrative  expenses  ("S, G & A") include
restructuring  charges  related to the sublease of excess  office space of $592.
2002 S, G & A  includes  advisory  charges  of  $1,300.  2001 S, G & A  includes
restructuring  charges, loss on sale of subsidiary and advisory charges of $634,
$496, and $805, respectively.

                                       11
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

Summary and Outlook

The year 2003 was a  challenging  year for the  Company.  The  Public  Relations
industry  showed few signs of  vitality  as  worries  about the state of the U.S
economy  continued to put pressure on public relations  budgets and consequently
demand for the Company's Media  Communications and Media Research  services.  In
addition,  economic  pressures in the U.K. and Europe  resulted in a significant
reduction in demand for the Company's London-based International services.

Revenues from Media  Communications  and Media Research services decreased $3.57
million,  or 8% as compared to 2002. At the same time, the Company has continued
to  invest in its new  Teletrax(TM)  service,  completing  the  roll-out  of its
detection  network to nearly 50 countries  and over 700 channels by December 31,
2003.

In order to compensate  for the lower  revenue  levels and to fund the Company's
investment  in  Teletrax(TM),  the  Company  focused  its  efforts  on  creating
operating  efficiencies,  increasing  its gross  profit  margins,  reducing  its
headcount, where practicable,  and identified further savings in selling general
and administrative expenses ("S, G & A").

Improvements  in  gross  profit  margins  on 2003  revenue  created  savings  of
$548,000. Excluding costs related to Teletrax(TM),  the Company achieved savings
of $715,000 and $952,000 in payroll and S, G & A, respectively, as compared with
2002.  Related  to these  savings  the  Company  incurred  termination  costs of
$430,000 and a loss on the subletting of excess space of $592,000.

During 2003 the Company  continued to invest in the roll-out of the Teletrax(TM)
network,  and absorbed $2.50 million of operating losses on the new service. The
Company believes that the Teletrax(TM) network is now of a size that can satisfy
the needs of potential  clients.  During the fourth quarter of 2003 and in early
2004 a number of  potential  clients  tested the  service and  Teletrax(TM)  has
recently  signed several clients  including  Universal  Domestic  Television and
Tribune  Entertainment  under long term  contracts.  In  addition,  the  service
continues to be tested by a number of companies in the news,  entertainment  and
advertising industries.

The Company finances its operations from cash generated from operations and from
its line of credit  facility.  During  2003 the  Company  was in  default on its
tangible net worth  covenant  under the line of credit and,  subsequent  to year
end, the bank issued a forbearance requiring the Company to limit its borrowings
to the maximum of $5.00  million.  In April 2004,  the Bank agreed to extend the
forbearance through January 31, 2005 and required  additional  reductions in the
maximum line  throughout  2004. The Company  believes the current line of credit
facility,  in conjunction  with the costs savings  implemented in 2003,  will be
adequate  to fund the  Company  during  2004.  The  Company  has  agreed to find
additional financing to fund the operations of Teletrax(TM) by January 15, 2005.


                                       12
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Fiscal Year 2003 as Compared to Fiscal Year 2002

Revenues  decreased by $3.31  million,  or 7.0%,  from $47.36 million in 2002 to
$44.05 million in 2003. Revenue from the Company's Media Communications Services
decreased by $2.98 million,  and the Company's Media Research  Services  revenue
decreased by $591,000.  Additionally,  revenue from Teletrax(TM),  the Company's
76% owned subsidiary,  was $645,000 in 2003, an increase of $261,000, or 68%, as
compared to 2002. During 2003, the Company experienced a decrease in demand from
clients for its Media Communications Services products as a result of the events
leading up to the war in Iraq and the  commencement of military  action.  Events
which dominate news broadcasts, such as the war in Iraq, can cause the Company's
clients to delay the use of, or in some cases not use, the  Company's  services,
due to concern that the impact of their projects would be adversely  affected by
the  focus of the  media on such  news  events.  Additionally,  during  2003 the
Company was negatively  affected by the continuing adverse economic  conditions,
particularly in the public relations sector.

Direct costs decreased by $1.65 million,  or 10.5%,  from $15.74 million in 2002
to $14.09  million in 2003.  The decrease in direct costs is the result of lower
revenues and increased profit margins in 2003 as compared to 2002.  Direct costs
as a percentage of revenue were 32.0% and 33.2%, respectively, in 2003 and 2002.
In spite of the difficult economic environment,  the Company was able to improve
its  gross  profit  margin.   The  increase  in  the  gross  profit  margin  was
attributable  to  a  favorable  product  mix  during  2003  and  the  result  of
adjustments  the Company made over the last several  quarters to its direct cost
structure,  including renegotiating vendor rates and improving the efficiency of
its operating processes.  Although the Company experienced a decrease in revenue
of $3.31 million as a result of the Company's improved margins,  the decrease in
gross profit was $1.66 million.

Selling,  general and administrative  ("S, G & A") expenses decreased by $24,000
or less than 1.0%,  from $29.19  million in 2002 to $29.17  million in 2003. The
change in S, G & A expenses  includes  increases in payroll and  payroll-related
costs  ("Payroll")  of  approximately  $376,000.  The  increase  in  Payroll  is
substantially  the result of  termination  costs during 2003  ($430,000) and the
increase of Payroll related to Teletrax(TM), the Company's subsidiary, formed in
April 2002, ($661,000),  net of savings of $715,000 from the Company's remaining
operations. Additionally,  Teletrax(TM) had increases in other S, G & A expenses
of  approximately  $551,000  in 2003 as  compared  to 2002.  Not  including  the
increases in S, G & A expenses  relating to Teletrax(TM),  the Company otherwise
reduced  its S, G & A by  approximately  $952,000  in 2003 as  compared to 2002,
including, but not limited to, savings in advertising and marketing,  travel and
entertainment, rent and office costs.

In September  2003 the Company  entered  into an  agreement  to sublease  excess
office space in its Norwalk,  CT location.  The sublease  resulted in a $592,000
restructuring  charge to operations in the 3rd quarter of 2003. The  transaction
reduces S, G & A expenses by  approximately  $120,000 per annum through February
2008.

In August  2001 the  Company  received  an  unsolicited  takeover  bid by United
Business Media plc to purchase all of its issued and outstanding  common shares.
In  connection  with this  unsolicited  offer  the  Company  incurred  legal and
financial  advisory  expenses  of  approximately  $1.30  million  for 2002.  The
unsolicited  offer is no  longer  active  and the  Company  does not  anticipate
incurring any additional costs.


                                       13
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Depreciation and amortization expense decreased by $157,000, or 6.0%, from $2.61
million in 2002 to $2.45 million in 2003. In 2002 a customer  list,  acquired in
conjunction  with the  acquisition  of The  Corporate  TV Group,  Inc. was fully
amortized.  As a result,  there was a  decrease  in  amortization  of  $367,000.
Additionally, depreciation and amortization increased approximately $209,000 due
to current year fixed asset additions,  substantially related to the roll out of
Teletrax(TM).

As a result of the foregoing, the Company experienced an operating loss of $2.56
million in 2003 as compared to an operating  loss of $1.82 million in 2002.  The
operating loss in 2003 includes a $592,000  restructuring  charge related to the
sublease of excess office space and termination costs of approximately $430,000.
The  operating  loss  in  2002  included  advisory  charges  of  $1.30  million.
Additionally,  operating  losses of $2.49 million and $875,000 in 2003 and 2002,
respectively, from the Company's 76% owned subsidiary, Teletrax(TM) are included
in operating  losses.  The minority  shareholder of  Teletrax(TM)  has no future
funding obligations and, accordingly,  the Company has recorded 100% of the loss
from this subsidiary.

Interest expense increased by $35,000 from $279,000 in 2002 to $314,000 in 2003.
The increase was due to increases in interest rates during 2003 on the Company's
line of credit  facility,  net of a decrease  in  interest  expense due to lower
balances on the credit line,  and interest on the  Company's  capitalized  lease
obligations in 2003.

Income tax benefit was calculated using  Medialink's  effective tax rates of 41%
in both 2003 and 2002.  In 2003 and 2002 the Company was also subject to minimum
state and local  taxes and taxes on  capital.  Additionally,  as a result of the
limited  historical  results of its UK operations,  including  Teletrax(TM)  and
management's  limited ability to project its UK future results,  the Company has
recorded a valuation  allowance of $833,000  related to the foreign deferred tax
asset generated by its UK losses.  Recording the additional  valuation allowance
and the minimum  state and local taxes  reduces the  effective tax rates to less
than 5.3% and 7.2% in 2003 and 2002, respectively.

Including a loss from a joint  venture of $316,000 and  restructuring  charge of
$592,000,  the Company had a net loss of $2.69 million in 2003, as compared to a
net loss of $1.87 million in 2002, which included a loss from a joint venture of
$350,000 and advisory  charges of $1.30  million.  The net loss in 2003 and 2002
included losses of $2.48 million and $886,000,  respectively, from Teletrax(TM).
The minority shareholder has no future funding obligations and, accordingly, the
Company  has  recorded  100% of the  losses  from this  subsidiary.  In 2003 the
Company  had basic loss per share of $0.45  compared  to basic loss per share of
$0.32 in 2002.

Fiscal Year 2002 as Compared to Fiscal Year 2001

Revenues  decreased by $1.06  million,  or 2.2%,  from $48.42 million in 2001 to
$47.36 million in 2002. Revenue from the Company's Media Communications Services
decreased  by  $256,000,  and the  Company's  Media  Research  Services  revenue
decreased by $799,000.  During 2002 the Company  continued to be challenged by a
difficult  economic  environment,  which had an adverse  effect on the Company's
clients'  spending  and  communication  budgets,  resulting  in the  decrease in
revenue as compared to 2001. Third party  statistics,  including  various public
relations  trade  magazines,  indicate  that the  overall  industry  declines in
revenue were greater than what the Company experienced.


                                       14
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Direct costs decreased by $1.96 million,  or 11.1%,  from $17.70 million in 2001
to $15.74  million in 2002.  The decrease in direct costs is the result of lower
revenues and increased profit margins in 2002 as compared to 2001.  Direct costs
as a percentage of revenue were 33.2% and 36.6%, respectively, in 2002 and 2001.
In spite of the difficult economic environment,  the Company was able to improve
its  gross  profit  margin.   The  increase  in  the  gross  profit  margin  was
attributable to a favorable  product mix during 2002 and operating  efficiencies
implemented during 2002.

Selling,  general and  administrative  ("S, G & A") expenses  decreased by $1.51
million or 4.9%, from $30.70 million in 2001 to $29.19 million in 2002. Included
in the decrease in S, G & A expenses is a decrease in payroll and related  costs
of approximately $730,000. In reaction to the difficult economic environment and
the effects of September 11, 2001, the Company  reduced its headcount in the 4th
Quarter of 2001 and produced other S, G & A savings,  including, but not limited
to,  advertising  and  marketing,  travel and  entertainment  and office  costs.
Offsetting these cost reductions,  Teletrax(TM), the Company's subsidiary formed
in 2002, incurred $912,000 of S, G & A expenses during 2002.

During 2001 the Company sold a component of its UK photography business and as a
result incurred a loss from the sale of a subsidiary of $496,000.

During 2001 the Company combined its U.S. and international  broadcast  services
into a Global Broadcast Services unit. The corporate  reorganization is designed
to  accelerate  the  growth of its  broadcast  services  business.  The  Company
incurred a charge of $420,000 as a result of the restructuring. Additionally, in
September  2001 the  Company  reduced  its staff in the UK and US,  incurring  a
restructuring charge of $214,000.

In August  2001 the  Company  received  an  unsolicited  takeover  bid by United
Business Media plc to purchase all of its issued and outstanding  common shares.
In  connection  with this  unsolicited  offer  the  Company  incurred  legal and
financial  advisory  expenses of approximately  $1.30 million and $805,000,  for
2002 and 2001,  respectively.  The unsolicited offer is no longer active and the
Company does not anticipate incurring any additional costs.

Depreciation and amortization expense decreased by $966,000,  or 27%, from $3.57
million in 2001 to $2.61 million in 2002.  The decrease was due primarily to the
elimination of  amortization  of goodwill as a result of the  implementation  of
SFAS 142, net of additional  depreciation and amortization  expense arising from
additions in property and equipment and capitalized  software.  Included in 2001
was  amortization  of  goodwill  of  $875,000  and none for 2002.  Additionally,
amortization  on the Company's  customer list,  acquired in connection  with the
acquisition of Corporate  Television Group,  which became fully amortized during
the 2nd Quarter of 2002, decreased $367,000 from $800,000 in 2001 to $433,000 in
2002.

As a result of the foregoing, the Company experienced an operating loss of $1.82
million in 2002 as  compared to  operating  loss of $6.22  million in 2001.  The
operating  loss in 2002  included  advisory  charges  of  $1.30  million  and an
operating loss of $875,000 from the Company's newly formed 76% owned subsidiary,
Teletrax(TM).  The minority  shareholder of  Teletrax(TM)  has no future funding
obligations  and,  accordingly,  the Company has recorded  100% of the loss from
this  subsidiary.  The  operating  loss  in  2001  included  loss  on  sale of a
subsidiary of $496,000,  restructuring  charges of $634,000 and advisory charges
of $805,000.


                                       15
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Interest expense  increased by $6,000 from $273,000 in 2001 to $279,000 in 2002.
The increase was due to the Company's increased borrowings on its line of credit
during 2002 as compared to 2001, net of reduced interest rates during 2002.

Income tax expense  (benefit) was  calculated  using  Medialink's  effective tax
rates of 41% in both 2002 and 2001.  In 2002 the  Company  was also  subject  to
minimum state and local taxes and taxes on capital. Additionally, as a result of
the limited historical results of Teletrax(TM) and management's  limited ability
to project  Teletrax(TM)'s  future results, the Company has recorded a valuation
allowance of $252,000  related to the foreign  deferred  tax asset  generated by
Teletrax(TM)'s loss.

Including a loss from a joint venture of $350,000 and advisory  charges of $1.30
million,  the Company had a net loss of $1.87  million in 2002, as compared to a
net loss of $3.77 million in 2001, which included a loss from a joint venture of
$728,000,  advisory  charges  of  $805,000,  loss on the sale of  subsidiary  of
$496,000 and restructuring charges of $634,000.  The net loss in 2002 included a
loss of $886,000  from  Teletrax(TM).  The  minority  shareholder  has no future
funding obligations and, accordingly,  the Company has recorded 100% of the loss
from this  subsidiary.  In 2002 the  Company  had basic  loss per share of $0.32
compared to basic loss per share of $0.65 in 2001.

Below is a table that presents our  contractual  obligations  and commitments at
December 31, 2003:

                      Payments Due by Period (in thousands)

<TABLE>
<CAPTION>
---------------------------- -------------- -------------- ------------- ------------ ----------------
                                               One Year
 Contractual Obligations         Total        Less than     1-3 years     4-5 years    After 5 years
---------------------------- -------------- -------------- ------------- ------------ ----------------
<S>                                <C>            <C>           <C>        <C>             <C>
Capital lease obligations          $269           $96           $173           --              --
---------------------------- -------------- -------------- ------------- ------------ ----------------
Operating lease
  obligations                   $17,125        $3,140         $8,947       $3,779          $1,259
---------------------------- -------------- -------------- ------------- ------------ ----------------
     Total                      $17,394        $3,236         $9,120       $3,779          $1,259
                                =======        ======         ======       ======          ======
---------------------------- -------------- -------------- ------------- ------------ ----------------
</TABLE>


We do not have any off-balance  sheet  arrangements  that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources that are material to investors.


LIQUIDITY AND CAPITAL RESOURCES

Medialink has financed its  operations  primarily  through cash  generated  from
operations  and reliance on its line of credit  facility.  Cash flow provided by
operating  activities amounted to $446,000 million and $3.95 million in 2003 and
2002, respectively. Capital expenditures which are primarily incurred to support
Medialink's  sales and operations and the roll-out of the  Teletrax(TM)  network
were $1.71 million in 2003 and $1.35 million in 2002.


                                       16
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

On August 1, 1999 the Company entered into a joint venture with Business Wire to
form Business Wire/Medialink,  LLC, doing business as Newstream.com. Each member
made an initial capital  contribution of $2.00 million,  plus acquisition costs.
The Company accounts for its interest in Newstream.com  under the equity method.
Each member made additional capital contributions of $250,000 each during 2002.

During 2003 and 2002 the Company made various earn-out  payments on acquisitions
aggregating  $341,000 and $850,000,  respectively,  in cash.  The Company has no
additional earn-out payments on its acquisitions.

In June 1997  Medialink  acquired  certain  assets of CTV. The initial  purchase
price of $4.18  million was paid $3.85 million in cash and $333,000 in Medialink
common stock.  Included in the cash portion was $300,000 related to the purchase
of a  non-compete.  Earn-out  provisions  allowed for up to an  additional  $6.2
million to be paid through 2002,  based upon certain  revenue and  profitability
targets  over the next five years.  Assuming  the  targets are met,  the overall
consideration  will be in the  form of  cash  and  Medialink  common  stock,  as
specified in the agreement. During 2003 and 2002 Medialink made cash payments of
approximately $142,000 and $625,000,  respectively,  as additional consideration
for the CTV acquisition.

During  1999 the Company  made an  acquisition  of a  news-related  company.  As
consideration  for this  purchase,  the Company  paid $1.26  million in cash and
55,348  shares  of the  Company's  common  stock  valued at  $800,000.  Earn-out
provisions  allowed for  additional  payments  of purchase  price of up to $1.50
million,  based on reaching certain profitability levels, to be paid in the form
of cash and the  Company's  common stock as specified in the  agreement,  over a
period of three years.  Through  December 31, 2003 $1.50  million of  additional
consideration has been recorded under the earn-out provisions.

At December 31, 2003 the Company had no potential additional earn-out provisions
on any of its acquisitions.

The Company has a line of credit  facility with a bank,  allowing for borrowings
of up to $7.50 million  through April 15, 2004.  Loans under the Credit Facility
bear  interest at the 30-Day  LIBOR Rate (1.12% at December 31, 2003) plus 2.25%
through  3.25%,  per  annum,  as  defined.  Covenants  under  the line of credit
agreement  require  the  Company to meet  certain  financial  ratios,  including
minimum  tangible  net  worth  and  minimum  earnings  before  interest,  taxes,
depreciation,  amortization and other charges,  as defined in the agreement.  At
December 31, 2003 the Company was not in  compliance  with the minimum  tangible
net worth  covenant  which has been waived by the lender  through April 15, 2004
through the issuance of a forbearance. In conjunction with the forbearance,  the
lender required the Company pay down its line of credit by $500,000,  reduce the
maximum  borrowings  under the  facility  to $5.00  million  and put into  place
minimum cash balance and limits on capital expenditure covenants, as defined.


                                       17
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Subsequent to December 31, 2003 the bank issued an additional  forbearance  (The
"Forbearance")  expiring  January 31, 2005. The Forbearance  reduces the maximum
line to the lower of $4.00  million,  $3.75  million,  $3.50  million  and $3.00
million at April 15, 2004, July 1, 2004,  October 1, 2004 and December 31, 2004,
respectively,  or 80% of  eligible  accounts  receivable  balances,  as defined.
Interest  under the  Forbearance  is  payable  monthly at the rate of the 30-Day
LIBOR Rate plus 5.5% per annum.  Covenants under the Forbearance  include limits
on capital expenditures,  minimum earnings before interest,  taxes, depreciation
and  amortization  and minimum  tangible net worth, as defined in the agreement.
Additionally,  the  Forbearance  requires  the  Company to obtain  financing  by
January 15, 2005 to support Teletrax(TM)'s operations.

As of December 31, 2003 Medialink had $3.71 million in cash and cash equivalents
as compared to $6.39  million as at December 31,  2002.  As at December 31, 2003
and 2002,  long-term debt, including current portion, was $269,000 and $331,000,
respectively.

The  Company  believes,  based  upon its 2004  financial  forecast,  that it has
sufficient  capital resources,  including  availability under its line of credit
facility,  alternate sources of funding, and cash flow from operations,  to fund
its net cash  needs  for at least  the next  twelve  months.  The  Company  also
believes that in the event that actual 2004 revenues are lower than its forecast
that the Company's  Direct,  Selling,  General and  Administrative  costs can be
reduced to minimize the effect on forecasted profit.


RISK FACTORS

Major News Events

Events which dominate news  broadcasts,  such as the events of September 11th or
the  involvement by the United States in a war, may cause the Company's  clients
to delay or not use the  Company's  services  for a  particular  project as such
clients may determine that their messages may not receive adequate  attention in
light of the  coverage of other news  events.  Such  circumstances  could have a
material  adverse  effect  on the  Company's  business,  operating  results  and
financial condition.

Susceptibility to General Economic Conditions

The  Company's  revenues are affected by its clients'  marketing  communications
spending  and  advertising  budgets.  The  Company's  revenues  and  results  of
operations may be subject to fluctuations based upon general economic conditions
in the  geographic  locations  where it offers its services or  distributes  its
material.  If  there  were to be  continued  economic  downturn  or a  continued
recession in these geographic locations,  then the Company expects that business
enterprises,  including its clients and potential clients,  could  substantially
and immediately reduce their marketing and communications  budgets. In the event
of such an economic  climate,  there would be a material  adverse  effect on the
Company's  business,  operating  results,  financial  condition  and  ability to
refinance its existing line of credit agreement.


                                       18
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Competition

The markets for the  Company's  services are highly  competitive.  The principal
competitive factors affecting the Company are effectiveness, reliability, price,
technological  sophistication  and  timeliness.   Numerous  specialty  companies
compete with the Company in each of its service lines although no single company
competes  across  all  service  lines.  Some  of the  Company's  competitors  or
potential   competitors   have  longer   operating   histories,   longer  client
relationships and significantly  greater financial,  management,  technological,
sales,  marketing and other  resources  than the Company.  In addition,  clients
could perform  internally all or certain of the services provided by the Company
rather than outsourcing  such services.  The Company could face competition from
companies in related  communications markets which could offer services that are
similar or superior to those offered by the Company.  In addition,  national and
regional  telecommunications  providers  could enter the market with  materially
lower electronic  delivery costs,  and radio and television  networks could also
begin transmitting business communications separate from their news programming.
The Company's  ability to maintain and attract  clients depends to a significant
degree on the quality of services  provided and its reputation among its clients
and potential  clients as compared to that of its  competitors.  There can be no
assurance that the Company will not face increased  competition in the future or
that such  competition  will not have a material adverse effect on the Company's
business, operating results and financial condition.

New Services

The Company must develop new  services to remain  competitive,  maintain or grow
market share and to operate in new markets.  There can be no assurance  that the
Company  will be  successful  in  developing  new  services,  or that  those new
services  will meet  customer  needs.  As a result of the  expenses  incurred in
developing  new  services and the  potential  inability of the Company to market
these services  successfully,  the Company's operating results may be negatively
affected.

Provisions of Our Charter  Documents May Have  Anti-takeover  Effects that Could
Prevent a Change in Control Even if the Change in Control Would be Beneficial to
our  Stockholders   Provisions  of  our  amended  and  restated  certificate  of
incorporation, by-laws and Delaware law could make it more difficult for a third
party to  acquire  the  Company,  even if doing  so would be  beneficial  to our
stockholders.

Line of credit

The Company has a line of credit  facility with a bank,  allowing for borrowings
of up to $7.50 million  through April 15, 2004.  Loans under the Credit Facility
bear  interest at the 30-Day  LIBOR Rate (1.12% at December 31, 2003) plus 2.25%
through  3.25%,  per  annum,  as  defined.  Covenants  under  the line of credit
agreement  require  the  Company to meet  certain  financial  ratios,  including
minimum  tangible  net  worth  and  minimum  earnings  before  interest,  taxes,
depreciation,  amortization and other charges,  as defined in the agreement.  At
December 31, 2003 the Company was not in  compliance  with the minimum  tangible
net worth  covenant  which has been waived by the lender  through April 15, 2004
through the issuance of a forbearance. In conjunction with the forbearance,  the
lender required the Company pay down its line of credit by $500,000,  reduce the
maximum  borrowings  under the  facility  to $5.00  million  and put into  place
minimum cash balance and limits on capital expenditure covenants, as defined.


                                       19
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)


Subsequent to December 31, 2003 the bank issued an additional  forbearance  (The
"Forbearance")  expiring  January 31, 2005. The Forbearance  reduces the maximum
line to the lower of $4.00  million,  $3.75  million,  $3.50  million  and $3.00
million at April 15, 2004, July 1, 2004,  October 1, 2004 and December 31, 2004,
respectively,  or 80% of  eligible  accounts  receivable  balances,  as defined.
Interest  under the  Forbearance  is  payable  monthly at the rate of the 30-Day
LIBOR Rate plus 5.5% per annum.  Covenants under the Forbearance  include limits
on capital expenditures,  minimum earnings before interest,  taxes, depreciation
and  amortization  and minimum  tangible net worth, as defined in the agreement.
Additionally,  the  Forbearance  requires  the  Company to obtain  financing  by
January 15, 2005 to support Teletrax(TM)'s operations.

While  management  believes  the Company is  currently  in  compliance  with the
covenants under the line of credit agreement and related forbearance  agreement,
there can be no assurance  that the Company will continue to be in compliance in
the future. In that event, the Company may be required to raise additional funds
in order to repay the outstanding balance under the line of credit and there can
be no assurance that, if required, the Company would be able to raise such funds
on favorable terms, if at all.

Capital Requirements

One or more  of our  businesses  could  require,  or  benefit  from,  additional
investment  beyond our current  capability.  Such  additional  funding  could be
raised by the Company,  or one or more of its  business  units  separately,  and
could have the effect of diluting shareholders' interests.

Other Risk Factors

Other risk factors include our recent history of losses,  our ability to achieve
or maintain  profitability,  effectiveness of our cost reduction  programs,  our
ability to develop new services and market acceptance of such services,  such as
Teletrax(TM),  our ability to develop new products  and services  that keep pace
with technology,  our ability to develop and maintain  successful  relationships
with critical  vendors,  the  potential  negative  effects of our  international
operations on the Company. In addition,  future acquisitions or divestitures and
the absence of long term  contracts  with  customers  and vendors may  adversely
effect our  operations and have an adverse  effect on pricing,  revenues,  gross
margins and our customer base.

CRITICAL ACCOUNTING POLICIES

We have identified the policies below as significant 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 Note 1 in the Notes to the Consolidated Financial
Statements in the Company's Form 10-K for the year ended December 31, 2003.


                                       20
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Revenue Recognition

Revenue earned from the  distribution  and monitoring of video news releases and
the  distribution  of printed news releases is recognized in the period that the
release is  distributed.  Fees earned for  webcasts,  satellite  media tours and
other  live  events  and  the  production  of  video  news  releases  and  still
photographs  are recognized in the period that the services are performed.  Fees
earned from research  services are recognized using the percentage of completion
method.  Invoices to clients are generated in  accordance  with the terms of the
applicable  contract,  which may not be directly  related to the  performance of
services.  Unbilled  receivables  are  invoiced  based upon the  achievement  of
specific events as defined by each agreement including deliverables,  timetables
and  incurrence  of certain  costs.  Unbilled  receivables  are  classified as a
current  asset.  Advanced  billings  to clients in excess of revenue  earned are
recorded as deferred revenues and are classified as a current liability.

Allowance for Doubtful Accounts

Management must make estimates of the uncollectibility of the Company's accounts
receivable. Management specifically analyzes accounts receivable, historical bad
debt, customer concentrations, customer creditworthiness and current trends when
evaluating the adequacy of the allowance for doubtful accounts.

Goodwill and Intangible Assets

Goodwill  represents  the excess of purchase  price and  related  costs over the
value assigned to the net tangible and intangible assets of businesses acquired.
In 2001 and 2000,  goodwill  was  amortized  on a  straight-line  basis over its
expected useful life, not to exceed 40 years,  and we periodically  reviewed the
recoverability of goodwill and intangible assets.  Effective January 1, 2002, we
adopted the provisions of Financial  Accounting Standards Board (FASB) Statement
of Financial  Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets,  which required us to cease  amortizing  goodwill and to assess goodwill
for  impairment  at least  annually in the absence of an  indicator  of possible
impairment and immediately upon an indicator of possible impairment.  The annual
impairment testing required by SFAS No. 142 also requires the Company to use its
judgment and could  require the Company to write down the carrying  value of its
goodwill and other intangible assets in future periods.

Other intangible assets,  including customer lists and covenants not to compete,
are being amortized on a  straight-line  basis over the term of the agreement or
the estimated future period of benefit, which ranges from 3 to 7 1/2 years.

The agreements  pursuant to which the Company acquired certain companies include
provisions that could require the Company to issue  additional cash or shares of
common  stock if  certain  performance  targets  are met.  The value of any such
additional  consideration  will  be  added  to  the  goodwill  related  to  such
acquisition.


                                       21
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

Long-lived Assets

Long-lived  assets,  such as  property,  plant,  and  equipment,  and  purchased
intangibles subject to amortization, are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to estimated undiscounted future
cash flows expected to be generated by the asset.  If the carrying  amount of an
asset  exceeds  its  estimated  future  cash  flows,  an  impairment  charge  is
recognized  by the amount by which the carrying  amount of the asset exceeds the
fair value of the asset. Assets to be disposed of would be separately  presented
in the balance  sheet and reported at the lower of the  carrying  amount or fair
value  less  costs  to sell  and  are no  longer  depreciated.  The  assets  and
liabilities of a disposed  group  classified as held for sale would be presented
separately in the appropriate asset and liability sections of the balance sheet.

Income Taxes

Income taxes are accounted for under the asset and  liability  method.  Deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributable to differences  between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and for operating
loss and tax credit  carryforwards.  Deferred  tax assets  and  liabilities  are
measured  using  enacted tax rates  expected  to apply to taxable  income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  The effect on deferred tax assets and  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date. We
considered  all of the  available  evidence to arrive at our position on the net
deferred tax assets;  however, should circumstances change which would alter our
judgment in this regard it may have an impact on future operating results.


EFFECTS OF NEWLY-ISSUED ACCOUNTING STANDARDS

In  January   2003,   the  FASB  issued   Interpretation   No.  46  ("FIN  46"),
"Consolidation of Variable Interest  Entities",  and amended the  interpretation
with FIN 46(R) in December 2003. This interpretation and its amendment set forth
a  requirement  for an investor  with a majority of the variable  interests in a
variable  interest  entity ("VIE") to  consolidate  the entity and also requires
majority  and  significant   variable  interest  investors  to  provide  certain
disclosures.  A VIE is an  entity in which the  equity  investors  do not have a
controlling  interest,  or the  equity  investment  at risk is  insufficient  to
finance  the  entity's  activities  without  receiving  additional  subordinated
financial  support  from  the  other  parties.  The  provisions  of FIN 46  were
effective  immediately for all  arrangements  entered into with new VIEs created
after January 31, 2003. The Company has not entered into any  arrangements  with
VIEs after  January 31, 2003.  For  arrangements  entered into with VIEs created
prior to January 31,  2003,  the  provisions  of FIN 46 have been delayed to the
first interim or annual period  beginning  after  December 15, 2003. The Company
has evaluated the impact of adoption of FIN 46(R) for its  arrangements  created
before January 31, 2003. The adoption of this standard is not expected to impact
the Company's financial statements.


                                       22
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (continued)

In May 2003, the FASB issued Statement of Financial  Accounting Standard No. 150
("SFAS 150"), "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity",  which establishes  standards for how an issuer
classifies and measures certain financial  instruments with  characteristics  of
both  liabilities  and  equity.   The  provisions  of  SFAS  150  are  effective
immediately for all instruments entered into or modified after May 31, 2003, and
otherwise is effective at the  beginning of the first interim  period  beginning
after June 15, 2003. The adoption of this standard did not have an effect on the
Company's financial statements.


INFLATION

Inflation has not had, nor does the Company  anticipate it having, a significant
impact on the Company's current and future operations.

FOREIGN CURRENCY

The conversion of various European  currencies to the Euro has not had, nor does
the Company  anticipate it having, a significant impact on the Company's current
and future operations.



                                       23
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Debt

The Company has a line of credit agreement which exposes the Company to the risk
of  earnings  or cash flow loss due to  changes  in market  interest  rates.  At
December 31, 2003,  $5.00  million was  outstanding  on the line of credit.  The
interest  rate on the  facility  is based upon the 30-day  LIBOR rate  (1.12% at
December  31,  2003)  plus a  margin,  as  defined.  All other  Company  debt is
fixed-rate and,  therefore,  does not expose the Company to the risk of earnings
or cash flow loss due to changes in market interest rate.

Foreign Currency Exchange Rate Risk

In the normal  course of  business,  through its UK  operations,  the Company is
exposed to the effect of foreign exchange rate fluctuations on the United States
dollar value of its foreign  subsidiaries'  results of operations  and financial
condition.  At December 31, 2003, the Company's  primary foreign currency market
exposure was the British pound.




                                       24
<PAGE>

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following audited  consolidated  financial statements and related report are
set forth in this Annual Report on Form 10-K on the following pages:

<TABLE>
<CAPTION>
<S>                                                                                    <C>
        Independent Auditors' Report                                                   F-1

        Consolidated Balance Sheets as of December 31, 2003 and                        F-2
        December 31, 2002

        Consolidated Statements of Operations for the Years Ended December 31,
        2003, December 31, 2002 and December 31, 2001                                  F-3


        Consolidated  Statements  of  Stockholders'  Equity for the Years  Ended
        December 31, 2003, December 31, 2002 and December 31, 2001                     F-4

        Consolidated  Statements of Cash Flows for the Years Ended  December 31,
        2003, December 31, 2002 and December 31, 2001                                  F-5

        Notes to Consolidated Financial Statements                                     F-6
</TABLE>



                                       25
<PAGE>

                          Independent Auditors' Report
                          ----------------------------

The Board of Directors
Medialink Worldwide Incorporated

We have  audited  the  accompanying  consolidated  balance  sheets of  Medialink
Worldwide  Incorporated  and  Subsidiaries as of December 31, 2003 and 2002, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash flows for each of the years in the  three-year  period  ended  December 31,
2003. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Medialink Worldwide
Incorporated  and Subsidiaries as of December 31, 2003 and 2002, and the results
of their operations and their cash flows for each of the years in the three-year
period  ended  December  31,  2003  in  conformity  with  accounting  principles
generally accepted in the United States of America.

As discussed in note 1, the Company  adopted  Statement of Financial  Accounting
Standards No. 142,  "Goodwill and Other  Intangibles  Assets",  as of January 1,
2002.



                                                 /S/  KPMG LLP

New York, New York
February 24, 2004, except for note 4, which is as of April 14, 2004


                                      F-1
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        As of December 31, 2003 and 2002


<TABLE>
<CAPTION>
                                                                               2003             2002
                                                                               ----             ----
<S>                                                                       <C>               <C>
                                         ASSETS
Current Assets:
   Cash and cash equivalents ........................................     $  3,708,130      $  6,389,650
   Accounts receivable, net of allowance for doubtful accounts of
     $683,420 and $655,417 ..........................................        7,225,166         6,571,226
   Prepaid expenses and other current assets ........................        2,183,011         2,101,334
   Prepaid and refundable taxes .....................................          690,657         2,269,804
   Deferred tax assets ..............................................          199,000           199,000
                                                                          ------------      ------------
       Total current assets .........................................       14,005,964        17,531,014
                                                                          ------------      ------------

Property and equipment, net .........................................        5,800,070         5,889,840

Goodwill, net of accumulated amortization of $2,467,381 .............       13,234,051        12,854,121
Customer list and other intangibles,net of accumulated amortization
  of $4,440,485 and $4,360,488 ......................................           59,515           139,512
Investment in joint venture .........................................          365,483           681,604
Deferred tax assets .................................................        1,805,000         1,655,000
Other assets ........................................................        1,441,802         1,892,243
                                                                          ------------      ------------
       Total assets .................................................     $ 36,711,885      $ 40,643,334
                                                                          ============      ============

                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Current portion of obligations under capital leases and long term
     debt ...........................................................     $     96,248      $    113,773
   Borrowings on credit facilities ..................................        5,500,000         6,536,665
   Accounts payable .................................................        1,692,713         2,203,436
   Accrued expenses and other current liabilities ...................        3,948,809         4,368,712
                                                                          ------------      ------------
       Total current liabilities ....................................       11,237,770        13,222,586
Obligations under capital leases, net of current portion ............          173,000           217,000
Other long term liabilities .........................................          503,336                --
                                                                          ------------      ------------
       Total liabilities ............................................       11,914,106        13,439,586
                                                                          ------------      ------------
Stockholders' Equity:
   Common stock; $.01 par value. Authorized 15,000,000 shares; issued
      6,040,173 shares in 2003 and  5,947,036 shares in 2002 ........           60,401            59,470
   Additional paid-in capital .......................................       25,047,284        24,768,762
   Retained earnings ................................................          238,477         2,930,754
   Accumulated other comprehensive loss .............................         (348,449)         (355,304)
                                                                          ------------      ------------
                                                                            24,997,713        27,403,682
                                                                          ------------      ------------
   Less common stock in treasury (at cost, 57,124 shares) ...........         (199,934)         (199,934)
                                                                          ------------      ------------

       Total stockholders' equity ...................................       24,797,779        27,203,748
                                                                          ------------      ------------
       Total liabilities and stockholders' equity ...................     $ 36,711,885      $ 40,643,334
                                                                          ============      ============
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-2
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2003, 2002 and 2001


<TABLE>
<CAPTION>
                                                     2003              2002              2001
                                                     ----              ----              ----

<S>                                              <C>               <C>               <C>
Revenues ...................................     $ 44,053,584      $ 47,364,720      $ 48,420,133

Direct costs ...............................       14,086,986        15,735,836        17,697,753
                                                 ------------      ------------      ------------

     Gross Profit ..........................       29,966,598        31,628,884        30,722,380

Operating expenses:
Selling, general and administrative expenses       29,165,257        29,189,674        30,703,302
Depreciation and amortization ..............        2,448,483         2,605,804         3,571,943
Loss from joint venture ....................          316,121           350,000           728,268
Loss on sale of subsidiary .................               --                --           495,905
Restructuring charges ......................          592,000                --           634,000
Advisory charges ...........................               --         1,300,000           804,626
                                                 ------------      ------------      ------------
Total Operating Expenses ...................       32,521,861        33,445,478        36,938,044
                                                 ------------      ------------      ------------

     Operating loss ........................       (2,555,263)       (1,816,594)       (6,215,664)

Interest expense ...........................         (314,211)         (279,206)         (273,383)

Interest income ............................           27,197            81,110           141,568
                                                 ------------      ------------      ------------

     Loss before income taxes ..............       (2,842,277)       (2,014,690)       (6,347,479)

Income tax benefit .........................         (150,000)         (145,980)       (2,574,000)
                                                 ------------      ------------      ------------

     Net loss ..............................     $ (2,692,277)     $ (1,868,710)     $ (3,773,479)
                                                 ============      ============      ============

     Basic and diluted loss per share ......     $      (0.45)     $      (0.32)     $      (0.65)
                                                 ============      ============      ============
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-3
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For the Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                                                 Accumulated Other
                                                        Common stock                                               Comprehensive
                                              ------------------------------      Additional                      Loss - Foreign
                                                Number of                          Paid-In         Retained     Currency Translation
                                                 Shares           Par Value        Capital         Earnings          Adjustment
                                              --------------------------------------------------------------------------------------
<S>                                              <C>            <C>              <C>              <C>               <C>
Balance at January 1, 2001 ..............        5,751,693      $     57,517     $ 24,138,687     $  8,572,943      $   (199,474)
Comprehensive income:
  Net loss ..............................               --                --               --       (3,773,479)               --
  Foreign currency translation adjustment               --                --               --               --           (21,775)

     Total comprehensive loss ...........       (3,795,254)
Stock options exercised .................           42,320               423          121,240               --                --
Issuances of common stock in connection
   with acquisitions of businesses ......           26,701               267          149,733               --                --
                                              ------------      ------------     ------------     ------------      ------------
Balance at December 31, 2001 ............        5,820,714            58,207       24,409,660        4,799,464          (221,249)
Comprehensive income:
  Net loss ..............................               --                --               --       (1,868,710)               --
  Foreign currency translation adjustment               --                --               --               --          (134,055)

     Total comprehensive loss ...........       (2,002,765)
Stock options exercised .................              700                 7            1,958               --                --
Issuances of common stock in connection
   with acquisitions of businesses ......          125,622             1,256          357,144               --                --
Treasury Stock Transaction ..............               --                --               --               --                --
                                              ------------      ------------     ------------     ------------      ------------
Balance at December 31, 2002 ............        5,947,036            59,470       24,768,762        2,930,754          (355,304)
Comprehensive income:
  Net loss ..............................               --                --               --       (2,692,277)               --
  Foreign currency translation adjustment               --                --               --               --             6,855

     Total comprehensive loss ...........       (2,685,422)
Stock options exercised .................            1,600                16            4,160               --                --
Issuances of common stock in connection
   with acquisitions of businesses ......           91,537               915          274,362               --                --
                                              ------------      ------------     ------------     ------------      ------------
Balance at December 31, 2003 ............        6,040,173      $     60,401     $ 25,047,284     $    238,477      $   (348,449)
                                              ============      ============     ============     ============      ============
</TABLE>


<TABLE>
<CAPTION>
                                                 Common             Total
                                                Stock in        Stockholders'
                                                Treasury           Equity
                                              ------------------------------
<S>                                           <C>               <C>
Balance at January 1, 2001 ..............     $         --      $ 32,569,673
Comprehensive income:
  Net loss ..............................               --        (3,773,479)
  Foreign currency translation adjustment               --           (21,775)
                                                                ------------
     Total comprehensive loss ...........               --                --
Stock options exercised .................               --           121,663
Issuances of common stock in connection
   with acquisitions of businesses ......               --           150,000
                                              ------------      ------------
Balance at December 31, 2001 ............               --        29,046,082
Comprehensive income:
  Net loss ..............................               --        (1,868,710)
  Foreign currency translation adjustment               --          (134,055)
                                                                ------------
     Total comprehensive loss ...........
Stock options exercised .................               --             1,965
Issuances of common stock in connection
   with acquisitions of businesses ......               --           358,400
Treasury Stock Transaction ..............         (199,934)         (199,934)
                                              ------------      ------------
Balance at December 31, 2002 ............         (199,934)       27,203,748
Comprehensive income:
  Net loss ..............................               --        (2,692,277)
  Foreign currency translation adjustment               --             6,855
                                                                ------------
     Total comprehensive loss ...........
Stock options exercised .................               --             4,176
Issuances of common stock in connection
   with acquisitions of businesses ......               --           275,277
                                              ------------      ------------
Balance at December 31, 2003 ............     $   (199,934)     $ 24,797,779
                                              ============      ============
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-4
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                      2003              2002            2001
                                                                                      ----              ----            ----
<S>                                                                                <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss ................................................................     $(2,692,277)     $(1,868,710)     $(3,773,479)
                                                                                   -----------      -----------      -----------
     Adjustments to reconcile net loss to net cash
        provided by operating activities:
     Depreciation and amortization ...........................................       2,448,483        2,605,804        3,571,943
     Allowance for doubtful accounts .........................................          28,003          299,177         (111,252)
     Loss on sale of subsidiary ..............................................              --               --          495,905
     Deferred income taxes ...................................................        (150,000)         245,000         (900,000)
     Equity loss from joint venture ..........................................         316,121          350,000          728,268
     Restructuring charge ....................................................         592,000               --          634,000
     Changes in assets and liabilities, net of acquisitions:
     Accounts receivable .....................................................        (675,087)       1,255,938        5,254,109
     Other assets ............................................................        (119,560)        (642,848)        (645,199)
     Prepaid expenses and other current assets ...............................         (81,677)         334,005         (263,908)
     Prepaid and refundable income taxes .....................................       1,579,147         (526,145)      (1,743,659)
     Accounts payable and accrued expenses ...................................        (713,284)       1,895,598       (1,364,740)
     Other liabilities .......................................................         (85,664)
     Income taxes payable ....................................................              --               --       (1,312,628)
                                                                                   -----------      -----------      -----------
          Net cash provided by operating activities ..........................         446,205        3,947,819          569,360
                                                                                   -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Cash paid on acquisitions ...............................................        (341,231)        (850,000)      (1,058,600)
     Capital contribution in joint venture ...................................              --         (250,000)        (500,000)
     Cash received for sale of subsidiary, net of cash included in assets sold              --               --           29,908
     Purchases of property and equipment .....................................      (1,708,714)      (1,353,126)      (2,187,756)
                                                                                   -----------      -----------      -----------
          Net cash used in investing activities ..............................      (2,049,945)      (2,453,126)      (3,716,448)
                                                                                   -----------      -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Advances on line of credit ..............................................         267,389          267,984        4,268,681
     Payments on line of credit ..............................................      (1,304,054)              --               --
     Proceeds from the issuance of common stock in connection
       with the exercise of stock options ....................................           4,176            1,965          121,663
     Repayments of long term debt ............................................         (45,291)         (55,067)        (105,438)
                                                                                   -----------      -----------      -----------
          Net cash provided by (used in) financing activities ................      (1,077,780)         214,882        4,284,906
                                                                                   -----------      -----------      -----------
          Net increase (decrease) in cash and cash equivalents ...............      (2,681,520)       1,709,575        1,137,818
Cash and cash equivalents at the beginning of year ...........................       6,389,650        4,680,075        3,542,257
                                                                                   -----------      -----------      -----------
Cash and cash equivalents at end of year .....................................     $ 3,708,130      $ 6,389,650      $ 4,680,075
                                                                                   ===========      ===========      ===========
</TABLE>

          See accompanying notes to consolidated financial statements


                                      F-5
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

Medialink  Worldwide  Incorporated  (the  "Company")  is a provider of worldwide
video and audio  production  and  distribution  services  and  public  relations
research  services  for  businesses  and  other   organizations   that  seek  to
communicate and evaluate their news through television,  radio, the Internet and
other media. Additionally,  through its subsidiary,  Teletrax, Ltd., the Company
is deploying a global video  tracking,  and monitoring  system.  The Company,  a
Delaware  corporation formed on September 24, 1986, is headquartered in New York
with offices in the United States and the United Kingdom.

The  consolidated   financial  statements  include  the  accounts  of  Medialink
Worldwide  Incorporated,  its  wholly  owned  subsidiaries  and  its  76%  owned
subsidiary,   Teletrax,  Ltd.  All  significant  intercompany  transactions  and
balances have been eliminated in consolidation.

Revenue Recognition

Revenue earned from the  distribution  and monitoring of video news releases and
the  distribution  of printed news releases is recognized in the period that the
release is  distributed.  Fees earned for  webcasts,  satellite  media tours and
other  live  events  and  the  production  of  video  news  releases  and  still
photographs  are recognized in the period that the services are performed.  Fees
earned from research  services are recognized using the percentage of completion
method. Fees earned from Teletrax(TM) are recognized over the period of service.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  requires  the  use  of  estimates  and  assumptions  by
management related to the reporting of assets and liabilities and the disclosure
of contingent  assets and  liabilities.  Actual  results could differ from these
estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of
three months or less, to be cash equivalents.

Property and Equipment

Property and  equipment,  recorded at cost, is  depreciated  on a  straight-line
basis over the estimated useful lives of the assets.  Leasehold improvements are
amortized  on a  straight-line  basis over the  shorter of the lease term or the
estimated  useful life of the asset.  The following  estimated  useful lives are
used for financial statement purposes:

         Office equipment                                          3-5 years
         Furniture and fixtures                                    10 years
         Leasehold improvements                                  5 to 10 years


                                      F-6
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Goodwill and Intangible Assets

Goodwill  represents  the excess of purchase  price and  related  costs over the
value assigned to the net tangible and intangible assets of businesses acquired.
In 2001,  goodwill  was  amortized  on a  straight-line  basis over its expected
useful life, not to exceed 40 years, and the Company  periodically  reviewed the
recoverability of goodwill and intangible assets. Effective January 1, 2002, the
Company  adopted the provisions of Financial  Accounting  Standards Board (FASB)
Statement of Financial  Accounting  Standards (SFAS) No. 142, Goodwill and Other
Intangible Assets,  which required us to cease amortizing goodwill and to assess
goodwill  for  impairment  at least  annually in the absence of an  indicator of
possible  impairment and immediately  upon an indicator of possible  impairment.
The annual impairment testing required by SFAS No. 142 also requires the Company
to use its  judgment  and could  require the Company to write down the  carrying
value of its goodwill and other intangible assets in future periods.

Other intangible assets,  including customer lists and covenants not to compete,
are being amortized on a  straight-line  basis over the term of the agreement or
the estimated future period of benefit, which ranges from 3 to 7 1/2 years.

The agreements  pursuant to which the Company acquired certain companies include
provisions that could require the Company to issue  additional cash or shares of
common  stock if  certain  performance  targets  are met.  The value of any such
additional  consideration  will  be  added  to  the  goodwill  related  to  such
acquisition.

Long-lived Assets

In accordance with SFAS 144,  long-lived  assets,  such as property,  plant, and
equipment,  and purchased intangibles subject to amortization,  are reviewed for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable.  Recoverability of assets to
be held and used is measured by a comparison of the carrying  amount of an asset
to  estimated  undiscounted  future cash flows  expected to be  generated by the
asset.  If the carrying  amount of an asset  exceeds its  estimated  future cash
flows,  an  impairment  charge is recognized by the amount by which the carrying
amount of the asset  exceeds the fair value of the asset.  Assets to be disposed
of would be separately  presented in the balance sheet and reported at the lower
of the  carrying  amount  or fair  value  less  costs to sell and are no  longer
depreciated.  The assets and liabilities of a disposed group  classified as held
for sale would be presented  separately in the  appropriate  asset and liability
sections of the balance sheet.

Major Customers

Revenues from one customer  amounted to approximately  14%, 14% and 11% of total
revenues in 2003, 2002 and 2001, respectively.

Investments in Affiliates

The Company  accounts for its investments in affiliates in which it owns between
20% and 50% of the voting stock and  possesses  significant  influence  over the
affiliate  under the equity  method.  Investments in affiliates are reviewed for
impairment  whenever events or changes in  circumstances  indicate that the fair
value of an investment is less than its carrying amount, and when such a loss in
value is determined to be other than temporary.


                                      F-7
<PAGE>

Foreign Currency Translation

The   financial   position  and  results  of  operations  of  the  Company's  UK
subsidiaries  are  measured  using local  currency as the  functional  currency.
Assets and liabilities of the entities have been translated at exchange rates on
the balance sheet date, and related revenue and expenses have been translated at
average monthly exchange rates. The aggregate effect of translation  adjustments
is reflected  as a separate  component of  shareholders'  equity in  accumulated
other  comprehensive loss until there is a sale or liquidation of the underlying
foreign investment.

Income Taxes

Income taxes are accounted for under the asset and  liability  method.  Deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributable to differences  between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and for operating
loss and tax credit  carryforwards.  Deferred  tax assets  and  liabilities  are
measured  using  enacted tax rates  expected  to apply to taxable  income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  The effect on deferred tax assets and  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date.

Valuation  allowances  are  established  when  necessary to reduce  deferred tax
assets to the amount expected to be realized.

Fair Value of Financial Instruments

The carrying amounts of cash, receivables, accounts payable, accrued liabilities
and borrowings on line of credit facility  approximate fair value because of the
short  maturity of these  instruments.  The carrying  amounts of long-term  debt
approximate  fair  value  as the  effective  rates  for  these  instruments  are
comparable to market rates at year-end.

Reclassifications

For  comparability,   certain  2002  amounts  have  been   reclassified,   where
appropriate, to conform to the financial statement presentation used in 2003.

Earnings per Share

Basic loss per share  ("EPS") is computed by dividing net loss  attributable  to
common stock by the weighted average number of common shares outstanding for the
period.  Diluted  EPS  reflects  the  potential  dilution  from the  exercise or
conversion of securities to common stock.  For the year ended December 31, 2003,
2002 and 2001 the Company had common  stock  equivalents  of 50,083,  64,349 and
32,075,  respectively,  related to stock  options  that were not included in the
computation  of EPS because  they were  antidilutive.  Weighted  average  shares
outstanding  used for computing EPS for the years ended December 31, 2003,  2002
and 2001 are as follows:

Weighted Average Shares Outstanding         2003         2002           2001
-----------------------------------         ----         ----           ----
         Basic and diluted               5,955,779     5,909,312     5,797,679


                                      F-8
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock-Based Compensation

In 2003,  2002,  and 2001,  the Company had two stock  option  plans,  which are
described  more  fully in Note 7. As  allowed by SFAS No.  123,  Accounting  for
Stock-Based  Compensation,  as amended by SFAS No. 148, the Company has retained
the  compensation  measurement  principles of Accounting  Principles Board (APB)
Opinion  No. 25,  Accounting  for Stock  Issued to  Employees,  and its  related
interpretations  for stock  options.  Under APB  Opinion  No.  25,  compensation
expense is recognized based upon the difference, if any, at the measurement date
between  the  market  value of the  stock and the  option  exercise  price.  The
measurement  date is the  date at which  both  the  number  of  options  and the
exercise price for each option are known.

If the  Company had elected to  recognize  compensation  cost at the grant date,
based on the fair  value of the  options  granted,  in 2003,  2002 and 2001,  as
prescribed  by SFAS 123, the Company's net loss and loss per share for the years
ended December 31, 2003,  2002 and 2001 would  approximate the pro forma amounts
as indicated below:

<TABLE>
<CAPTION>
                                                            For the year ended December 31,
                                                            -------------------------------
                                                      2003              2002               2001
                                                      ----              ----               ----
<S>                                                <C>               <C>              <C>
         Net loss - as reported                    $(2,692,277)      $(1,868,710)     $(3,773,479)
         Deduct:  total stock-based
           employee compensation expense
           determined under the fair
           value method, net of related tax
           effects                                    (259,000)         (110,000)         (64,200)
                                                   -----------       -----------      -----------
         Net loss - pro forma                      $(2,951,277)      $(1,978,710)     $(3,837,679)
                                                   ===========       ===========      ===========

         Basic and diluted EPS - as reported       $     (.45)       $     (.32)      $     (.65)
         Basic and diluted EPS - pro forma         $     (.50)       $     (.33)      $     (.66)
</TABLE>

The fair value of each grant is estimated using the Black-Scholes Option Pricing
Model  with the  following  assumptions:  dividend  yield of 0% for all  grants,
expected  volatility of 5% for 2003, 10% for 2002 and 71% for 2001 grants,  risk
free interest rates of 4.25% for 2003,  4.25% for 2002 and 4.50% for 2001 grants
and expected lives of 5 years for all grants.

Liquidity

The  Company has  suffered  recurring  losses for the  three-year  period  ended
December 31, 2003. At December 31, 2003, the Company was not in compliance  with
the minimum  tangible  net worth  covenant  under the  Company's  line of credit
agreement,  which was waived by the lender  through  April 15, 2004  through the
issuance of a forbearance.  The  forbearance  was extended  through  January 31,
2005. The covenants under the forbearance are discussed further in note 4. Based
on  its  2004  projections,  management  anticipates  that  it  will  remain  in
compliance  with these revised  covenants.  Should the company be unable to meet
its  projections,  management  will  take  appropriate  measures  in the  second
quarter,  which could include seeking alternative sources of funding,  including
the factoring of receivables or headcount reductions.


                                      F-9
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


EFFECTS OF RECENTLY ADOPTED ACCOUNTING STANDARDS

In June  2001,  the FASB  issued  SFAS 143,  "Accounting  for  Asset  Retirement
Obligations,"  which is  effective  January  1,  2003.  SFAS 143  addresses  the
financial  accounting and reporting for obligations and retirement costs related
to the retirement of tangible  long-lived  assets.  The adoption of SFAS 143 did
not have a significant impact on the Company's financial statements.

In April 2002, the FASB issued SFAS No. 145,  Rescission of FASB  Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections. SFAS
No. 145,  which is  effective  for fiscal  years  beginning  after May 15, 2002,
provides  guidance for income  statement  classification  of gains and losses on
extinguishment of debt and accounting for certain lease  modifications that have
economic effects that are similar to sale-leaseback  transactions.  The adoption
of  this  statement  did  not  have a  significant  impact  on our  consolidated
financial statements.

In July 2002, SFAS 146,  "Accounting for Costs  Associated with Exit or Disposal
Activities"  was issued.  This  Statement  addresses  financial  accounting  and
reporting for costs  associated  with exit or disposal  activities and nullifies
Emerging  Issues Task Force Issue  ("EITF")  94-3,  "Liability  Recognition  for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including Certain Costs Incurred in a Restructuring)." The principal difference
between SFAS 146 and EITF 94-3  relates to the timing of liability  recognition.
Under SFAS 146,  a  liability  for a cost  associated  with an exit or  disposal
activity is  recognized  when the  liability  is  incurred.  Under EITF 94-3,  a
liability for an exit cost was recognized at the date of an entity's  commitment
to an exit plan.  The  provisions of SFAS 146 are effective for exit or disposal
activities  that are  initiated  after  December 31, 2002.  The adoption of this
statement did not have a significant impact on the Company's  financial position
or results of operations.

In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others." FIN 45  elaborates  on the existing  disclosure  requirements  for most
guarantees,  including  residual value  guarantees  issued in  conjunction  with
operating lease agreements.  It also clarifies that at the time a company issues
a guarantee,  the company must recognize an initial liability for the fair value
of the  obligation  it  assumes  under that  guarantee  and must  disclose  that
information  in  its  interim  and  annual  financial  statements.  The  initial
recognition  and  measurement   provisions  apply  on  a  prospective  basis  to
guarantees   issued  or  modified   after  December  31,  2002.  The  disclosure
requirements are effective for financial statements of interim or annual periods
ending  after  December  15,  2002.  The  adoption  of  FIN 45  did  not  have a
significant impact on our financial position and results of operations.

2.       Property and Equipment

Property and equipment, at cost, consists of:

                                                            December 31,
                                                        2003             2002
                                                        ----             ----

         Office equipment and software                $9,573,474     $7,472,254
         Furniture and fixtures                        1,406,316      1,409,793
         Leasehold improvements                        3,744,499      3,696,943
                                                      14,724,289     12,578,990
         Less accumulated depreciation
              and amortization                        (8,924,219)    (6,689,150)
                                                      ----------     ----------
         Property and equipment, net                  $5,800,070     $5,889,840
                                                      ==========     ==========

Depreciation  and  amortization  expense was $2,164,484 and $1,590,951 the years
ended December 31, 2003 and 2002, respectively.


                                      F-10
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3.       Business Transactions

(a)      Acquisitions, Goodwill and Other Intangibles

On June 16, 1997 the Company acquired certain assets of Corporate TV Group, Inc.
("CTV"), a provider of strategic video  communications to corporations and other
organizations  for internal and external  audiences.  As  consideration  for the
purchase, the Company paid $3.55 million in cash and issued 37,037 shares of the
Company's common stock valued at $333,333.  Earn-out  provisions allow for up to
an  additional   $6.2  million  to  be  paid  based  upon  certain  revenue  and
profitability targets through 2002. Assuming the targets are met, the additional
consideration  will be paid in the form of cash and the Company's  common stock,
as specified in the agreement.  Through  December 31, 2003  approximately  $6.02
million  of  additional  consideration  has been  recorded  under  the  earn-out
provision.  Additionally,  in connection with this acquisition, the Company paid
$300,000 to the stockholder of CTV for a non-compete  agreement which expires in
2004.  This  amount  has  been  recorded  as an  intangible  asset  and is being
amortized using the straight-line method over the term of the agreement.

During  1999 the Company  made an  acquisition  of a  news-related  company.  As
consideration  for this  purchase,  the Company  paid $1.26  million in cash and
55,348  shares  of the  Company's  common  stock  valued at  $800,000.  Earn-out
provisions  allow  for  additional  payments  of  purchase  price of up to $1.50
million,  based on reaching certain profitability levels, to be paid in the form
of cash and the  Company's  common stock as specified in the  agreement,  over a
period of three years.  Through  December 31, 2003 $1.50  million of  additional
consideration has been recorded under the earn-out provisions.  Additionally, in
connection with  acquisition,  the Company entered into covenants not to compete
with two of the significant shareholders with terms of five years.

Two executive officers of the Company had an interest in one of the acquisitions
aggregating  approximately  20%.  In  order to avoid  an  apparent  conflict  of
interest,  an  independent  member of the Board of Directors and an  independent
employee negotiated the agreement.

At December  31, 2003 there were no  potential  additional  earn-out  provisions
outstanding on any of the Company's acquisitions.

All of the above  acquisitions have been accounted for under the purchase method
of  accounting  and the  results of  operations  of the  acquisitions  have been
included  in the  consolidated  statements  of  operations  from  the  dates  of
acquisition.  As of December 31, 2003 the aggregate  purchase  price,  including
acquisition costs and amounts paid as a result of earn-out agreements,  exceeded
the estimated fair value of the total net assets  acquired by $19.70 million for
all of the  acquisitions.  Of this  amount  $4  million  has been  allocated  to
customer  lists  and has  been  fully  amortized  and  $15.70  million  has been
allocated to goodwill.

In March 2001 the Company sold a component of its UK photography business and as
a  result  incurred  a  loss  from  the  sale  of  a  subsidiary   amounting  to
approximately $496,000.


                                      F-11
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company adopted SFAS No. 142, on January 1, 2002.  This standard  prescribes
the accounting  treatment for both  identifiable  intangibles and goodwill after
initial recognition. Upon adoption of the standard, amortization of goodwill and
indefinite life intangibles  ceased and accumulated  amortization as of December
31, 2001 reduced the carrying value of these assets. Periodic impairment testing
of these  assets is now  required.  Definite  life  intangibles  continue  to be
amortized over their useful lives.

As of  January  1, 2002,  the date of  adoption,  the  Company  had  unamortized
goodwill and other intangible assets in the amount of $11.58 million,  which was
subject  to the  transition  provisions  of SFAS 141 and SFAS 142.  Amortization
expense related to goodwill and other intangible assets of continuing operations
was $1.91 million for the year ended December 31, 2001.

The following provides pro-forma  information as if the financial  statements in
all periods presented were accounted for in accordance with SFAS 142:

<TABLE>
<CAPTION>
                                                         For the Year Ended December 31,
                                                         ------------------------------
                                                  2003              2002                2001
                                                  ----              ----                ----
<S>                                           <C>               <C>                 <C>
         Reported net loss                    $(2,692,277)      $(1,868,710)        $(3,773,479)

         Add back: Goodwill amortization               --                --             874,654
                                              -----------       -----------         -----------
         Adjusted net loss                    $(2,692,277)      $(1,868,710)        $(2,898,825)
                                              ===========       ===========         ===========

Reported basic loss per share                      $(0.45)           $(0.32)            $(0.65)
Add back: Goodwill amortization                        --                --               0.15
                                                   ------            ------             ------
         Adjusted basic loss per share             $(0.45)           $(0.32)            $(0.50)
                                                   ======            ======             ======
</TABLE>



                                      F-12
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                          December 31, 2003                            December 31, 2002
                                ----------------------------------          -----------------------------------
                                           (in thousands)                                (in thousands)

                                     Gross                                      Gross
                Amortization       Carrying     Accumulated                   Carrying     Accumulated
                   Period           Amount     Amortization     Net            Amount     Amortization      Net
                   ------           ------     ------------     ---            ------     ------------      ---
<S>               <C>                <C>         <C>          <C>              <C>           <C>          <C>
Customer List     5 years            $4,000      $(4,000)     $  --            $4,000        $(4,000)     $   --
Non-competes      4-7.5 years           500         (440)        60               500           (360)        140
                                     ------      -------      -----            ------        -------      ------
Total                                $4,500      $(4,440)       $60            $4,500        $(4,360)     $  140
                                     ======      =======      =====            ======        =======      ======
</TABLE>

Aggregate  amortization  expense for the years ended  December 31, 2003 and 2002
was $79,997 and $490,196, respectively.



Estimated future amortization expense is as follows:

           For the year ended December 31, 2004             $60,000
                                                            -------

           Total estimated amortization                     $60,000
                                                            =======


(b)      Joint Venture

On August 1, 1999 the Company entered into a joint venture with Business Wire to
form Business Wire/Medialink,  LLC ("Newstream"),  for the purpose of connecting
its clients to  multimedia  Internet news sites as  Newstream.com.  The Company,
which has a 50%  interest in the joint  venture,  accounts  for its  interest in
Newstream under the equity method, as it does not have a controlling interest in
the  entity.  During  2002 and  2001  each  member  made an  additional  capital
contribution of $250,000 and $500,000, respectively. No additional contributions
were made in 2003.


                                      F-13
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following is selected financial data of Newstream at December 31:

                                            2003         2002            2001
                                            ----         ----            ----

Balance Sheet Data:

Total current assets                     $1,147,000    $1,310,000      $813,000
Total assets                              1,764,000     2,350,000     2,277,000
Total current liabilities                 1,616,000     1,587,000     1,351,000
Total liabilities and members equity      1,764,000     2,350,000     2,277,000

Operating Data:

Revenues                                  1,186,000     1,164,000     1,137,000
Operating loss                             (615,000)     (665,000)   (1,461,000)
Net loss                                   (614,000)     (663,000)   (1,457,000)

Approximately  $541,000,  $501,000 and  $497,000 of total  revenue for the joint
venture was generated by the Company in 2003, 2002 and 2001, respectively.

The Company also allocates  certain  expenses to the joint venture for personnel
and other direct, general and administrative costs incurred on its behalf. Total
assessments amounted to $781,000,  $683,000 and $959,000 in 2003, 2002 and 2001,
respectively.  The balance  outstanding  at  December  31,  2003,  2002 and 2001
relating to these  assessments  amounted to  $678,000,  $663,000  and  $919,000,
respectively and are included in prepaid expenses and other current assets.


4.       Line of Credit - Bank

The Company has a line of credit  facility with a bank,  allowing for borrowings
of up to $7.50 million  through April 15, 2004.  Loans under the Credit Facility
bear  interest at the 30-Day  LIBOR Rate (1.12% at December 31, 2003) plus 2.25%
through 3.25%, per annum, as defined.

The Company is subject to a line fee of $37,500  for the period from  January 1,
2003 through April 15, 2004.

Covenants under the line of credit agreement require the Company to meet certain
financial  ratios,  including  minimum  tangible net worth and minimum  earnings
before interest, taxes, depreciation, amortization and other charges, as defined
in the  agreement.  At December 31, 2003 the Company was not in compliance  with
the  minimum  tangible  net worth  covenant  which has been waived by the lender
through  April 15, 2004 through the issuance of a  forbearance.  In  conjunction
with the  forbearance,  the lender  required  the  Company  pay down its line of
credit by $500,000,  reduce the maximum  borrowings  under the facility to $5.00
million  and  put  into  place  minimum  cash  balance  and  limits  on  capital
expenditure covenants, as defined.


                                      F-14
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Subsequent to December 31, 2003 the bank issued an additional  forbearance  (The
"Forbearance")  expiring  January 31, 2005. The Forbearance  reduces the maximum
line to the lower of $4.00  million,  $3.75  million,  $3.50  million  and $3.00
million at April 15, 2004, July 1, 2004,  October 1, 2004 and December 31, 2004,
respectively,  or 80% of  eligible  accounts  receivable  balances,  as defined.
Interest  under the  Forbearance  is  payable  monthly at the rate of the 30-Day
LIBOR Rate plus 5.5% per annum.  Covenants under the Forbearance  include limits
on capital expenditures,  minimum earnings before interest,  taxes, depreciation
and  amortization  and minimum  tangible net worth, as defined in the agreement.
Additionally,  the  Forbearance  requires  the  Company to obtain  financing  by
January 15, 2005 to support Teletrax(TM)'s operations.

The Company is subject to a forbearance fee of $30,000 for the period from April
15, 2004 through January 31, 2005.

Substantially  all of the assets of the Company are pledged as collateral  under
the credit facility.


5.       Long-term Debt:

As of December 31, debt consisted of:

                                                         2003            2002
                                                         ----            ----

         Capitalized lease                              $269,248      $ 285,482
         Note payable                                         --         45,291
         Less: current portion                            96,248        113,773
                                                        --------      ---------
         Long-term debt, net of current portion         $173,000      $ 217,000
                                                        ========      =========

The capitalized  lease is payable in quarterly  installments  of $29,666,  which
includes  principal and interest at the rate of 10.8% per annum  through  August
2006.

At December  31, 2003 and 2002,  the gross amount of the  equipment  and related
accumulated depreciation recorded under the capital lease was as follows:

                                                         2003           2002
                                                         ----           ----

         Equipment                                      $324,443       $324,443
         Less accumulated depreciation                   (64,337)       (31,440)
                                                        --------       --------
                                                        $260,106       $293,003
                                                        ========       ========

Depreciation   of  equipment  held  under  the  capital  lease  is  included  in
depreciation and amortization expense.

The note was  payable  in  quarterly installments  of  $15,507,  which  includes
principal and interest at a rate of 8% per annum through July 2003.



                                      F-15
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6.       Stockholders' Equity:

In 2003,  2002 and 2001 the Company  issued 91,537  shares,  125,622  shares and
26,701 shares, respectively,  of common stock as consideration for acquisitions.
The fair value of the common stock was determined  based on the average  trading
price,  over various periods,  of the Company's common stock at the times of the
respective acquisitions.

During 2001 the Board of Directors  implemented  a Preferred  Stock Rights Plan.
Under the  Rights  Plan,  the Board  declared  a  dividend  distribution  of one
preferred stock purchase right for each outstanding share of common stock of the
Company,  payable to  shareholders  of record at the close of business on August
30, 2001.  The Rights will continue to be  represented  by, and trade with,  the
Company's common stock certificates  unless the Rights become  exercisable.  The
Rights become  exercisable  (with certain  exceptions)  only in the event that a
person or group  acquires,  or  announces  a tender or  exchange  offer for,  15
percent or more of the Company's shares outstanding or the total voting power of
the Company.

In July 2002 the Company  received  57,124  shares of Medialink  common stock as
payment for loan  balances  due from a former  officer of the  Company  totaling
$199,934. The shares valued at $3.50 per share on the date of the agreement have
been recorded as treasury stock at December 31, 2003 and 2002.


7.       Employee Compensation Plans

The Company provides an incentive and nonqualified stock option plan (the "Stock
Option Plan") for employees and other  eligible  participants.  The option price
for all incentive stock options is the fair market value of the Company's common
stock on the date of grant,  except for  employees  owning  more than 10% of the
outstanding  common stock of the Company.  The option price for employees owning
more than 10% of the outstanding common stock of the Company may be no less than
110% of the fair market value of the shares on the date of the option grant. The
stock options vest over a period of four years and have a term of ten years. The
number of  options  to be  granted  and  option  prices  are  determined  by the
Compensation Committee of the Board of Directors in accordance with the terms of
the Stock Option Plan. The Company has reserved  1,670,808  shares of authorized
common stock for issuance  under this plan.  As of December 31, 2003 the Company
had 343,907 shares available for grant.


                                      F-16
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


Activity in the Stock Option Plan is as follows:

                                                Shares Under    Weighted Average
                                                   Option        Exercise Prices
                                                ------------    ----------------

         Outstanding at January 1, 2001             874,861           $7.78
            Granted                                 336,732           $3.30
            Exercised                               (39,920)          $2.91
            Canceled                               (178,407)          $8.49
                                                    -------
         Outstanding at December 31, 2001           993,266           $6.38
                                                    =======
         Exercisable at December 31, 200
            through 2011                            634,143           $6.87
                                                    =======

         Outstanding at January 1, 2002             993,266           $6.38
            Granted                                 293,100           $2.61
            Exercised                                  (700)          $2.81
            Canceled                               (150,941)          $6.65
                                                  ---------
         Outstanding at December 31, 2002         1,134,725           $4.65
                                                  =========
         Exercisable at December 31, 200
            through 2012                            702,941           $6.52
                                                    =======

         Outstanding at January 1, 2003           1,134,725           $4.65
            Granted                                  13,000           $2.79
            Exercised                                (1,600)          $2.61
            Canceled                               (107,614)          $4.40
                                                  ---------
         Outstanding at December 31, 2003         1,038,511           $5.47
                                                  =========
         Exercisable at December 31, 2003
            through 2013                            791,012           $6.28
                                                    =======


The Following table summarizes information about stock options outstanding under
the Stock Option Plan at December 31, 2003:

<TABLE>
<CAPTION>
                                               Outstanding                                  Exercisable
                              ---------------------------------------------    --------------------------------------
                                                Weighted          Weighted
            Range of                             Average           Average                             Weighted
            Exercise            Number          Remaining         Exercise        Number                Average
             Prices           Outstanding         Life              Price       Exercisable            Exercise Price
           ----------------------------------------------------------------------------------------------------------
<S>                           <C>              <C>                 <C>            <C>                      <C>
         $2.61-8.24             821,186        5.75 years          $ 3.46         573,687                  $ 3.70
         $8.25-13.87            130,000        4.88 years          $11.10         130,000                  $11.10
         $13.88-19.50            87,325        4.57 years          $16.00          87,325                  $16.00
                              ---------                                           -------
Outstanding
December 31, 2003             1,038,511                                           791,012
                              =========                                           =======
</TABLE>


                                      F-17
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company provides a stock option plan for its directors (the "Director Plan")
for the granting of options to  non-employee  members of the Company's  Board of
Directors to purchase  shares of the  Company's  common  stock.  The Company has
reserved  180,000 shares of authorized  common stock for the issuance under this
plan.  The option price under the Director  Plan shall not be less than the fair
market  value of such  share of  common  stock on the date of  grant.  Under the
Director Plan,  options issued vest over a three year period and are exercisable
at such times as  determined by the Company but no later than 15 years after the
date of the grant.

Under the Director Plan,  options to purchase 28,000 share at exercise prices of
$2.61 and $3.59 and 18,000  shares at the  exercise  price of $4.38 were  issued
during 2002 and 2001, respectively.  These options expire 10 years from the date
of grant;  however,  upon termination of board  membership of any director,  the
options will expire 12 months after the termination  date, but no later than the
expiration  date. No options were exercised under the Director Plan during 2003,
2002 or 2001.  Non-employee directors are also eligible for additional grants of
3,000  shares  per year  provided  they  continue  to serve the  Company in that
capacity. Such future grants would become exercisable over a three-year period.

Activity in the Stock Option Plan is as follows:

                                               Shares Under    Weighted Average
                                                  Option        Exercise Prices
                                               ------------    ----------------

         Outstanding at January 1, 2001            134,000           $9.61
           Granted                                  18,000           $4.38
           Exercised                                    --
           Canceled                                     --
                                                   -------
         Outstanding at December 31, 2001          152,000           $8.99
                                                   =======
         Exercisable at December 31, 2001
            through 2011                           109,333           $9.54
                                                   =======

         Outstanding at January 1, 2002            152,000           $8.99
            Granted                                 28,000           $7.77
            Exercised                                   --
                                                        --
                                                   -------
         Outstanding at December 31, 2002          180,000           $8.05
                                                   =======
         Exercisable at December 31, 2002
            through 2012                           136,666           $9.43
                                                   =======

         Outstanding at January 1, 2003            180,000           $8.05
            Granted                                     --
            Exercised                                   --
            Canceled                                    --
                                                   -------
         Outstanding at December 31, 2003          180,000           $8.05
                                                   =======
         Exercisable at December 31, 2003
            through 2012                           155,333           $8.80
                                                   =======



                                      F-18
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes information about stock options outstanding under
the Director Plan at December 31, 2003:

<TABLE>
<CAPTION>
                                               Outstanding                                  Exercisable
                              --------------------------------------------      --------------------------------
                                                 Weighted         Weighted
            Range of                             Average           Average                           Weighted
            Exercise            Number          Remaining         Exercise        Number              Average
             Prices           Outstanding         Life              Price       Exercisable       Exercise Price
          ------------------------------------------------------------------------------------------------------
<S>                             <C>             <C>                <C>             <C>                <C>
         $2.61-8.20             112,000         10.45 years        $ 4.59          87,333             $ 4.77
         $8.21-13.79             40,000          8.48 years        $11.11          40,000             $11.11
         $13.80-19.38            28,000          9.78 years        $17.53          28,000             $17.53
                               --------                                          --------
Outstanding
December 31, 2003               180,000                                           155,333
                                =======                                           =======
</TABLE>


8.       Commitments

(a)      Leases

The Company has various  non-cancelable  operating  leases for office space that
expire in 2010.  Future minimum payments under operating leases consisted of the
following at December 31, 2002:

           For the year ending December 31,
           --------------------------------
                  2004                                            3,140,000
                  2005                                            3,259,000
                  2006                                            3,167,000
                  2007                                            2,521,000
                  2008                                            2,121,000
                  Thereafter                                      2,917,000
                                                                -----------
                        Total minimum lease payments            $17,125,000
                                                                ===========

Rent  expense  under  operating  leases  amounted to  approximately  $3,042,000,
$3,211,000 and $3,414,000 for the years ended December 31, 2003,  2002 and 2001,
respectively.

(b)      Employment Agreements

The Company has entered  into  employment  agreements  with  various  executives
expiring  through  December 31, 2003.  Future minimum  payments,  including base
salary and  minimum  bonuses,  related to these  agreements,  are  approximately
$3,138,000 in 2004.


                                      F-19
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(c)      Advisory Charges

In August 2001 the  Company  received an  unsolicited  takeover  bid from United
Business Media plc to purchase all of its issued and outstanding  common shares.
In  connection  with this  unsolicited  offer the  Company  retained a financial
advisor  and  other  professionals  to  assist  the  Company  in  analyzing  and
considering  the  unsolicited  offer  and the  various  strategic  opportunities
available to the Company to maximize  shareholder  value. The unsolicited  offer
has been withdrawn.  The terms of the amended agreement provide that the Company
pay the  financial  advisor  $1,600,000  not including  expenses.  The agreement
expired in August 2002 with no transaction  transpiring  and,  accordingly,  the
remaining  balance due under the agreement was charged to operations  during the
2002. For the years ended  December 31, 2002 and 2001,  $1,200,000 and $400,000,
respectively,  were charged to operations  related to this amended agreement and
included in advisory charges.


9.       Accrued Expenses and Other Current Liabilities

Accrued  expenses  and other  current  liabilities  consist of the  following at
December 31:

                                                      2003              2002
                                                      ----              ----

         Production costs                           $1,278,249       $1,856,785
         Deferred revenue                              801,981          417,935
         Salary and related                            741,421          738,027
         Selling, general and administrative           292,524          229,868
         Professional fees                             235,004          224,806
         Earn-out provision on acquisition                  --          262,000
         Other                                         599,630          639,291
                                                    ----------       ----------
                                                    $3,948,809       $4,368,712
                                                    ==========       ==========

10.      Income Taxes:

The provision (benefit) for income taxes consists of the following components:

                                           For the Year Ended December 31,
                                       -------------------------------------
                                       2003            2002           2001
                                       ----            ----           ----

         Current:
            Federal                  $      --      $(385,000)    $(1,558,000)
            State and local                 --         (5,980)       (116,000)
                                     ---------      ---------     -----------
                                            --       (390,980)     (1,674,000)
                                     ---------      ---------     -----------
         Deferred:
            Federal                   (185,000)       180,000        (375,000)
            State and local             35,000         65,000        (525,000)
                                     ---------      ---------     -----------
                                      (150,000)       245,000        (900,000)
                                     ----------     ---------     -----------
                                     $(150,000)     $(145,980)    $(2,574,000)
                                     =========      =========     ===========


                                      F-20
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The  difference  in income tax  benefit  between the amount  computed  using the
statutory federal income tax rate and the Company's effective tax rate is due to
the following:

<TABLE>
<CAPTION>
                                                                  For the Year Ended December 31,
                                                                ---------------------------------
                                                                2003           2002          2001
                                                                ----           ----          ----
<S>                                                           <C>            <C>         <C>
         Income tax benefit at statutory rate                 $(966,000)     $(685,000)  $(2,158,000)
         Increase (decrease) in income taxes resulting
            from:
             State and local income taxes, net of Federal
                income tax benefit (provision)                   23,000         68,000      (423,000)
             Valuation allowance on foreign operating
                loss carryforward                               712,000        252,000            --
             Non-deductible expenses and other                   81,000        219,020         7,000
                                                              ---------      ---------   -----------
                                                              $(150,000)     $(145,980)  $(2,574,000)
                                                              =========      =========   ===========
</TABLE>

The tax effect of temporary  differences that give rise to significant  portions
of the deferred tax assets are as follows:

                                                          As of December 31,
                                                      -----------------------
                                                      2003               2002
                                                      ----               ----

         Allowance for doubtful accounts           $  199,000        $  199,000
         Depreciation and amortization of
            property and equipment                     63,000            63,000
         Amortization of intangibles                  456,000           992,000
         Accrued loss on sublease                     161,000
         Net operating loss carry forwards          1,889,000           652,000
         Capital loss carryforward                    200,000           200,000
                                                   ----------         ---------
            Total gross deferred tax assets         2,968,000         2,106,000
               Less valuation allowance              (964,000)         (252,000)
                                                   ----------         ---------

                                                   $2,004,000        $1,854,000
                                                   ==========        ==========

The Company  has a US federal net  operating  loss carry  forward  approximating
$1,362,000  expiring in 2023.  The Company has a capital  loss  carryforward  of
approximately  $500,000,  expiring  in 2006,  that can be used to offset  future
capital gains. The Company also has net operating loss  carryforwards  for state
and local tax purposes of  approximately  $6.8 million  expiring  through  2018.
Additionally,  the Company  has  foreign  loss  carryforwards  of  approximately
$2,700,000 related substantially to the loss generated by Teletrax(TM),  its 76%
owned  foreign  subsidiary.  The foreign loss  carryforwards  have no expiration
date.  The ultimate  realization  of deferred  tax assets is dependent  upon the
generation of future taxable income during the periods in which those  temporary
differences become  deductible.  Management  considers  projected future taxable
income and tax planning strategies in making this assessment. Due to the limited
historical  results of Teletrax(TM) and management's  limited ability to project
future  results,  the Company has  recorded a  valuation  allowance  of $833,000
related to the foreign deferred tax asset generated by its UK tax losses.  Based
on the historical  taxable income and projections for future taxable income,  of
the Company's domestic operations, over the periods that the deferred tax assets
are deductible,  management believes it is more likely than not that the Company
will realize the remaining deferred tax assets.


                                      F-21
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11.      Segment Information

Management  considers all of the Company's  products and services to be included
as a single operating segment,  therefore,  the disclosure  requirements of SFAS
131 consist only of segment information by geographic location.

A summary  of the  Company's  operations  by major  geographic  location  are as
follows for the years ended December 31,

<TABLE>
<CAPTION>
                                      2003                             2002                          2001
                                      ----                             ----                          ----

                               US              UK                US             UK             US           UK
                               --              --                --             --             --           --
<S>                        <C>             <C>               <C>            <C>           <C>            <C>
Revenues:
  External clients         $39,594,783     $4,458,801        $40,188,739    $7,175,981    $40,397,272    $8,022,861
  Inter-segment                192,000        249,000            917,000       727,000        330,000       636,000
                          ------------     -----------       -----------    ----------   ------------    ----------
    Total revenues         $39,786,783     $4,707,801        $41,105,739    $7,902,981    $40,067,272    $8,658,861
                          ============     ==========        ===========    ==========    ===========    ==========

Total assets               $32,987,950     $3,723,935        $37,482,424    $3,599,910    $38,243,355    $2,569,198
                          ============     ==========        ===========    ==========    ===========    ==========
</TABLE>


12.      Supplemental Cash Flow Information:

Cash paid  (recieved)  for  interest  and income  taxes  during the years  ended
December 31, 2003, 2002 and 2001 was as follows:

                                       2003             2002          2001
                                       ----             ----          ----

         Interest                  $   314,000        $279,000      $  273,000
                                   ===========        ========      ==========

         Income Taxes              $(1,580,000)       $135,000      $1,378,000
                                   ===========        ========      ==========



Non-cash  investing and financing  activities  for the years ended  December 31,
2003, 2002 and 2001 were as follows:

<TABLE>
<CAPTION>
                                                        2003            2002         2001
                                                        ----            ----         ----
<S>                                                    <C>           <C>           <C>
         Common stock issued in connection with
            acquisitions                               $275,000      $358,000      $  150,000
                                                        =======       =======       =========


         Treasury stock  redeemed in connection
           with satisfaction of note receivable        $     --      $200,000      $       --
                                                       ========      --------      ==========

         Accrued earn-out provision                    $     --      $262,000      $  208,000
                                                       ========      ========      ==========
</TABLE>


                                      F-22
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13.      401(k) Plan:

The Company maintains a qualified 401(k) plan (the "Plan") covering all eligible
employees.  Eligible employees may make elective salary reduction  contributions
to the Plan of up to 15% of their annual compensation, subject to a dollar limit
established by law. In addition,  the Company may provide, in its discretion,  a
matching  contribution  equal to a percentage  of the  employee's  contribution.
Participants are fully vested at all times in the amounts they contribute to the
Plan.  Only  participants  who have  completed a year of service during the Plan
year and are  actively  employed  on the last day of such year are vested in the
Company's   matching   contributions  for  such  year.  The  Company's  matching
contributions  amounted to approximately $128,000 in 2001. There was no matching
contribution made by the Company in 2003 or 2002.


14.      Allowance for Doubtful Accounts:
                                                       2003              2002
                                                       ----              ----

        Balance at beginning of year                 $ 655,417      $ 356,240
        Direct write-offs                              (88,248)       (18,040)
        Additional charges to costs and expenses       116,251        317,217
                                                     ---------      ---------
        Balance at the end of year                   $ 683,420      $ 655,417
                                                     =========      =========


15.     Quarterly Results of Operations (Unaudited):

<TABLE>
<CAPTION>
                                                           (In thousands of dollars, except per share data)

                                                                            For the Quarter Ended
                                                  -----------------------------------------------------------------
                                                       March 31,       June 30,        September 30,    December 31,
                                                         2003            2003              2003            2003
                                                         ----            ----              ----            ----

<S>                                                    <C>               <C>              <C>               <C>
         Revenues                                      $10,961           $11,693          $10,321           $11,079
         Gross profit                                    7,412             7,858            7,085             7,613
         Operating loss                                   (689)             (633)          (1,146)              (86)
         Net loss                                         (678)             (598)          (1,068)             (347)
         Basic and diluted loss per share                (0.11)            (0.10)           (0.18)            (0.06)

                                                                             For the Quarter Ended
                                                  -----------------------------------------------------------------
                                                       March 31,       June 30,        September 30,    December 31,
                                                         2002            2002              2002            2002
                                                         ----            ----              ----            ----

         Revenues                                      $11,075           $12,785          $11,376           $12,129
         Gross profit                                    7,195             8,216            7,713             8,505
         Operating income (loss)                          (964)             (121)          (1,251)              519
         Net income (loss)                                (698)             (244)            (993)               66
         Basic and diluted earnings (loss) per share     (0.12)            (0.04)           (0.17)             0.01
</TABLE>

                                      F-23
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


16.      Restructuring Charges :

In September  2003 the Company  entered  into an  agreement  to sublease  excess
office space in its Norwalk,  CT location.  The sublease  resulted in a $592,000
restructuring  charge to  operations  in the 3rd quarter of 2003  calculated  as
follows:


                  Present value of current lease obligation        $1,010,000
                  Present value of sublet rental income              (491,000)
                  Costs incurred in connection with agreement          73,000
                                                                   ----------
                  Net restructuring charge                            592,000
                  Less: utilization during 2003                       (36,664)
                                                                   ----------
                  Balance at December 31, 2003                        555,336
                  Less: current portion                              (163,000)
                                                                   ----------
                  Balance at December 31, 2003, net of
                     current portion                               $  392,336
                                                                   ==========

Both the existing lease and sublease expire in February 2008.


In March 2001 the Company combined its U.S. and international broadcast services
into a Global Broadcast Services unit. The corporate  reorganization is designed
to  accelerate  the  growth of its  broadcast  services  business.  The  Company
incurred a charge of $420,000 as a result of the restructuring. Additionally, in
September  2001 the  Company  reduced  its  staff in the UK and US  incurring  a
restructuring  charge  of  $214,000.  The  total  charges  aggregating  $634,000
included severance and related payments to terminated employees of approximately
$430,000.  Through  December  31,  2001  approximately  $524,000  of  the  total
restructuring  charges have been paid and the remaining balance of approximately
$110,000 was included in accrued expenses. The remaining balance was paid during
2002.

                                      F-24
<PAGE>


ITEM 9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE.

         None.

ITEM 9A. CONTROLS AND PROCEDURES.

Within 90 days prior to the date of this report,  we carried out an  evaluation,
under the supervision and with the participation of our chief executive officer,
principal   accounting  officer  and  principal   financial   officer,   of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on this evaluation,  our chief executive  officer,  principal
accounting officer and principal financial officer concluded that our disclosure
controls and  procedures,  as of the date of the  evaluation,  are  effective in
timely  alerting  them to  material  information  required to be included in our
periodic  SEC  reports.  It should  be noted  that the  design of any  system of
controls  is based in part upon  certain  assumptions  about the  likelihood  of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all potential future conditions,  regardless of
how remote.

In  addition,  we  reviewed  our  internal  controls,  and  there  have  been no
significant   changes  in  those   controls  or  in  other  factors  that  could
significantly  affect  those  controls  subsequent  to the  date of  their  last
evaluation.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information  regarding  directors of the Company who are standing for reelection
is set forth under  "Election of Directors" in the  Company's  Definitive  Proxy
Statement  to be filed  within 120 days after the  Company's  fiscal  year ended
December 31, 2003 (the "Proxy  Statement"),  which  information is  incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

Information regarding the Company's compensation of its named executive officers
is set forth under "Executive  Compensation"  in the Company's  Definitive Proxy
Statement,  which information is incorporated  herein by reference.  Information
regarding  the  Company's  compensation  of its  directors  is set  forth  under
"Directors'   Compensation"  in  the  Proxy  Statement,   which  information  is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information  regarding  security  ownership  of  certain  beneficial  owners and
management  is set forth under  "Common  Stock  Ownership of Certain  Beneficial
Owners and Management" in the Company's Proxy  Statement,  which  information is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information  regarding  certain  relationships  and related  transactions is set
forth under "Certain  Relationships  and Related  Transactions" in the Company's
Proxy Statement, which information is incorporated herein by reference.

                                       26
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The  information  required by this Item 14  regarding  the  Company's  principal
accounting  fees and  services  is  incorporated  herein by  reference  from the
information  provided under the heading "Proposal 3: Ratification of Independent
Auditors" of the Company's  Definitive  Proxy Statement  anticipated to be dated
April 28, 2004.


                                    PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a)      Exhibits:

         31.      Certifications  pursuant to Section 302 of the  Sarbanes-Oxley
                  Act of 2002.


         32.      Certification pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


         (b)      Report on Form 8-K:

                  Report on Form 8-K dated February 29, 2003 regarding  expected
                  losses  from its  subsidiary  Teletrax(TM)  for the year ended
                  December 31, 2003 and expected capital expenditures during the
                  year ended December, 31, 2003.

                  Report on Form 8-K dated April 29, 2003 regarding earnings for
                  the first quarter ended March 31, 2003.

                  Report on Form 8-K dated July 29, 2003 regarding  earnings for
                  the second quarter ended June 30, 2003.

                  Report on Form 8-K dated October 28, 2003  regarding  earnings
                  for the third quarter ended September 30, 2003.

                                       27
<PAGE>

                                                                     Page Number

(a) 1. FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS OF MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES

Independent Auditors' Report                                                F-1

Consolidated Balance Sheets as of December 31, 2003 and
December 31, 2002                                                           F-2

Consolidated Statements of Operations for the Years Ended December 31,
2003, December 31, 2002 and December 31, 2001                               F-3

Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 2003, December 31, 2002 and December 31, 2001                  F-4

Consolidated Statements of Cash Flows for the Years Ended December 31,
2003, December 31, 2002 and December 31, 2001                               F-5

Notes to Consolidated Financial Statements for the Years Ended
December 31, 2003, December 31, 2002 and December 31, 2001                  F-6


         2. All schedules  have been omitted  because they are not applicable or
the  required  information  is included  in the  financial  statements  or notes
thereto.

                                       28
<PAGE>

(c) EXHIBITS

<TABLE>
<CAPTION>

    Exhibit                                                                                                 Foot
    Number                                            Description                                          notes
    ------                                            -----------                                          -----

<S>              <C>                                                                                        <C>
    3.1          Amended and Restated Certificate of Incorporation of
                 Medialink Worldwide Incorporated                                                           (1)
   *3.2          Amendment 1 to the Amended and Restated By-Laws of the Medialink
                 Worldwide Incorporated
    4.1          Preferred Stock Rights Agreement, dated as of August 16, 2001 between Medialink
                 Worldwide Incorporated and Mellon Investor Service, LLC, including the Certificate of
                 Designation, the form of Rights Certificate and the Summary of Rights attached
                 thereto as Exhibits A, B and C, respectively                                               (2)
   10.1          Amended and Restated Employment Agreement, dated as of August 28, 2001, by and
                 between Medialink Worldwide Incorporated and Laurence Moskowitz                            (3)

   10.2          Amended and Restated Employment Agreement, dated as of August 28, 2001, by and
                 between Medialink Worldwide Incorporated and J. Graeme McWhirter                           (4)

   10.3          Amended and Restated Employment Agreement, dated as of January 1, 2002, by and             (5)
                 between Medialink Worldwide Incorporated and Richard Frisch
   10.4          Non-Compete Agreement, dated as of June 16, 1997, by and between Medialink Worldwide
                 Incorporated, Corporate TV Group, Inc. and Richard Frisch
                                                                                                            (6)
   10.5          Asset Purchase Agreement, dated as of June 16, 1997, by and among Medialink Worldwide
                 Incorporated, Corporate TV Group, Inc. and Richard Frisch
                                                                                                            (7)
   10.6          Registration Rights Agreement, made as of June 16, 1997, by and between Medialink
                 Worldwide Incorporated and Richard Frisch                                                  (8)

   10.7          Medialink Worldwide Incorporated 401(k) Tax Deferred Savings Plan                          (9)

   10.8          Amended and Restated Stock Option Plan and form of Stock Option Agreement
                                                                                                            (10)
   10.9          Medialink Worldwide Incorporated 1996 Directors Stock Option Plan and form of 1996
                 Directors Stock Option Agreement                                                           (11)
  *10.10         Form of Indemnification Agreement
  *10.11         Forbearance Agreement
  *21.           Subsidiaries of Medialink Worldwide Incorporated *23. Consent of KPMG LLP
  *27.           Financial Data Schedule
  *31.1          Certification of Chief Executive Officer pursuant to Section 302 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            Certification of Chief Executive Officer pursuant to Section 906 of the
                 Sarbanes-Oxley Act
  *32            Certification of Chief Financial Officer pursuant to Section 906 of the
                 Sarbanes-Oxley Act
-----------------------
* Filed herewith
</TABLE>

                                       29
<PAGE>

(1)      Filed as Exhibit  2.5 to  Medialink  Worldwide  Incorporated  Form 8-A,
         filed on January 16, 1997 (Registration No. 000-21989) and incorporated
         herein by reference.

(2)      Filed as Exhibit 4.1 to Medialink Worldwide Incorporated Report on Form
         8-A dated August 16, 2001 and incorporated herein by reference.

(3)      Filed as Exhibit 10.1 to Medialink Worldwide Incorporated Annual Report
         on Form 10-K dated March 28, 2002 and incorporated herein by reference

(4)      Filed as Exhibit 10.2 to Medialink Worldwide Incorporated Annual Report
         on Form 10-K dated March 28, 2002 and incorporated herein by reference.

(5)      Filed as Exhibit 10.3 to Medialink Worldwide Incorporated Annual Report
         on Form 10-K dated March 31, 2003 and incorporated herein by reference.

(6)      Filed as  Exhibit  28.2 to  Medialink  Worldwide  Incorporated  Current
         Report  on Form 8-K  dated  July 1,  1997 and  incorporated  herein  by
         reference.

(7)      Filed as Exhibit 2.1 to Medialink Worldwide Incorporated Current Report
         on Form 8-K dated July 1, 1997 and incorporated herein by reference.

(8)      Filed as  Exhibit  28.4 to  Medialink  Worldwide  Incorporated  Current
         Report  on Form 8-K  dated  July 1,  1997 and  incorporated  herein  by
         reference.

(9)      Filed as Exhibit 10.33 to Medialink Worldwide Incorporated Registration
         Statement  on Form S-1  (No.  333-14119)  dated  October  15,  1996 and
         incorporated herein by reference.

(10)     Filed as Exhibit 10.34 to Medialink Worldwide Incorporated Registration
         Statement  on Form S-1  (No.  333-14119)  dated  October  15,  1996 and
         incorporated herein by reference.

(11)     Filed as Exhibit 10.35 to Medialink Worldwide Incorporated Registration
         Statement  on Form S-1  (No.  333-14119)  dated  October  15,  1996 and
         incorporated herein by reference.


                                       30
<PAGE>

         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.


MEDIALINK WORLDWIDE INCORPORATED
--------------------------------

By:  /s/ Laurence Moskowitz
-----------------------------------
Laurence Moskowitz,
Chairman of the Board, Chief Executive Officer and President

By:  /s/ J. Graeme McWhirter
------------------------------------
J. Graeme McWhirter
Executive Vice President, Secretary and Chief Financial Officer
Dated:  April 14, 2004

Pursuant to the 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.

 /s/ Laurence Moskowitz                                       April 14, 2004
------------------------------------
 Laurence Moskowitz, Chairman
 of the Board, Chief Executive Officer and President

 /s/ Harold Finelt                                            March 26, 2004
------------------------------------
 Harold Finelt, Director

 /s/ Donald Kimelman                                          March 26, 2004
------------------------------------
 Donald Kimelman, Director

 /s/ James J. O'Neill                                         March 26, 2004
------------------------------------
 James J. O'Neill, Director

 /s/ Theodore Wm. Tashlik                                     March 26, 2004
------------------------------------
 Theodore Wm. Tashlik, Director

 /s/ Paul Sagan                                               March 26, 2004
------------------------------------
 Paul Sagan, Director

 /s/ J. Graeme McWhirter                                      April 14, 2004
------------------------------------
 J. Graeme McWhirter, Director
 Executive Vice President, Secretary and Chief Financial
 Officer

 /s/ Alain Schibl                                             March 26, 2004
------------------------------------
 Alain Schibl, Director

/s/ Catherine Lugbauer                                        March 26, 2004
------------------------------------
 Catherine Lugbauer, Director

/s/ John M. Greening                                          March 26, 2004
------------------------------------
 John M. Greening, Director

                                       31